The curious case of Coinbase — employees driven out by ‘apolitical’ stance

Coinbase’s new “apolitical” culture has led to some employees taking severance packages, as the crypto community reacts with ambivalence.

America’s largest cryptocurrency exchange, Coinbase, made headlines over the past few weeks for an internal culture change that effectively told employees that there will be no space for social activism within its walls. Furthermore, a recently leaked audio apparently reveals that most employees approve of the new direction.

The “apolitical” stance that is being adopted by the company was announced by CEO Brian Armstrong in a published post on the exchange’s Medium platform on Sept. 27. Armstrong’s message cited the incredibly difficult year that has hamstrung many economies, companies and individuals around the world, which has also led to a spring of various societal issues.

In an American context, the tragic death of George Floyd caused by the brutal treatment of a Minneapolis police officer in May 2020 sparked the #BlackLivesMatter movement and subsequent protests and demonstrations across the country. Many Americans decided to band together and speak out against abuse and inequality along the lines of race.

“Laser focused”

Armstrong’s post outlines the company’s desire “to be laser focused on achieving its mission,” which is to create an open financial system for the world by giving people access to cryptocurrency in order to drive economic freedom.

The CEO then highlighted his belief that allowing employees to spend time on social activism and other causes would hamper the company’s goals to build its own capacity, products and services. Armstrong highlights other Silicon Valley companies that actively encourage and engage in social activism before explaining why Coinbase has opted for a different approach:

“The reason is that while I think these efforts are well intentioned, they have the potential to destroy a lot of value at most companies, both by being a distraction, and by creating internal division.”

Furthermore, according to the CEO, “most employees don’t want to work in these divisive environments.” He further stated that employees “want the workplace to be a refuge from the division that is increasingly present in the world.” Thus, Armstrong made it clear that Coinbase would focus minimally on causes not directly related to the mission, which include policy decisions, nonprofit work, broader societal issues and political causes.

The CEO did concede that the company may engage in governmental policy relating to cryptocurrencies but wouldn’t engage in issues unrelated to the industry. Coinbase will also continue to contribute to its Pledge 1% program and GiveCrypto.org but would not participate further on that front.

Cointelegraph has reached out to Coinbase for comment but has not received a response at press time.

5% of employees opt for a severance package

Following his Medium blog post, Armstrong sent an internal email to staff that indicated that any individuals who are unhappy with the company’s changing culture policy could opt for a severance package to leave the company.

The letter offered a four-month payment package for staff who had worked for the company for less than three years. Employees who worked at Coinbase for more than three years would be up for a six-month payment package. Those opting for the packages would also receive six months medical aid coverage through the U.S. Government’s COBRA program.

The letter was reportedly sent to staff on Sept. 30, and those interested in accepting a severance package were given a week to make a final decision and submit the required documentation before the deadline on Oct. 7.

Despite the relatively short time frame, Armstrong revealed that 60 employees had opted to part ways with the company in a follow-up blog post on Oct. 8. The number accounted for 5% of Coinbase’s employee numbers, while the CEO also stated that more employees had expressed interest in leaving.

Among those leaving the company was the vice president of business and data, Dan Yoo, who announced his departure in a LinkedIn post on Oct. 7. The VP said that he would stay on at Coinbase to the end of 2020 to manage a transition before his departure. Clem Freeman, a software engineer at Coinbase, also publicly announced that he would be leaving the company on Twitter, saying he disagreed with “some of the changes made recently by leadership.”

Cointelegraph reached out to Freeman and Yoo for comment but has not received a reply from either individual.

The aftermath

The recent events at Coinbase and the subsequent reactions are still ongoing, and it’s not entirely clear cut as to what the greater impact on the business will be. From an ideological sense, the move has been met with varying commentaries and reactions from notable persons in the wider crypto community.

Coinbase was the recipient of an undisclosed investment from world-renowned tennis star Serena Williams and her Serena Ventures VC firm, which was announced in April 2019. The firm’s logo was featured on the Serena Ventures website — up until this month where the Coinbase logo has seemingly been removed. With Coinbase seemingly taken off the list of beneficiaries, it seems their newly revised culture stance is at odds with Williams’ investment firm.

Coinbase’s apolitical stance also drew derision from Twitter CEO Jack Dorsey, who highlighted his belief that Bitcoin acts as “direct activism” against an “unverifiable and exclusionary financial system” and that Coinbase had seemingly failed to recognize societal issues linked to its own customers’ use of the platform.

The company drew further criticism after audio from an internal meeting was leaked to Motherboard, in which it is alleged that Coinbase was accused of 'stunting internal discussion' and forcing employees to delete political messages on the company's Slack group.

Overall, there are a plethora of different opinions toward Coinbase’s apolitical stance. Some have hailed the “business focus” while others have hit out at the seeming lack of regard for employees’ social and cultural stances. Nevertheless, the company forges on, bidding farewell to those who have chosen to disembark at a crucial crossroads in the Coinbase journey. In some cases, you are doomed if you do and doomed if you don’t. This phrase seems particularly poignant in the Curious Case of Coinbase.

COVID-19: Decentralization the norm as workplaces adjust to new normal

COVID-19 has forced businesses around the world to adapt to new ways as crypto companies embrace the “decentralized normal.”

2020 will forever be remembered as the year of COVID-19, but there is no telling what the long-lasting effects of the pandemic will be on the global economy. Around the world, countries have been forced to shut down their local economies, with people having to shelter in place in order to observe the social distancing measures needed to curb the spread of the coronavirus.

The immediate result of these measures has varied from country to country, but a common trend has been many companies and businesses having to fundamentally change their regular ways of operating.

Those lucky enough to stay in business have had to accommodate their employees working from home, with many offices shuttered in order to stem the tide of the virus’s spread. This “new normal” has been in effect for many months now, and businesses and individuals may well be coming to terms with the status quo.

According to multinational consultancy firm PwC’s most recent “CEO Panel Survey,” top executives around the world plan to make their companies more digital and develop more flexible and employee-orientated work practices that aid those working remotely. Of these, health and technology companies are reportedly most likely to prioritize virtual business models.

It seems as though the COVID-19 pandemic has been a strange catalyst for a decentralized way of working for a wide variety of industries. The power of technology has certainly made this transition easier, and teams are able to operate and communicate effectively, even through novel means. The cryptocurrency and blockchain space has long been a proponent of decentralization, but nevertheless, the industry has also felt the effects of the ongoing pandemic.

Here’s how some of the biggest companies and players in the cryptocurrency and blockchain space have had to adapt to new ways of working.

The “new normal”

Cryptocurrency exchanges traditionally operate in one specific country or region, but a few of the biggest platforms have turned into global players, with offices and users situated across the globe. Binance has established itself as the biggest cryptocurrency exchange by volume, coming hand-in-hand with a continual push to roll out exchange support in different countries.

The exchange’s founder, Changpeng Zhao, told Cointelegraph that the business has been operating as an international, decentralized team for over three years already. Remote working is an essential part of the Binance culture, according to CZ, with more than 1,300 employees across 50 countries working from flexible locations across time zones.

Having a flexible working environment already established means that the exchange has not had to retool its ways of working as much as other organizations. But as CZ explained, that doesn’t mean that COVID-19 hasn’t affected its preferred ways of working:

“There is one impact, before COVID, our teams are nomadic. We travel a lot and team members have random in person encounters at conferences etc. COVID has limited those interactions. These do have some negative impact on especially the new members on the team. But so far, we are coping with it.”

Given that Binance has not had to overhaul its work environments and processes, there hasn’t been a lot of disruption to the organization. However, the changes are noticeable, so things may take a few months to return to normal. CZ said the business is making use of digital tools to collaborate with team members, clients and the crypto community:

“We, of course, do not have the ability to see each other face-to-face or connect with our local communities at events, but we see this as temporary. In the interim, we are making an effort to turn on our webcams and jump on video calls and host webinars.”

BitPay, the American Bitcoin (BTC) payment service provider, made the decision to move to a permanent work-from-home policy in September, following feedback from its employees. The company has over 80 staff members across its three global offices in Atlanta, Amsterdam and

Buenos Aires. BitPay’s chief marketing officer, Bill Zielke, told Cointelegraph that prior to the pandemic, up until February, its staff was working in a normal office environment. He added:

“In the beginning we put a plan in place and there were a few processes that we had to revise and work with our employees to make sure they had what they needed to be successful working from home. Daily stand up meetings, increased communications and virtual all hands meetings were among some of the new ways of going about company life.”

Ciara Sun, vice president of Singapore-based cryptocurrency exchange Huobi, also weighed in on the current working climate in the wake of COVID-19 and its effect on the global economy. Sun told Cointelegraph that all of Huobi’s staff members have been working remotely since February, and the transition was straightforward. Nevertheless, there were some sticking points:

“One of the biggest challenges our team faces during the COVID-19 pandemic is the lack of face-to-face interaction, not just internally but also with our partners, community members, and other stakeholders. Even with everyone working remotely, team collaboration remains a top priority and a central part of our work culture. To make the transition easier, we established a process for regular check-ins and virtual meetings.”

In order to stay abreast of industry developments and the cryptocurrency community, Sun says that Huobi has been attending relevant virtual conferences as well as hosting online events for various product launches. Huobi University has also offered online courses to its users and the wider community.

Work-life balance

Whether organizations have been fundamentally challenged to change their ways of working or had already adopted agile working environments, their employees will have experienced various levels of change to their personal and working lives.

Having to work from home has positive and negative effects on individuals’ lives. Some may find it harder to step away from work, given that there is no “divide” between the two when working from home. Others may benefit from more time spent with family and on leisure activities.

The overarching sentiment from the various organizations is that this “new normal” is giving people a better work-life balance. Zielke believes that there will be some permanent changes to the way companies and people work from here on out. With the tools available for people to do their jobs remotely, Zielke also suggested that their lives may well benefit from the new reality.

Binance’s CZ believes that many companies around the world will gradually adapt to and adopt some level of remote working and that people will naturally gravitate to it on a permanent basis: “There will be many people who prefer to continue to work from home. They will embrace the ability to spend more time with the family while doing work at more flexible hours like late nights, etc.”

Living up to a decentralized ideology

There is no denying that the COVID-19 pandemic has expedited a move to decentralized ways of working across most industries around the world. For the cryptocurrency space, this serves as a real-world reflection of the decentralized values underpinning Bitcoin and blockchain technology.

CZ believes that his company has already embraced a decentralized way of working that reflects the industry and the customers it serves: “There are many parallels. Most blockchain and crypto companies operate remotely and in a decentralized manner. Most teams have remote members across the globe. Our business is unique because it’s a 24/7 market.”

Zielke also conceded that the new norm reflects the decentralized principles underpinning the technological power of the cryptocurrency and blockchain space: “That is a good way of thinking about it. As a team, we are all passionate about the future of blockchain and cryptocurrency — so we are living our work.”

Creator leaves SushiSwap in hot water as multisig revival is on the menu

SushiSwap’s community will take charge of the platform once it completes its migration to a multisignature contract from Uniswap.

The high-risk environment around the decentralized finance space and hype for one of its latest offerings, SushiSwap, raises an analogy with a Japanese delicacy called fugu, or pufferfish, which is said to be more deadly than cyanide.

Highly trained chefs have been serving up fugu in Japan’s top restaurants for decades, balancing the lives of their customers on the edges of their Yanagiba knives. Any slight error could fatally poison the diner. As such, the cryptocurrency community now also has a proverbial fugu of the DeFi world.

In a short space of time, the carbon copy of the popular Uniswap automated market maker surged in use due to its lucrative yield farming numbers and accounted for over 70% of the total value on Uniswap at the beginning of September. SushiSwap was officially launched on Aug. 28. However, the self-proclaimed “chef” of Sushiswap, an anonymous figure known as Chef Nomi on Twitter, has seemingly served up a batch of poisonous fugu to SushiSwap token holders and users after swapping out all of his Sushi tokens for Ether (ETH) on Sept. 5.

As the cryptocurrency community cried foul over the situation, with widespread talk of Chef Nomi having carried out an exit scam, the “chef” attempted to redeem himself by handing the project over on Sept. 6 to a well-respected industry leader: CEO of the cryptocurrency derivatives exchange FTX, Sam Bankman-Fried.

Handing power back to the community

Cointelegraph reached out to Bankman-Fried to ascertain how he had become involved in the SushiSwap project and what the next steps for the platform would be following its original creator’s apparently self-imposed exile. Bankman-Fried is also the CEO of Alameda Research, which has two trading accounts that have reportedly been listed in the top 10 for lifetime profits of over $60 million, according to a Bloomberg report. The FTX CEO told Cointelegraph that he made contact with Chef Nomi and the project’s general manager OxMaki, testing the waters of a potential collaboration between the projects:

“I first approached Nomi and Maki about potential collaboration opportunities after the project had been running for a while; the conversations were interesting but nothing too much happened, because in the end it’s the communities’ decision.”

Bankman-Fried was one of many industry participants that has taken a keen interest in the DeFi space, which has exploded in popularity and capitalization in 2020. Various projects have seen billions of dollars of capital, both cryptocurrency and fiat, locked into different DeFi protocols, and many more may be drawn in by the impressive yield farming returns.

At the beginning of September, Uniswap crossed the $1 billion mark in its 24-hour trading volume. The numbers being posted put Uniswap third on the list of exchanges by normalized trade volume, trailing behind centralized exchange behemoths Binance and OKEx. SushiSwap launched and is currently operating on the Uniswap exchange, and the huge yields touted by the platform quickly saw DeFi enthusiasts stake Ether in exchange for Sushi tokens, locking in an enormous amount of value in SushiSwap’s liquidity pools on Uniswap.

It didn’t take more than a week for the total amount of funds staked through SushiSwap to account for more than 70% of the total value locked into the Uniswap protocol. Bankman-Fried believes the platform still has immense value to offer in the DeFi space:

“I thought Sushiswap was really innovative, and had a compelling pitch (before the Nomi incident). It’s hard for me to predict the future here; a lot depends on the community.”

Following Chef Nomi’s now-infamous token swap, Bankman-Fried admitted that he was initially hesitant to take over, but had a gut feeling that it was “the right thing to do for the project.”

Pay back!

The wider cryptocurrency community was appalled by the behavior of SushiSwap’s anonymous creator, with many labelling his Sushi/ETH token swap as an exit scam. Chef Nomi made off with 17,971 ETH after swapping out 2,558,644 Sushi tokens on Sept. 5, as was originally detected on Twitter by Spencer Noon, head of DTC Capital:

A second token swap on Etherscan for a further 20,039 ETH took place, taking the total tally of swapped ETH tokens to 38,011 ETH, worth just under $13 million at the time of writing. These tokens reportedly came out of the project’s developer pool, and were intended to fund the ongoing development and maintenance of the platform.

As the platform looks to carry out a migration to a multisignature contract, Bankman-Fried would like to see Chef Nomi return the funds that he cashed out of the project: “I would certainly like him to return at least a large portion of them to the dev pool! I think he handled it really poorly and communicated really badly.”

SushiSwap migration from Uniswap due soon

The SushiSwap platform has already had its fair share of controversy in its incredibly short lifespan. While Chef Nomi dumping Sushi tokens caught the cryptocurrency community off guard, the platform had grabbed headlines earlier for its plans to migrate from the Uniswap DEX. On Sept. 4, the SushiSwap community voted in favor of a migration away from Uniswap to its own native platform, taking $180 million worth of Sushi tokens with it.

Regardless of the feelings of the wider crypto community or the actions taken by the “chef,” the migration of the SushiSwap platform is expected to take place on Sept. 9, as confirmed by Bankman-Fried:

“Sushiswap is currently undergoing migration and transition to multisig; after that, it’ll be community-run, not run by me. I’ve mostly just been working to ensure a smooth transition to multisig and a smooth migration.”

The mischievous Ryuk: Combatting the ‘Death Note’-inspired ransomware

As the Ryuk ransomware continues to wreak havoc, tracking ransomware payments has become critical in stopping criminals from cashing out.

There is still an element of the crypto “Wild West” in 2020, as cryptocurrency stolen through hacks and ransomware attacks is still being cashed out on major exchanges around the world. Ransomware attacks have proved to be a lucrative cash cow for cybercriminals over the past few years, with the United States Federal Bureau of Investigation estimating that over $144 million worth of Bitcoin was stolen between October 2013 and November 2019.

A press conference held by the FBI in February revealed the huge amount paid out in ransom to attackers by victims that were desperate to regain access to their infected systems and data. Interestingly enough, attackers received the majority of ransoms in Bitcoin (BTC). More recently, researchers took a sample of 63 ransomware-related transactions, accounting for around $5.7 million of stolen funds, and found that over $1 million worth of Bitcoin was cashed out on Binance following a string of transactions across various wallet addresses.

There are a number of notorious ransomware variations that are used by different hackers and cybercriminal groups. Cybersecurity firm Kaspersky highlighted the uptick in these types of attacks targeting larger organizations in July, outlining two particular malware threats: VHD and Hakuna MATA.

These particular threats seemingly pale in comparison with the amount of cryptocurrency stolen through the use of bigger malware threats such as the Ryuk ransomware. So, here’s why Ryuk has been a preferred method of attack and what can be done to prevent and discourage attackers from cashing out their ill-gotten gains on major exchange platforms.

The Trojan at the city gates: Ryuk

These newer vectors of attack mentioned in Kaspersky’s July report have not quite garnered the same reputation as the Ryuk ransomware. Toward the end of 2019, Kaspersky released another report that highlighted the plight of municipalities and cities that have fallen prey to ransomware attacks. Ryuk was identified by the firm as the favored vehicle of attacks on larger organizations, with governmental and municipal systems being prime targets in 2019.

Ryuk first appeared in the second half of 2018 and brought havoc as it spread through computer networks and systems around the world. Named after popular character Ryuk from the manga series Death Note, the malware is a clever take on the “King of Death,” who amuses himself by delivering a “death note” to the human realm that allows the note’s finder to kill anyone by simply knowing their name and appearance.

The malware is typically delivered in a two-phase approach that allows the attackers to examine the network first. This usually begins with a large number of machines receiving emails containing a document that users may unwittingly download. The attachment contains an Emotet Trojan malware bot that activates if the file is downloaded.

The second stage of the attack sees the Emotet bot communicate with its servers to install another piece of malware known as a Trickbot. This is the piece of software that allows attackers to carry out a probe of the network.

If the attackers hit a proverbial honey pot — i.e., a network of a big business, governmental or municipal office — the Ryuk ransomware itself will be deployed across different nodes of the network. This is the vector that actually encrypts system files and holds that data for ransom. Ryuk encrypts local files on individual computers and files shared across a network.

Furthermore, Kaspersky explained that Ryuk also has the capability of forcing other computers on the network to switch on if they’re in a sleep mode, which propagates the malware across a larger number of nodes. Files located on computers on a network that are asleep are typically unavailable for access, but if the Ryuk malware is able to wake those PCs up, it will encrypt files on those machines as well.

There are two main reasons why hackers look to attack governmental or municipal computer networks: First, many of these systems are protected by insurance, which makes it far more likely that a monetary settlement can be reached. Second, these bigger networks are intrinsically tied together with other large networks, which can lead to a far-reaching, crippling effect. Systems and data powering completely different departments can be affected, which calls for a swift solution, more often than not resulting in a payment to the attackers.

Combatting cashing out on major exchanges

The end goal of these ransomware attacks is pretty simple: to demand a large payment, typically made using cryptocurrencies. Bitcoin has been the favored payment option for attackers. The use of the preeminent cryptocurrency as the preferred payment method has an unintended consequence for attackers though, as the transparency of the Bitcoin blockchain means that these transactions can be tracked at both a micro and a macro level.

Related: Ransomware Attacks Demanding Crypto Are Unfortunately Here to Stay

That is exactly what researchers have been doing, and by looking at the endpoint of these transactions, analysts can see attackers making use of some of the biggest cryptocurrency exchanges. At the end of August, it was revealed that over $1 million worth of ransomed Bitcoin has been cashed out through Binance.

Binance’s security team revealed to Cointelegraph that these transactions were over 18 months old and that the exchange has been actively monitoring the relevant accounts. The team also highlighted the use of its exchange by attackers as being a byproduct of the sheer volume of cryptocurrency traded on the platform, which gives illicit actors more of a chance to blend into the crowd. The spokesperson added:

“This is further complicated by the fact that Binance has a wide variety of customers operating on its platform, with some customers receiving such funds through simple peer-to-peer trades, and others receiving through corporate services which leverage our platform for liquidity.”

Cointelegraph reached out to Israel-based cybersecurity firm Cymulate to learn what exchanges can do to better prevent cybercriminals from using their platforms to liquidate stolen cryptocurrency. Avihai Ben-Yossef, the company’s co-founder and chief technology officer, contends that companies that provide antivirus protection and endpoint detection and response have a vital role to play in tracking ransomed crypto, given that they know the amounts paid out and the respective wallet addresses receiving the ransomed funds. He added that from there, exchanges can track and trace these payments:

“Analysts can collect wallet numbers and check how much money is in each wallet and then create a sum of all of the found wallets. It’s important to note that there will always be more and that you need to be able to track each one from the Ryuk payloads created.”

There is no doubt that this can be a time-consuming process. Nevertheless, the use of wallet addresses by attackers to receive ransomed funds makes it possible for security teams to keep an eye on the movement of those funds.

Overall, 2020 has been a profitable year for cybercriminals who have made use of ransomware attacks, which have been constantly evolving. Ben-Yossef cautioned organizations and companies to ensure they have the best cybersecurity to combat the constantly changing cybercrime environment:

“Ransomware attacks in general are becoming more and more sophisticated. They include lateral movement, data exfiltration and many more methods that have serious consequences to companies that won’t pay the ransom. There’s a new successor to RYUK, Conti, which is written a bit differently and most likely developed by other hackers. It’s become critical for organizations to adapt security testing tools such as breach and attack simulation to ensure their security controls are working to their optimal effectiveness against emerging threats.”

Key Timing for Adoption? Crypto Goes Mainstream With TV, Newspaper Ads

Recent advertising campaigns by cryptocurrency fund management firms are well timed as investors look for safe havens from inflation.

Amid turbulent times for the world at large, the cryptocurrency space seems to be cruising on its own steam in 2020. The coronavirus pandemic has put a major strain on economies around the world, and countries such as the United States have seen their central banks resort to extended quantitative easing in order to stimulate their financial ecosystems.

Some analysts believe that this continual fiscal stimulus is part of the reason that the cryptocurrency market is enjoying relative success compared with its traditional financial counterparts.

The likes of Anthony Pompliano, co-founder of Morgan Creek Digital, and Mati Greenspan, founder of Quantum Economics, have spoken to this very point in a number of recent newsletters to investors. Their insights have been directly mirrored by some major moves from traditional companies that have made significant investments into Bitcoin (BTC) and other cryptocurrencies.

MicroStrategy, considered to be the largest business intelligence firm in the world, made headlines last week as it invested $250 million directly into Bitcoin. The company hammered home its belief that Bitcoin is a superior store of value compared with other financial assets and will deliver better long-term appreciation than holding fiat currency.

Another clear sign that positive sentiment is soaring in the space is the growth of assets under the control of cryptocurrency fund manager Grayscale Investments. Those numbers may well increase over the next few months considering the fact that Grayscale is now actively advertising its services on mainstream television in the United States.

While it’s not the first time that cryptocurrency exchanges and fund managers have advertised in traditional media outlets, the sheer amount of interest in the space suggests a shifting sentiment from the wider public.

Targeting the masses

As Cointelegraph Magazine explored on Aug. 10, the launch of Grayscale’s television ad could be a major catalyst for increased investment in crypto, likened to a Merrill Lynch ad in 1948 that introduced investors to the stock and bond markets. Grayscale released a teaser for the ad on Twitter, with the full version now running on CNBC, MSNBC, Fox and Fox Business, and other channels.

While Grayscale’s ad is running on TV screens and social media channels, traditional print has not been neglected either. Galaxy Digital, famously set up by millionaire investor Mike Novogratz, ran a large block ad on Aug. 13 in the well-known United Kingdom-based business newspaper the Financial Times. The publication had over 1 million subscribers in 2019, with an estimated 18% of its readership being millionaires. The ad itself contains emotive language that encourages people to invest in Bitcoin by highlighting the tough sociopolitical and economic landscape this year.

Will mainstream advertising drive adoption?

The cryptocurrency space was already enjoying a period of heightened interest and resulting investment before these advertising campaigns were launched. What remains to be seen is whether these initiatives to coax new users into the ecosystem will pay dividends.

Cointelegraph reached out to Joshua Frank, co-founder and CEO of crypto data aggregation platform The Tie, to assess the potential efficacy of these marketing drives. Frank was not entirely surprised to see these advertising initiatives, given that running campaigns seems to be the mood of the hour, judging by the campaign of the controversial HEX token seen in the United Kingdom recently. Nevertheless, he conceded that it’s a change in tactics for the cryptocurrency industry:

“A few years ago I would have never expected a print advertisement related to cryptocurrency. I think the transition to the Bitcoin as a digital gold narrative is the reason that a print ad has been pursued. Trying to get an older generation who invests in gold to view Bitcoin as a digital alternative.”

Frank is of the opinion that Grayscale’s television ads are likely to be more impactful than Galaxy Digital’s print campaign, although he noted that the response to Grayscale’s video may not have been as positive as the firm had desired.

Social media influencers may have biggest impact

An intriguing takeaway from Frank’s insights is his belief that the bigger marketing impact may come from social media influencers. Frank mentioned Barstool Sports founder Dave Portnoy and his recent meeting with the Winklevoss twins, which made waves on Twitter in particular, as a prime example of the effect influencers can have on specific cryptocurrencies:

“It hasn’t been TV or print advertising that has driven the Robinhood rally, it is Tik Tok influencers and Dave Portnoy. [...] Portnoy, Barstool, and Tik Tok can drive the next wave of users to digital assets. Influencers and social media drive retail flow, and retail flow attracts more institutional clients.”

Timing is key

The final consideration of these advertising campaigns is their timing. The overall cryptocurrency market has been in a particularly positive space, in stark contrast to the global economic climate. Quantum Economics’ Greenspan told Cointelegraph that the “Blitzkrieg Bop” song came across as “loud” but countered that by complimenting Grayscale on its growing client base. Meanwhile, he felt that the approach taken by Galaxy Digital was arguably more effective, adding:

“TV and newspaper advertising is an industry standard. I believe the fact that we’re seeing these levels of advertisement in mass media is really a hallmark moment for the crypto industry — a sort of ’coming into the light.’ Whether that is a good thing or bad thing, I am not sure.”

Frank’s thoughts around HEX were echoed by Greenspan, who highlighted the advertising in the U.K. as one of the downsides of crypto going mainstream, marking a blip on what has been a figuratively seminal moment for the crypto space, as he explains: “We’ve certainly seen it backfire with the stuff that HEX has been doing, and certainly, I think at least in the UK, the regulators there should lose their jobs over this.” He went on to add: “I can’t believe that The Economist was willing to publish an ad about HEX with an indication of 11,500% gains. All the disclaimers in the world are not going to make that OK.”

Overall, analysts like Greenspan have been highlighting an ever growing negative sentiment of late toward the inflationary nature of fiat currencies, and the Quantum Economics founder believes that people are coming to this realization by themselves — with or without ads touting the benefits of cryptocurrencies:

“Price alone is a good indicator that people are understanding this message more and more clearly. Bitcoin was invented as a form of money that is independent of governments and central banks. [...] I just hope that the crypto solutions are ready by the time they’re actually needed.”

Blockchain Phones and Bitcoin Watches: Revisiting the Crypto Tech Hype

Blockchain smartphones and crypto-storing watches: Which innovative devices have actually gone from concept to reality?

Talk of cryptocurrency and blockchain-powered gadgets inevitably spiked alongside the hype for token prices. But looking back, have they delivered any meaningful changes to users, or are they just another result of the hype synonymous with the space? 

The surge of interest in the space came to a head in 2017 as Bitcoin (BTC) hit never-before-seen highs of around $20,000 before crashing dramatically and entering the bearish crypto winter. While the collapse left devastation in its wake, the months of focus brought Bitcoin, cryptocurrency and blockchain technology into the mainstream consciousness like never before.

Many projects were conceptualized and brought to life during that period, and that inspiration led to a number of technological developments that were aimed at cryptocurrency users and blockchain innovators. Blockchain smartphones and cryptocurrency-enabled luxury watches have grabbed headlines over the past few years. Some have received positive feedback, while it’s not clear if other products have even seen the light of day.

Blockchain smartphones

Smartphones have become a literal extension of the bodies of billions of people over the past decade. According to Statista, over 40% of the global population uses smartphones, meaning that over 3 billion people have them. The likes of Samsung, Huawei and Apple’s iPhone are dominating the sector with the latest technology crammed into their futuristic devices. 

Smartphones can do almost anything these days, and it was only a matter of time before cryptocurrency and blockchain applications were integrated into these companion-like devices. Indeed, there are a handful of manufacturers that are positioning their devices as blockchain smartphones. 

Samsung’s Galaxy S10 is probably the most high profile, although the device itself isn’t “blockchain-powered” but, more specifically, blockchain-enabled. The S10 made headlines for its application for storing cryptocurrency private keys, dubbed Samsung Knox, as well as a built-in cryptocurrency wallet, the Blockchain Keystore. 

Over the course of 2019, the Galaxy S10 added support for over 30 different cryptocurrencies in its wallet. Toward the end of the year, Samsung launched the "KlaytnPhone," a variant of the Galaxy Note 10 that featured its cryptocurrency wallet and Knox application and also rewarded users with 2000 Klay tokens, the native currency of the Klaytn blockchain. These crypto and blockchain features were integrated into the company’s latest Galaxy S20 smartphone

Taiwanese electronics firm HTC also has its own blockchain smartphone, the Exodus. Launched in March 2019, the device was originally only available for prepurchase using cryptocurrency, but it became available via fiat as well.

The Exodus comes standard with a hardware wallet application that allows users to store their own private keys. It also comes with the Opera browser, which provides access to a plethora of decentralized applications. As Wired summed up in its product test, it’s a useful smartphone that provides reliable applications for cryptocurrency users.

The latest edition of the HTC blockchain smartphone is the Exodus 1S, which it claims is the first device capable of running a full Bitcoin node. The device’s social key-recovery feature was applauded by Ethereum co-founder Vitalik Buterin, as it allows users to give parts of private keys to trusted contacts to enable recovery. The HTC Exodus 1 can only be purchased from the manufacturer’s website, although not all payment options are available, and its Binance model appears to be out of stock. The HTC Exodus 1S is only available for purchase in certain regions and is not yet available worldwide.

Blockchain startup Sirin Labs laid claim to the title of the first company to launch a blockchain smartphone in November 2018 with the “Finney.” The device comes standard with a built-in cold storage wallet, token conversion service and DApp ecosystem powered by its proprietary Sirin operating system. The cold storage is physically separate from the rest of the device, and users can carry out peer-to-peer transactions without the need for a centralized exchange. The Finney appears to only be listed for purchase on the Sirin Labs website, although it was also available on Amazon at one point. 

Pundi X, a decentralized offline cryptocurrency sales network, is reportedly also working on developing its own blockchain smartphone. The company claims that its “Blok on Blok,” or BOB, smartphone will have all data executed by its Function X blockchain.

According to the company, users will be able to switch between two operating systems: a blockchain mode and a conventional Android mode. The blockchain mode aims to give users complete control over their data. The project will be bankrolled by a crowdfunding initiative, and only 5,000 devices will be offered in the first manufacturing run.

All things considered, the devices that were released were seemingly met well. Further development of crypto-enabled smartphones with reliable functionality may introduce a swathe of new users to the space, provided they offer the same level of experience as any non-crypto smartphone. Furthermore, aside from Samsung’s S10 and Galaxy Note models, these devices seem fairly difficult to acquire online, as they are mostly only listed for sale on their own websites.

Nice watch, but does it accept crypto?

While cryptocurrency functionality is slowly being incorporated into handheld devices, three world-renowned Swiss watchmaking companies have released timepieces that are inspired by Bitcoin and cryptocurrencies.

In September 2018, Hublot announced the launch of its Big Bang Meca-10 P2P watch. The Bitcoin-inspired timepiece was designed as a commemorative collector’s item celebrating the 10-year anniversary of the preeminent cryptocurrency. Only 210 watches were made in the collection, with that number symbolizing the 21 million supply limit of Bitcoin. The watch was initially valued at $25,000, and prospective buyers had to sign up for a presale managed by Asia-based digital asset brokerage firm OSL. Another caveat was that these watches could only be purchased with Bitcoin. 

It is not clear if the limited Hublot watches were actually built and sold. A confirmation request sent by Cointelegraph remained unanswered at the time of publishing.

Another luxury Swiss watchmaker, Franck Muller, also launched its own cryptocurrency-inspired timepiece in May 2019. The “Encrypto” watch series was released in partnership with investment firm Regal Assets, with its core functionality featuring a Bitcoin cold storage function. 

The Frank Muller Encrypto line now features different styles for both men and women, with price tags ranging from $20,000 to $65,000. The different watches are made of various luxury materials including gold, diamond and carbon fiber.

The dial of the watches includes a laser-etched QR code for its corresponding public wallet address for receiving Bitcoin payments. Users also receive a USB stick that stores the private key of the corresponding public address. Franck Muller has claimed that its deep cold storage wallet “cannot be hacked” and uses “offline generated, non-deterministic TRNGs (True Random Numbers Generated).” Like the Hublot Big Bang Meca-10 P2P, the Franck Muller Encrypto can be bought with either BTC or fiat currencies.

The third Swiss watchmaker to have announced the design of a luxury watch with a built-in cryptocurrency cold wallet is A. Favre & Fils. The company unveiled a concept idea of what it claimed as the first-ever Swiss handcrafted mechanical watch with a built-in cryptocurrency cold wallet and state-of-the-art security solution.

The watch was expected to be launched in the second quarter of 2019, and it was touted to cost in excess of $100,000, making it the most expensive cryptocurrency cold wallet timepiece on the market. Cointelegraph reached out to A. Favre & Fils to find out if the timepieces were ever released but received no response as of publication.

Merging technologies

It seems clear that as technology progresses, more functionality is being crammed into the latest devices. Whether it’s a smartphone or luxury timepiece, there’s a good chance that the item has some serious technological capabilities beneath the surface.

This is the case with cryptocurrency-enabled gadgets. Devices are now being delivered to the market with built-in cold storage wallets, decentralized and centralized exchange applications, and numerous other functions.

Some of these gadgets are arguably overhyped, but it seems that the majority of companies that are incorporating cryptocurrency support into these devices are trying to give users the best in security and functionality.

Unite to Succeed: Swiss Stablecoin Association Hopes to Break the Ice

The new World Stablecoin Association hopes to create a united front for the sector to tackle regulatory concerns and drive collaboration.

The recent formation of the World Stablecoin Association in Switzerland was done with the goal of creating a united front for the sector to tackle regulatory concerns and drive collaboration. Stablecoins are becoming an increasingly important, widely used medium of exchange in the cryptocurrency community, with industry leaders such as Tether (USDT) and USD Coin (USDC) enjoying immense success in 2020. 

Tether hit a milestone toward the end of July, surpassing $10 billion in market capitalization as fiat currency continues to be converted into the stablecoin. Meanwhile, USDC celebrated breaking the $1 billion market cap threshold at the beginning of July, just a few months shy of its second birthday.

The success of these projects is a real indicator of the popularity of stablecoins and their utility in the cryptocurrency space, yet up until now, there was no organization to bring these stablecoins together to collaborate. The WSA is still in its infancy, having just been formed, but it is actively in talks with Tether, USDC, Dai and HUSD, hoping to bring these projects on board by the end of 2020.

A number of projects have already reportedly become members of the WSA, such as the Canadian dollar-pegged QCAD as well as decentralized finance protocol Ren, which is backed by Polychain Capital. Additionally, the Brazillian Digital Token (BRZ), Crypto BRL (CBRL), Peg Network, QCash (QC), Stably, USDK and Digitalbits (XDB) are also believed to have joined the initiative.

A united front

While some of the cryptocurrency ecosystem’s biggest projects come as the result of open-source software development, direct collaboration between industry participants that are offering similar services is not widely seen. Stablecoins peg to a certain underlying fiat currency or physical asset, and some of these are pegged to the very same asset, which puts them in direct competition. While this competition exists, the creation of the WSA seems to be getting some positive reactions from stablecoin operators and industry experts alike.

Cointelegraph spoke to Emin Gün Sirer — computer scientist, professor at Cornell University and CEO of Ava Labs — to learn the particular challenges facing stablecoins and their operators and if the WSA could potentially provide the support needed to overcome them. He said the creation of an association for stablecoins is a welcome addition to the industry in light of three major challenges:

“On the technical side, we need established best practices for security, auditing, and monitoring for projects to follow. On the regulatory side, they need to convince lawmakers to enact new processes for compliance in the newly emerging DeFi world. And finally, adoption and user education are key to getting stablecoins to reach the next level.”

Gün Sirer believes the amalgamation of these different operators could spearhead the development and proliferation of stablecoins around the world: “It’s fantastic to see the WSA bring together both fiat-pegged and algorithmic stablecoins together under the same structure.” He went on to add: “This united front can help address the technical and regulatory challenges ahead, and thus help expand adoption.”

Cointelegraph also spoke with Roberto Durscki, COO of Stablecorp — the organization behind the launch and maintenance of QCAD. Durscki highlighted the opportunities for a stablecoin alliance and how it has the potential to benefit the overall crypto ecosystem by sharing compliance insights and establishing a consensus around best practices:

“A token per se doesn’t create a Stablecoin, a lot of work goes on the P&Ps (policies and procedures) as well as overall management of the coin for a reliable and effective financial tool. We believe an alliance/consortium/association of some kind, bringing the best projects globally together, could help set minimum compliance standards as well as help new projects to build those capabilities.”

Another potential upside is the establishment of meaningful partnerships between different stablecoin operators. While the industry has probably been guilty of an individualistic mindset, Durscki sees value in forming teams: “Stablecoins, like any other projects, require solid partnerships to thrive. Especially on compliance, legal, accounting and tech.” Additionally, given that stablecoins offer an easy medium of exchange between cryptocurrencies, they could also operate well as trading pairs between each other:

“A lot of a stablecoin value is related to its liquidity and ease of trade versus other assets (including other Stablecoins). We believe that an alliance would speed up and facilitate the technical integration among Stablecoins.”

The WSA’s launch comes at a time when stablecoins are enjoying immense success. Tether is close to becoming the cryptocurrency with the highest daily transaction volumes in United States dollars, accounting for over $11 billion of the $13.4 billion market capitalization of stablecoins alone, according to crypto data and research firm Messari. 

Related: On Solid Ground: Stablecoins Thriving Amid Financial Uncertainty

Mastercard and Visa Are Making Bold Moves Toward Mass Crypto Adoption

Global payment processors Mastercard and Visa are laying the foundations for crypto support that may drive adoption on a global scale.

Leading global payment companies Mastercard and Visa have been making moves to accelerate the support of cryptocurrency payment processors by opening up new options for users around the world. Both companies made strong statements in support of the use of cryptocurrencies in July by announcing respective projects and collaborations that are driving the adoption of cryptocurrencies.

The positive attitude toward cryptocurrency exchanges and payment platforms from the world’s largest traditional payment processors signals a shift in perception from the traditional financial space. Mastercard has been actively encouraging exchanges and payment service providers to enlist in its recently expanded cryptocurrency card program, becoming partners in just a few weeks as part of its Accelerate program. Meanwhile, Visa outlined its vision of the cryptocurrency space with an overarching theme of positivity toward the market and the role it will play.

The payment service provider noted digital currencies as an exciting avenue to expand existing network-of-networks to support the latest technology powering global commerce. These two global giants are not just offering lip service, either; their payment cards and technology are already powering a number of platforms and service providers within the crypto space. The likes of Coinbase and Binance crypto exchanges use either Visa or Mastercard to power their crypto debit card services.

Visa’s and Mastercard’s relationship with crypto is growing

Visa’s public affirmation of its positive stance toward cryptocurrency payment services reflects its drive to remain a leading player in the global payment network. As highlighted in its “outlook on new digital currency payment flows,” the company admits that a growing body of players in the traditional financial sphere has been looking to plug into the crypto space: “It’s a concept that is gaining traction beyond fintechs.”

The company has already established a working relationship with some leading cryptocurrency-based firms in 2020, including Coinbase and Fold. This is in addition to more than 25 cryptocurrency wallets that are connected to Visa’s systems. Visa also has its fintech-focused accelerator program called FastTrack, which allows tech firms including cryptocurrency and blockchain-based companies to access its systems and network.

The company has also been developing its own cryptocurrency projects that include an investment into tech firm Anchorage, which builds security infrastructure for the cryptocurrency ecosystem. Its research team has also been working in the blockchain space for a number of years, culminating in the creation of the white papers for the Zether and FlyClient projects.

Furthermore, Visa has been involved in helping shape regulations and policies toward cryptocurrencies around the world. It has worked with the World Economic Forum to develop recommendations for central banks looking into the use cases of central bank digital currencies. Cointelegraph reached out to Visa for additional insights, but the company declined to provide any further information other than its blog post.

Mastercard has been actively encouraging crypto exchanges and payment service providers to sign up to their Accelerate platform in an effort to expedite the process to become partners by fast-tracking the onboarding of new crypto debit and credit card providers while providing added assistance for market entry and expansion in different countries. Nevertheless, prospective partners need to meet stringent requirements set by Mastercard. This includes high levels of consumer protection and compliance with AML/KYC regulations. 

This move to collaborate with the crypto industry comes off the back of the news that Wirex became the first cryptocurrency platform granted a Mastercard principal membership. Part of the functionality allows users the ability to instantly convert cryptocurrencies into conventional fiat currency. An added benefit is a rewards program that gives users 1.5% of purchases made with these cards in Bitcoin.

Bridging the divide

Recently, Binance confirmed that a limited run of its Binance Cards is being shipped to Europe. The move adds real substance to the statements made by Visa and Mastercard, as users are beginning to have access to these card services through some of the biggest players in the cryptocurrency exchange space.

According to Josh Goodbody, the director of European and Latin American growth and institutional business at Binance, traditional banking cards are a “bridge between the crypto and traditional finance,” adding: “Crypto debit cards provide a tangible and frictionless way to spend your crypto, and it provides users with the ability to incorporate crypto into their day-to-day lives.”

Goodbody declined to go into detail about the direct working relationship with Visa but stated that the acquisition of cryptocurrency payment platform Swipe would allow Binance to tap into an established network of regional service providers where the company hopes to bring new users into the cryptocurrency space. Goodbody believes that mainstream financial firms will have a key role to play in this:

“Visa and other networks’ willingness to work with the blockchain industry is a very positive vote of confidence for the further adoption of cryptocurrencies. Not only are traditional technology providers facilitating adoption, they are actively participating in the development of the ecosystem — we see this as an opportunity to further the adoption and accessibility of cryptocurrencies.”

Crypto analyst Mati Greenspan also complimented the move by Mastercard and Visa in the Quantum Economics email newsletter from late July, saying: “As far as fundamentals are concerned, this is about as bullish as it gets for Bitcoin and the gang.”

Netanel Kabala, the chief analytics officer and co-founder of payment platform Simplex, told Cointelegraph that his company has been working alongside Visa and Mastercard for seven years. The relationship has allowed the company to open up cryptocurrency offerings to new users exploring alternative investment methods: “Crypto adoption is growing globally as people seek out alternative investment avenues.” Kabala identified a lag time for new users being introduced into crypto, but the integration of mainstream financial institutions like Mastercard and Visa is a strong signal:

“From an analytics standpoint, we’re seeing many new users enter the crypto world. With every new technology or advancement, it often does take some time before the general public incorporates it into the mainstream. While we definitely believed this mainstream adoption would have come earlier, it seems to be starting now.”

Simplex CEO Nimrod Lehavi believes that there is a more receptive perception to the potential benefits of cryptocurrency, mainly driven by people who want to wrestle back control of their assets and ability to transact independently: “Anything that lowers friction and helps people gain full control of their assets will spread adoption, and crypto-connected debit and credit cards are a key component in that regard.”

Financial industry leaders like Mastercard and Visa vocally supporting and actively working with cryptocurrency and blockchain firms add more credence to the value and utility of these services. Lehavi believes that this will open the door to more users that have not been exposed to digital assets: “The support of major players removes a great deal of the uncertainty people might have regarding cryptocurrencies and will enable them to discover digital assets for what they are.”

Put to Good Use: Ethereum Racks Up Serious Numbers to Set Benchmarks

The popularity of DApps, DeFi tokens and their increasing market share of the Ethereum ecosystem as a result of platform’s evolution?

Ethereum’s dominance as the preeminent smart contract blockchain platform has been boosted by the popularity of decentralized finance and decentralized applications tokens in 2020, with ERC-20 tokens now accounting for nearly half of the assets on the blockchain.

The smart contract platform has been in existence for just under five years and, in that space of time, has established itself as the blockchain of choice for DApp developers. Adding substance to that claim is data indicating that Ethereum has overtaken Bitcoin as the blockchain with the highest daily settlement value.

This is largely due to the sheer amount of capital that has been raised by various blockchain projects that have been built on the Ethereum blockchain. Ethereum itself raised over 31,000 Bitcoin (BTC) in its 2014 initial coin offering — worth around $18 million at the time. Now, Ethereum occupies second place in the overall cryptocurrency market cap at around $30 billion.

It’s a feather in Ethereum’s cap, shining a light on the utility of the platform as a means to build new, blockchain-based projects and products that are improving a number of industries around the world. In the same breath, the rise of DApps and DeFi applications could affect the future of Ethereum as a platform, as developers look for platforms that are best suited for whatever project or system they need to build. 

Enter the competitors

Ethereum is not the only smart contract blockchain platform out there. As analytics firm Messari pointed out in a recent newsletter to subscribers, rival platforms have been netting sizable amounts of capital during initial investment rounds. Proof-of-stake-based smart contract blockchain platform Algorand, EOS and Tezos are perhaps Ethereum’s biggest competitors, commanding a sizeable portion of the overall smart contract platform market share.

Furthermore, Messari indicated that in the past 12 months, over 13 smart contract blockchain projects have raised over $300 million in fundraising rounds. The inherent trust placed in these projects is evident in the amount of capital pouring into their coffers.

Cointelegraph reached out to Messari research analyst William Withiam to delve deeper into the ramifications of these new industry players entering the smart contract space. He believes that it is somewhat surprising to see Ethereum-like projects raising high valuations, given that the smart contract market is crowded. However, there is space for others to stake a claim to some of the market share according to Withiam:

“The total addressable market (TAM) for these platforms, which are vying to be monies, is potentially huge. It might make sense for investors to turn to greener Smart Contract Platforms as a hedge against ETH. As for longevity, while funding is a factor for attracting new users and developers, the more determining factor might be the application and developer ecosystem. Composability standards are sticky. Ethereum’s ecosystem is far more robust than others at this point.”

ERC-20 popularity is a product of Ethereum’s success

Ethereum’s success as a platform is also observable in the popularity of ERC-20 tokens and their climbing share of the overall market cap in the blockchain’s ecosystem. Ether (ETH), the native currency of the smart contract platform, now accounts for just 51% of the total value of the Ethereum network. The other 49% is made up of the various ERC-20 tokens that power the plethora of projects built on the platform.

Withiam believes that the growth of ERC-20 tokens and their share of the market cap in the Ethereum ecosystem is a natural process in the evolution of the smart contract platform: “It’s the natural evolution of these general development platforms. Value will eventually travel up the stack and into the application layers, where projects might have more traditional revenue-generating business models.” 

The dilution of Ether’s share of the overall market cap also adds an additional layer of security to the network. Potential attackers are far more inclined to attack second-layer projects than the Ethereum blockchain itself. As EthHub founder Anthony Sassano put it: “There are ‘attacks’ happening all of the time on individual smart contracts and these attacks are both easier to engineer and much cheaper to pull off than attacking the entire network.”

ETH on top, but scalability is still a concern

Even as competitors enter the market and threaten to steal a slice of Ethereum’s virtual pie, the preeminent smart contract platform continues to be a leading force in the blockchain world. Once again, Messari produced data this month showing that Ethereum has become the most used blockchain platform worldwide in terms of settlement value. It has even surpassed Bitcoin, thanks to the surge in popularity of DeFi and DApp tokens that are based on the Ethereum blockchain.

Ethereum has Tether (USDT) to thank for this trade volume milestone, with over $500 billion in settlements made in 2020 solely by stablecoins on the platform. The Ethereum blockchain handles nearly 60% of the circulating supply of Tether tokens.

Related: Ethereum 2.0 and Polkadot Offer Alternative Solutions to Scaling Issue

Adding kick to the proverbial cocktail of Ethereum’s wide-ranging utility is the surge of DeFi projects running on the platform. This raises some interesting questions about Ethereum’s ability to handle the ever-increasing volume of platforms and users on the blockchain. Ethereum has been experiencing sky-high transaction fees due to the popularity of USDT, DeFi platforms and DApps on the network. While this gives credence to the efficacy of Ethereum, it means that users are being hit with high fees and longer waiting times for transactions to be processed.

This puts a spotlight on the highly anticipated move to Ethereum 2.0 in the next 12 months. The transition from a power-hungry, proof-of-work system to an energy-efficient PoS, sharding system promises to alleviate much of the stress currently placed on the Ethereum blockchain. As Withiam explained, the switch to Serenity could hold the key to ensuring Ethereum remains the smart contract blockchain of choice for developers in the space, if everything goes smoothly:

“From an optics standpoint, an unsuccessful switch wouldn’t look great. But Ethereum might be able to function at a high level if layer-2 scaling solutions and stateless client research continue to progress.”

Crypto Twitter Hack Recap: A ‘Wake Up Call’ for Centralized Platforms

The recent high-profile hack of Twitter accounts where 12 BTC was stolen is being investigated, and some exchanges may already know who did it.

July 15 will go down as an infamous day for Twitter, as an unknown attacker managed to take control of a number of accounts on the social media platform before duping unwary users into a Bitcoin giveaway hoax.

The event grabbed media attention, as some of the world’s most notable companies, politicians and business leaders had their accounts compromised before sharing similar messages touting a Bitcoin (BTC) giveaway that required users to send coins to an address before receiving double that amount back.

The likes of Tesla founder Elon Musk, former United States president Barack Obama, 2020 U.S. presidential candidate Joe Biden, Amazon owner Jeff Bezos as well as Microsoft co-founder Bill Gates had their accounts taken over to share similar messages telling users to send $1,000 to an address in order to receive $2,000 in BTC in return.

Tweet

The company Twitter accounts of Apple, Uber and CashApp were also used to share the duplicitous messages. The accounts of Hollywood celebrity couple Kanye West and Kim Kardashian and of rappers Wiz Khalifa and the late XXXTentacion were also victims, among other famous people.

Notable cryptocurrency figures Changpeng “CZ” Zhao, Justin Sun, Charlie Lee, King Cobie and AngeloBTC also had their accounts hacked. Major cryptocurrency exchanges Binance, Coinbase, Bitfinex and Gemini fell victim to the attack along with the Twitter accounts of Bitcoin and Ripple.

Some of these accounts did not directly list the same Bitcoin address as Musk and others but rather prompted users to visit a malicious website in order to be considered for a fake 5,000 BTC giveaway. Users would allegedly receive double the amount of BTC they sent to the given address.

The website has since been taken down, and the domain registration information has now been removed from the Whois domain registration database for privacy reasons. Nevertheless, the name of the registered owner and their physical address was widely published.

The latest search of the BTC address shared by Musk and other compromised Twitter accounts shows that it has received 12.86584703 BTC since the heist began. The attackers also tried to gain control of Cointelegraph’s Twitter account but were unsuccessful.

For some of the unfortunate targets of the hack such as CZ, who is the CEO of Binance, such a large-scale hack of Twitter accounts belonging to high-profile users and the theft of over 12 BTC is “a wake up call for social media platforms.”

An inside job?

There’s evidence that the attacker may have been helped by an existing Twitter employee or developer, as they had access to the administrative panels of the various accounts that were compromised. Twitter confirmed that the attackers had accessed internal employee tools that allowed them to take full control of the various accounts. Other users on Twitter speculated that the attackers changed either the phone numbers or email addresses for verification in order to take control of the accounts.

Vice’s Motherboard reported that screenshots of a hacker using an internal Twitter user administration tool on a number of the accounts in question were being shared among hacking groups. The publication also claimed that hackers confirmed they paid a Twitter employee in order to gain access to the tools needed to carry out the attack.

For example, a screenshot of the admin panel of Binance’s Twitter account was shared and widely published across social media. It’s understood that Twitter then began removing screenshots of user admin panels that were posted by various accounts on the platform — given the sensitive information displayed on these pages.

Twitter then took measures to curb any further damage by locking the affected accounts and removing the nefarious tweets. Following that, the social media platform then limited the functionality of a larger group of verified accounts while it investigated the situation. As a result, users began to experience limited functionality. The Whale Alert Twitter account informed its following that the changes meant that its bot could no longer alert users with automated posts on the platform.

A hidden message

Adding intrigue to the saga is the discovery by users on Reddit of a not-so-hidden message in one of the transaction outputs. The sender of this particular transaction spent $11 in transaction fees to have the following text included in the tx output:

“Just Read All. Transaction Outputs As Text. You Take Risk When Use Bitcoin. For Your Twitter Game. Bitcoin is Traceable. Why Not Monero.”

What is not clear is whether the sender of this message was responsible for the Twitter hack or just another user taking the opportunity to tout the privacy-centric cryptocurrency Monero (XMR).

Crypto on the move

A little over 24 hours after the hack, the attackers began to move some funds to an address that had previously sent Bitcoin to wallets on BitPay and Coinbase. The various Twitter accounts that were compromised had prompted users to send their BTC to one address, but the funds have now been moved to another address.

Blockchain analytics company Whitestream has identified three different transactions from the address to these mainstream cryptocurrency exchanges. One involved a transfer of 1.2 BTC in May, while the latter two transactions were made two days before this ongoing Twitter debacle.

Cointelegraph has also reported that Binance, Coinbase and BitGo may have information that could identify those behind the hacking incident. Cointelegraph reached out to Binance’s CZ to find out if Twitter had divulged any details of how hackers gained control of the company’s account as well as his personal profile. CZ confirmed that there had been no information from Twitter regarding who had been responsible for the attack.

Looking at the incident from an ideological perspective, CZ believes that the breach does not necessarily reflect badly on Bitcoin and proves that the cryptocurrency is inherently valuable. On the flip side, CZ says it’s hard to argue against the idea that the hack has reflected poorly on Twitter and its internal security system, which should lead to improvements:

“We believe this is a good wake up call for all social media platforms to revamp their security practices given the increased adoption of cryptocurrencies. Social media platforms are no longer just a place to share a selfie, it can and will be used for financial transactions and even crime. Stronger security needs to be built into these platforms.”

CZ highlighted the reality that many social media platforms don’t even offer two-factor authentication options. This was the case with Twitter until recently, but even the introduction of 2FA was made redundant by other security options that bypass its efficacy:

“Twitter added the 2FA feature not long ago, but its implementation is flawed and leaves the ability for an attacker who brute-force attacks your account to lock the original owner out of the account. It even resets 2FA and email address, which defeats the purpose of 2FA. I tweeted about this less than a month and half ago.” 

If it was a hack on Twitter’s back-end administration system itself, CZ suggested that Twitter and other social media platforms need to “quickly move to a zero-trust security architecture where even internal employees can’t make these types of account take-overs.”

CZ believes that this hack shines a spotlight on what he described as an “inherent flaw built into the centralized web,” which has unfortunately involved Bitcoin as the method of stealing funds. However, the Binance CEO believes that there is a positive to come out of the high-profile event, as attention will now be set on fixing the issue: “This is something we, the crypto industry players, have been asking for a long time, and it will finally get real attention.”

A reminder to practice good cybersecurity measures

Cybersecurity company Kaspersky also weighed in on the series of events that have transpired in a correspondence with Cointelegraph. Kaspersky’s threat research and security intelligence communications officer, Blair Dunbar, said that the company was only able to draw conclusions on the facts that have been publicly confirmed:

“Twitter wrote that several of its employees were victims of the attack. This suggests that the criminals attempted to gain access to the platform’s infrastructure through their accounts. In addition, the fact that the criminals were able to immediately gain access to such a large number of accounts suggests that something internal in the system was compromised.”

According to Dunbar, the motive behind the attack seems to have been financial gain, which points to a criminal group. The company believes that a nation state would have used the access to collect “private information, such as DMs from persons of interest” rather than taking control of high-profile company accounts such as Uber, Apple and the various exchange accounts that were compromised.

While the situation was a negative one for both Bitcoin and Twitter in terms of public perception, Dunbar believes that it does not necessarily mean that the cryptocurrency is only used as a vehicle for hackers. “Any criminal can abuse cryptocurrency for their own malicious purposes, but that does not mean that the cryptocurrency itself is to blame.” Furthermore, he thinks that Twitter will bounce back from the incident: “As for Twitter, they will need to work to regain users’ trust. That said, they seem to be taking the breach seriously.”

According to Dunbar, the situation is a stark reminder that users of social media platforms and online tools should be aware of the threat of hacks and nefarious organizations, and practice good safety measures. But most importantly, users “should be skeptical even if this information comes from a supposedly trustful source.”

Likewise, CZ offered a reminder that the public should do its due diligence when it comes to any online giveaways, donations and projects: “This is also an educational opportunity for the mass population and an important step for people to learn how not to fall for online scams, even if your favorite idol asks you to donate or transfer funds.”

DApps Need to Nail Usability to Move From Crypto Niche to Mainstream

Yield farming is driving a boom in DApp and DeFi use, but user experience improvements will be key for future adoption in the next five years.

From CryptoKitties to Compound, decentralized applications and decentralized finance have become increasingly popular in the blockchain space, but the sector has gone through a fair share of teething problems since DApps first appeared in 2017.

DApps were popularized around the same time that Bitcoin (BTC) experienced a monumental surge in value toward the end of 2017. Ethereum quickly established itself as the protocol of choice for blockchain developers to build and launch DApps, and the success of projects such as CryptoKitties proved that people were actively looking to get involved in the space. CryptoKitties was so popular at the time that the Ethereum network took major strain due to the influx of users and subsequent transactions for the crypto collectibles.

In the three years since those lofty highs and public hype, there hasn’t quite been the same level of fanfare around DApps. This is understandable given the sheer amount of public interest that went into the cryptocurrency and blockchain space in 2017, but it doesn’t mean that the DApp space has waned.

In fact, the latest market report released by Dapp.com shows that the overall user base of DApps and DeFi platforms on Ethereum increased by nearly 100% in the second quarter of this year. 1,258,527 active DApp users is an all-time high for the Ethereum ecosystem.

It would be remiss not to mention that Ethereum is not the only blockchain protocol powering decentralized applications: EOS, Tron, Neo and Steem sit alongside Ethereum as the biggest blockchain-based platforms that allow the development and running of DApps, according to Dapp.com. All of these platforms have an important role to play in the proliferation and continual development of decentralized applications, as more companies and developers begin to explore the possibilities of the technology.

Positive trend for DApp use

Cointelegraph reached out to Dapp.com to get an accurate set of data on the number of DApps and their users since platforms such as Ethereum allowed for their development. Kyle Lu, CEO of Dapp.com, shared data and charts that show the trend of DApps being deployed on Ethereum alongside the number of users: “You could see that it is a good trend of usage climbing as more dapps were built and more users are engaging.”

Number of Ethereum-based DApps and users

The cryptocurrency and blockchain space has gone through plenty of change since 2017, and a number of factors had an effect on the development and proliferation of DApps. Lu believes that new use cases by businesses built on the technology is a major reason for the continuous uptick of users:

“We’ve been monitoring the whole DApp market since 2017. A main reason driving interest and usage of DApps is innovation of business models — all the ’hype’ in the DApp area is driven by businesses and products delivered in a way that people haven’t seen before.”

Lu highlighted a number of projects that have legitimized DApps and driven interest in their use and development. In the fourth quarter of 2017, Lu identified CryptoKitties as a “unique digital asset put on blockchain for the first time.” In 2018, Blockchain-based games that use NFTs and offer play-to-earn features were a big driver of interest. He also highlighted Fomo3D, a “transparent ponzi scheme” built on blockchain, as well as TRONbet (now known as WINk), which is a blockchain-based gambling platform with transaction mining.

Jon Jordan, communications director at DappRadar, told Cointelegraph that the boom in interest in 2017 was driven by a peak in cryptocurrency market values across the board. CryptoKitties was once again recognized as a factor, in addition to the launch of decentralized exchanges such as Idex and ForkDelta. The emergence of platforms such as Tron and EOS also played a big part in the development of the ecosystem.

But there was also a downside for Jordan, as according to him, most DApps “were quickly thrown together to make a buck, and most are now inactive.” He added: “The drop in crypto prices in late 2018 also had an impact across all dapp developers and resulted in many underfunded teams dropping out of the space.” According to Jordan, 2019 was the year for gambling DApps on Tron and EOS, while DeFi applications began to gain traction later in the year:

“More importantly on Ethereum mid-to-late 2019 was the stage at which DeFi dapps — notably MakerDAO, Uniswap, Kyber etc — started to gain traction. By the time MakerDAO relaunched DAI with multi-collateralization in November, most of the building blocks were in place for what we now see — a vibrant DeFi ecosystem that is attracting billions of dollars of value through novel interactions between dapps.”

Yield farming driving 2020 fanfare

DeFi has become increasingly popular in 2020 due to users trying to maximize yield farming, as Lu and a number of other experts highlighted to Cointelegraph. The Dapp.com CEO directly attributed the second-quarter spike in users to yield farming and an increase in users on the Compound decentralized lending platform: “Yield farming has created a strong boost for Ethereum token holders to stake their assets in DeFi dapps for interest return.”

Jordan echoed Lu’s comments that yield farming is a major reason for the boom in users in the second quarter, unpacking the phenomenon in a conversation with Cointelegraph and giving his opinion on what is drawing so many users to the DApp ecosystem:

“During Q2, usage has clearly been driven by the ability to generate a lot of value by the Yield Farming of new tokens such as Compound’s COMP token. [...] It’s no surprise that a lot more people are now using Compound because this is effectively free money being given away when you use it. Compound usage in June was up 4x compared to April.”

Vadim Koleoshkin, co-founder of DeFI service provider Zerion, believes that yield farming may have drawn in a swathe of new users, but the utility of DApps and DeFi platforms has led to retention of these users:

“Yield farming in DeFi attracted a lot of users. A large portion of the new users came for the yield but ended up staying for the convenience in managing their money in a decentralized manner. There are also a few games and gambling websites with a large number of users. Data, privacy concerns, and lack of access to financial services worldwide will drive the adoption of a new type of apps built on the decentralized stack.”

Improved user experience key to improving DApps and DeFi

There seems to be a unanimous belief that the future growth of DApps and DeFi is dependent on improvements to user experience, ease of access and functionality. Dapp.com’s Lu believes that developers have been focusing on creating easy-to-use, friendly applications. In the past, users may have been daunted by the complexity of DApps and their features: “With all those improvements made, mass adoption is just a matter of time when we have more innovative products being launched.”

Jordan offered a similar take on the challenges facing DApp developers and companies, pointing out two key areas that have been a particular sticking point: Products need to be “as good and accessible as traditional web products and also have all the advantages of using a blockchain.” He added:

“Onboarding users in a streamlined way has been the second major challenge, although this has now been fixed by new ways of ensuring security and account recovery while also remaining non-custodial.”

Koleoshkin said that paving a smooth road for new users to explore and begin using these decentralized platforms is key. However, there are still some barriers to entry that make it difficult for people who are unfamiliar or completely new to the blockchain and cryptocurrency space:

“New users not only need to have a wallet or extension installed, but they also need to know how to use it properly with Dapps. Once this initial hurdle is overcome, the overall experience becomes much more accessible and intuitive.”

Speaking at the digital conference Unitize on July 9, Richard Ma, co-founder and CEO of Quantstamp, highlighted security concerns as a major hurdle facing DApps and DeFi applications. Ma cited the theft of $26 million from various projects this year as a cause for concern. In order to combat this, Ma said that “it’s crucial to have proper security ahead of time.”

An amalgamated future

It’s clear to see that a large number of users in the blockchain space have realized the value of DApps and DeFi, and this has only been accelerated in 2020. The future of the space certainly looks promising, but what it will morph into is subjective.

Jordan believes that in the next five years, people might not even realize they are using platforms that are powered by blockchain technology: “My view is that we’ll see a big jump driven by consumer-facing Dapps that don’t require any blockchain knowledge, and don’t even promote themselves as using blockchain.” He added that new blockchain platforms will transform users’ experiences, from “Eth 2.0 to Cardano, Flow (from CryptoKitties dev Dapper Labs), Near and Harmony.”

Koleoshkin went as far as saying that the term DApp might not even be used in a couple of years. This is mainly due to the fact that “Dapps are a separate category of apps leveraging native payments functionality, distributed storage, and smart-contracts functionality. More developers will use these tools to build a better user experience, but they wouldn’t be called a DApp.”

BTC Rush: High Prospects for Bitcoin Price as Mining Investments Boom

Fresh investments into mining equipment by smaller companies signals an optimistic outlook for the future of Bitcoin.

Recent investments into cryptocurrency mining equipment by smaller players could be a positive signal for the longevity and value of Bitcoin (BTC). In late June, United States-based blockchain firm Core Scientific ordered over 17,000 of the latest Bitcoin mining ASIC machines from Chinese hardware producer Bitmain. The news made waves in the industry as the largest known order of Antminer S19s by a single operator.

Core Scientific will use some of the machines for its own operations while the rest will be used for its cloud-based mining services for clients. Furthermore, one of its major clients, Horizon Kinetics, has increased its investment with Core Scientific in order to access the new mining equipment from Bitmain.

The news is the latest in a string of investments and developments of major mining operations outside of China, which has long been considered the hub of the global Bitcoin mining ecosystem for over half a decade. Major investments by smaller firms looking to increase their footprints in the mining space not only create positive sentiment for the industry but also show that smaller players are actively looking to get involved in a space that has been dominated by bigger companies.

Halving means efficiency

Investments into cryptocurrency mining equipment by smaller industry participants suggest that there is growing confidence in the sector. Despite the fact that the Bitcoin mining reward went through its most recent halving event, operators seem to be playing the long game, indicating an optimistic outlook for the industry.

Cointelegraph spoke to Jason Deane, an analyst for financial analysis and advisory firm Quantum Economics, who has hands-on experience in the mining industry. The investment into miners made by Core Scientific illustrates the optimism in the sector, according to Deane. “They clearly feel this, or they wouldn’t do it,” he said. Additionally, Deane believes the equation is quite simple when one looks at the numbers:

“Mining is a business that is absolute in the key numbers, so it’s simply a question of assessing profitability on an ongoing basis. While difficulty and hashrate are variable and closely related, we can assume that both will increase over time. If the Bitcoin price rises significantly, we can also be quite confident that they will rise much faster. It all comes down to cost and protecting position — if you can secure power that ensures your breakeven is very low, say $6,000 or less per Bitcoin, then you have good insurance against whatever comes next.”

It is also important to consider the price of the latest mining equipment to understand the implications of major investments in a large-scale operation. A new Antminer S19 retails for $1,785 on Bitmain’s website. If Core Scientific bought its miners at that price, that figure alone would be around $30 million for 17,000 units.

Nevertheless, Deane is not surprised by the value of investments into the newest mining hardware, even after the latest halving, and suggested that some miners could operate profitably up until the next halving, which is due to take place in 2024: “The feeling going forward is broadly bullish and there are no more adjustments for four years,” adding that the “current equipment, purchased so early in this halving cycle, has a good chance of getting a good ROI and may even be good for the whole period.”

Johnson Xu, head of research and chief analyst at TokenInsight, told Cointelegraph that a number of firms with access to capital had been preparing to invest in mining equipment before the halving. The move was spurred by the opportunity to increase operational efficiency by selling older equipment for new machines:

“I think the Antminer S19 deliveries happening straight post-halving is another contributing factor towards recent massive investments into mining equipment. The S19, among others, is one of the latest SHA-256 mining ASICs on the market, thus plenty of buyers are willing to acquire the latest generation machines in order to upgrade their existing operations or purely for the purpose of opening a new mining farm.”

In an opinion piece previously published by Cointelegraph, Xu examined the hash rate decline of Bitcoin following the halving event and suggested that it could have positive effects on the ecosystem. He backed up those sentiments in his latest correspondence, highlighting the prime opportunity for those miners who haven’t done so yet to upgrade hardware, adding: “For those miners who cannot lower their electricity expenses, upgrading to the most efficient miners is the best strategy for longer-term profitability.”

Simon Peters, a market analyst for eToro, also gave some insight into the recent surge of investments in mining hardware in the shadow of Bitcoin’s halving in May. Peters believes that the current situation of the market further incentivizes operators to become efficient and plan ahead:

“There is even greater incentive for miners to become more efficient. Miners must find ways to decrease overheads and stay profitable, even if it means investing greater capital at this moment to become more efficient in the future.”

Major investments a boon for Bitcoin’s longevity

The lead up to Bitcoin’s latest reward halving was awash with wide-ranging predictions on the impact it would have on the price of the preeminent cryptocurrency as well as its effects on the mining ecosystem.

There was an immediate impact on the Bitcoin mining difficulty in the days after the halving event, but the overall sentiment was that the halving did not have an overly negative effect on the Bitcoin ecosystem. Any major investment into a particular industry or business is bound to instill positive sentiment for the future, and Deane believes it illustrates a changing sentiment toward Bitcoin:

“I’d consider it a positive endorsement of the industry as a whole and a demonstration of the belief in the longevity of Bitcoin itself. We’re leaving the days of Bitcoin being experimental or ’only for geeks’ behind and moving into a new era of professionalism and application. It makes perfect sense that this level of investment is happening now.”

That sentiment, according to Xu, is evident in the strong inflow of capital into the mining sector due to the perception of Bitcoin mining being a major component of the cryptocurrency ecosystem: “Although the mining ecosystem can still be considered as opaque, lacking sufficient data and information, we have seen many industry participants working together to bring transparency to the sector.”

Peters also argued that these recent events could also strengthen the Bitcoin mining ecosystem by making it more efficient, as “only the strongest and most efficient mining operations will survive,” but he also provided a potential downside in that regard: “On the flip side, there is now a greater fear around centralisation of hashpower and that too much of the network’s hashrate is being controlled by only a few mining pools.”

Peters raised another interesting byproduct of investment by smaller operations: mining power moving away from China. The country has long been the geographical home to miners accountable for a large portion of the Bitcoin hash rate. Peters offered three potential reasons for this:

“Greater appetite from venture capitalists to invest in crypto from these countries; more favourable conditions to run a mining operation both in terms of cooler climates and access to renewable energy; and lastly, existing mining operations from China expanding into other countries to hedge their risks.”

Not Just a Pretty Name: Blockchain Creating Real Value in Traditional Industries

Blockchain technology is transitioning from a conceptual tool that powered the ICO boom into a value-adding service for mainstream industries.

Blockchain technology has proliferated in a number of industries outside of the cryptocurrency space in the decade since Bitcoin’s (BTC) inception. The underlying technology of the preeminent cryptocurrency went under the radar in the early years of cryptocurrency adoption before projects such as Ethereum began to explore the range of possibilities of blockchain networks.

While many startups looked to harness blockchain technology to power new cryptocurrencies, a number of mainstream technology firms began building their own enterprise blockchain systems that could be rolled out. IBM and Microsoft are giants in the information technology space and have led the development of many digital tools that are used around the world. Both firms have gone on to develop their own blockchain platforms that are built to scale in order to service everything from small businesses to global corporations.

Indeed, the mainstream IT sector could be at the forefront of efforts to drive the uptake and proliferation of blockchain technology across industries. But which industries are actually looking to use blockchain technology to renew their systems and offerings, and is the technology needed in others?

Survey suggests blockchain adoption rises

The latest global blockchain survey from auditing giant Deloitte has revealed that an increasingly larger number of those that respond to its annual deep dive into the industry are actively developing blockchain projects. The research indicates that there was a 16% increase from last year’s figures, which are based on a survey of senior executives and practitioners across 14 countries to ascertain if they had already implemented blockchain services or projects in their respective organizations.

An interesting takeaway was the constantly increasing percentage of respondents that believe blockchain technology will be a critical part of their businesses and a significant priority in their planning. The report gives a broad overview of the current attitudes while providing a good sense-check of the potential for blockchain technology to be more widely used.

John Wu, the president of AVA Labs, told Cointelegraph that the Deloitte report confirms a growing body of research that highlights the increasing adoption of blockchain and digital assets. Wu stressed that companies that are more proactive in exploring the technology could stand to gain a lot more in the coming years:

“Institutions and individuals need to be best equipped to manage financial risks, protect investments, and even grow our assets when the next crisis hits. Widespread adoption of blockchain technology is a significant stepping stone in building a new system robust enough to cope with the challenges that lie ahead, and will reward innovators that take action today. This dramatic and rapid evolution of market structure toward decentralization is rapidly leaving the ‘ifs,’ and becoming a ‘when.’”

Rising demand for blockchain services

The Linux Foundation launched Hyperledger Fabric in 2015 and has since collaborated with a number of leading technology companies such as IBM and Intel. Hyperledger allows developers to build various blockchain applications and networks that can be molded and scaled to specific use cases and needs. 

Marta Piekarska-Geater, the director of ecosystem for Hyperledger, seemed to echo the findings of the Deloitte report, explaining that there is a steady growth in interest toward blockchain systems. There seems to have been a clear path from conceptual ideas to working projects over the past few years, as Piekarska-Geater stated: “There had been a steep adoption curve especially over the last two years.” She added that “it took some time for the use cases to solidify, but production systems are now supporting critical business transactions around the world.”

Proponents of blockchain have long hailed the endless possibilities of the technology and the ability to apply the infrastructure to manage and solve a variety of problems across different industries. Piekarska-Geater told Cointelegraph that these sentiments ring true and that the sheer variety of applications of blockchain add weight to that perception:

“Companies and organizations are turning to blockchain to trace assets and products, trigger and track transactions and create a layer of trust between parties that don’t necessarily trust each other. Blockchain has been proven valuable for a range of use cases including cross-industry collaboration and consortiums, provenance tracking, managing digital identities in new ways that actually increase privacy and enabling new models for digital financial transactions.”

The broad applications of blockchain make it difficult to pin down a specific industry that is particularly interested in using the technology. Hyperledger technologies appear to be used across various industries, from healthcare and manufacturing to retail and mining. Nevertheless, two key characteristics providing value are interoperability and governance.

Blockchain creates measurable value

As blockchain technology shifts from proofs-of-concept and pilots to working solutions, various industries are beginning to see the actual value of adopting new systems. Deloitte’s “2020 Global Blockchain Survey” also shows that some respondents feel blockchain has at times been overhyped. This was evident in Bitcoin’s meteoric surge in value in 2017 and the sheer amount of initial coin offerings and blockchain-based projects launched during that time.

Things have changed over the past two years, and there seems to be more maturity across the ecosystem. It’s a point that Piekarska-Geater raises, which is backed up by measurable business impact:

“We managed to go past the ‘blockchain will sell anything’ and now the industry asks ‘what is the ROI?’ It is not enough to just stick a DLT into your solution to sell your product. And this is a good thing. Initially, the main driver of interest in blockchain solutions was the fact it sold well. Now it is more about the actual business value they bring: the accountability.”

The pertinent question is whether blockchain technology is creating real value and performance improvements in the technology and financial sectors. This will inevitably be the clincher for companies looking at adopting new solutions, and Piekarska-Geater says that perception is changing: “Using blockchain means savings in terms of cost, increasing the availability of information and trust. All industries are past the hype and looking at implementing DLTs to really improve their products,” adding that the focus has also changed significantly: “Companies move from advertising as ‘blockchain’ companies to just talking about their solution.”

What will drive adoption?

As blockchain moves into a space where working solutions are a reality to companies, the adoption of the technology is the next logical step. Nevertheless, there are still various obstacles that will slow down the gradual uptake of blockchain technology by various industries. Piekarska-Geater highlighted a couple of sticking points that need to be addressed in the short term:

“Interoperability is definitely on top of everyone’s minds. Another aspect is the limited number of skilled developers. [...] With time, we will see more and more students graduating from universities that will be able to join the workforce.”

Building Empires: Biggest Crypto Exchanges Push for Global Presence

Crypto exchanges such as OKEx, Binance, Huobi, Kraken and Bitmex outline the key challenges they face in pushing to establish global operations.

Cryptocurrency exchanges have an important role in driving adoption around the world, but even the biggest operations face significant challenges when trying to expand their services. The advent of Bitcoin (BTC) and the subsequent development and launch of numerous other cryptocurrencies have changed the way people look at transacting across the world. Dependency on traditional banking systems is no longer the only option available to people.

Blockchain networks and cryptocurrencies are able to bypass conventional financial systems and allow people to transact directly, without having to go through a centralized institution. In an ideal, cryptographically secure world, users would transact peer-to-peer, but there are some barriers to entry for the uninitiated. Therefore, most of those new to crypto use exchanges as their entry points into the ecosystem as they convert their fiat currency into their cryptocurrency of choice. In 2020, users are spoiled by choices with the sheer number of cryptocurrency exchanges operating internationally.

Nevertheless, a handful of these exchanges are attempting to surge ahead of the pack and establish themselves as truly global enterprises. But what are the key challenges they face, and how have they gone about building their respective empires?

A juggling act

It’s clear that building a successful cryptocurrency exchange requires an enormous amount of time and resources as well as the ability to jump through a number of hurdles at any given time.

This is compounded when working across borders and continents, given that many countries have their own regulations and laws around the use of cryptocurrencies and the transfer and flow of fiat currencies. Jay Hao, the CEO of OKEx, told Cointelegraph that there are a number of considerations that make for a complex and challenging business environment, which means that “most CEOs in this business don’t get much sleep.” He added:

“Growing a global cryptocurrency exchange is probably one of the most difficult businesses to be in. There are many challenges from attracting and retaining the right talent to consolidating and expanding your user base, ensuring liquidity, depth of market, and an attractive product offering. You also have to make sure that the exchange is robust and secure, can handle high unexpected amounts of volume with next-to-no downtime, all the while meeting requirements from regulators. The list of challenges is actually endless.”

In a recent interview with Cointelegraph, Changpeng Zhao, the CEO of Binance who is otherwise known as “CZ,” stressed the importance of having a "global mindset" while maintaining a sustainable business model. In order to do this, CZ believes that exchanges need to understand the specific needs of users in different regions. “We have different approaches for various markets,” he further told Cointelegraph, adding:

“To run a global business, we have to make sure we are always offering a solid infrastructure for the users and enhance their experience, which is especially important for the 24/7 crypto space. Then, we have team members from different communities to provide customized products and services to a local market, and ensure our marketing strategy is aligned with local culture, custom and language.”

Huobi’s head of global business and markets, Ciara Sun, shared a similar idea, highlighting two major considerations that the exchange has focused on since its founding: localization and regulatory compliance. Sun told Cointelegraph that having a sound grasp of the wants and needs of users is a driving factor in launching exchange support in new regions:

“Localization doesn’t just mean offering the exchange in a new language. Users in different markets and regions each have different preferences, habits, and requirements, so we need to adapt to each audience and provide local users with highly tailored experiences.” 

As Sun explains, understanding why users in specific countries or regions are looking to use cryptocurrencies also provides some insights into what sort of offerings will work in different places: “We spend a lot of time learning the intricacies of a new market before we enter it.”

Cointelegraph also spoke to BitMEX to gauge its views on the most challenging aspects of running a cross-continent operation. A spokesperson for the company highlighted customer support as a considerable undertaking and one that requires the highest amount of its resources:

“As a 24/7 cryptocurrency derivatives trading platform serving users from around the world, our ability to provide seamless support, regardless of time zone, is an important part of our service. Our Customer Support team is now one of the largest teams within our organisation and offers support in multiple languages.”

A spokesperson for the exchange Kraken told Cointelegraph that regulatory considerations in different jurisdictions are some of the toughest challenges in terms of trying to set up new bases of operation:

“Clear regulatory guidance is important because it helps determine what products we can offer and who we can target with our businesses. If done properly, it can also ensure a level playing field for all competitors. Additionally, education continues to be a focus of ours as well, as there are both awareness and knowledge gaps when it comes to crypto and its benefits.”

Navigating the global waters

So, becoming a global cryptocurrency exchange is not a clear-cut endeavor either, as there is no single regulatory body that exists for the industry. Given that cryptocurrencies have been in existence for just over a decade, regulation is very much down to individual countries and their laws.

Given that most financial institutions around the world face strict control measures from regulatory bodies, cryptocurrency exchanges have had to adopt similar practices. Many of these operations have to abide by Know Your Customer and Anti-Money Laundering guidelines in order to operate.

As OKEx’s Hao explained, the company takes direction from the guidelines of the Financial Action Task Force, or FATF, when looking to branch out to new regions. Nevertheless, Hao believes that a global body overseeing cryptocurrency regulation is an unlikely scenario, forcing the exchange to have a large legal team on board in order to ensure compliance in each jurisdiction where the exchange operates:

“I think that it will be very hard to establish a global regulatory authority for this space as all jurisdictions have their own laws and requirements. They are also constantly changing as the industry evolves.”

Huobi’s Sun hammered home the importance placed on regulatory compliance by its exchange as a fundamental part of its business model. “It's crucial that a crypto exchange meets all local regulatory requirements with the proper licenses to operate,” Sun said, adding: “This requires an enormous amount of time and effort and most ‘global’ exchanges don’t actually bother with this but we believe it’s critical.”

A major takeaway from most of the exchanges is the challenging task of navigating a global landscape that has vastly different regulatory and legal parameters. Sun admitted that it is a difficult undertaking, but said that the first port of call is a country or region’s securities and exchange commissions and its financial regulators, adding: “As of yet, there isn’t a global consensus for classifying and regulating digital assets, so each market is unique with its own complexities.”

Binance’s CZ told Cointelegraph that the lack of a global body that governs all markets is down to the fact that the crypto industry is still in its infancy, meaning exchanges have to work closely with regulators in every single country:

“To take the US for example, it has well-established legal and compliance systems, where a crypto exchange has to apply for various licenses from different states in order to serve citizens of those states. [...] For Binance, we always work closely with local governments and regulatory agencies and operate compliantly in all the jurisdictions we serve.”

Kraken’s spokesperson highlighted how operating in different continents requires specific compliance with various regulatory bodies and watchdogs and the rules that they set out. These considerations go deeper than just adhering to KYC, AML and FATF regulations; they also include following United States sanctions, meaning that Kraken is prohibited from operating in some countries. The spokesperson added: “We are also increasingly cognizant of maintaining compliance with global data protection regulations, such as the General Data Protection Regulation (GDPR) in Europe.”

BitMEX’s spokesperson said that a key driver of success would come down to an exchange’s ability to adapt to regulatory parameters as it continues to develop. Additionally, the exchange sees that regulators all over the world are upping their interest in crypto, adding:

“We welcome their efforts, as they will help to establish greater standards for the cryptocurrency market that will underpin the advancement of this rapidly growing asset class. We believe that the successful platforms of the future will be those that can quickly embrace and maintain these standards.”

Plugging into legacy systems

The proliferation of cryptocurrencies has been slow and steady over the past decade, but the industry has already made the traditional financial landscape aware of itself. Nevertheless, “the new” still has to plug in and be compatible with “the old.” In order to create accessibility for new users, cryptocurrency exchanges have to create fiat gateways to their platforms, which requires building relationships and compatibility with the traditional financial system.

Kraken offered its take on the intersection of cryptocurrency and traditional banking, conceding that the relationship between the two is important to drive adoption of the former. Nevertheless, the apathy of some banking institutions and the difficulty of interfacing and working with such organizations is still a challenge, as it’s “time-consuming to come to terms with these partners,” the company stated, adding:

“Despite the presence of many forward-looking banks, many others are extremely (and unnecessarily) risk-averse when it comes to crypto. This is unfortunate because they are depriving their clients of opportunities to engage with and benefit from this new and exciting opportunity.”

Further challenges are created by countries that try to apply existing laws to govern the use of cryptocurrencies. As Hao explained, “It’s a help and a hindrance” for the growth of cryptocurrency use, as some countries have developed crypto regulations upon realizing that the current framework cannot be adapted, while other jurisdictions are still lagging behind. He added: “This can be to the detriment of cryptocurrency as it all depends on how crypto is defined in the first place.”

For Binance’s CZ, regulation is not necessarily in opposition to cryptocurrencies. CZ believes that supporting regulation can drive innovation and help shape the crypto and blockchain space, much like the evolution of foreign exchange trading: “Given that the forex industry and the crypto industry, both driven by high technologies, share some similarities, forex regulation could serve as a good reference for regulators to formulate more supportive regulatory frameworks for the crypto industry.”

Huobi’s Sun believes that there is a changing attitude toward cryptocurrencies from regulators and the traditional financial system as they slowly gain an understanding of crypto and blockchain systems: “It’s only natural that forex regulation and banking systems have not yet fully caught up,” Sun said, adding that “current regulation continues to evolve as regulators adapt to the changing financial landscape.”

Sun told Cointelegraph that as a result, more and more traditional banking and financial institutions are onboarding the technology and opening up support to cryptocurrencies and exchanges:

“We’re also seeing less resistance from legacy financial institutions and banks. [...] We’ve also partnered with banks to enable fiat gateways for local users in several markets, so while there’s still progress to be made, I believe the legacy banking system is moving quicker than anticipated.”

Ever-changing world

As the various representatives of these cryptocurrency exchanges have highlighted, the global cryptocurrency environment is a complex one. Building and launching a cryptocurrency exchange is a technical and challenging endeavor in and of itself. Taking that exchange and launching support in different jurisdictions adds multiple layers of complexity that require an inordinate amount of resources and energy.

Given the effort required, exchanges that are slowly building a global footprint are surely at the forefront of the industry and are pushing the adoption and acceptance of cryptocurrencies around the world.

Not Your Tulip Trust? Message Calling Craig Wright ‘Fraud’ May Unlock the Case

Legal experts say a message in Bitcoin addresses linked to the Tulip Trust could be used against Craig Wright in his case with Kleiman estate.

Infamous cryptocurrency figure Craig Wright faces newfound legal challenges over more than 1 million Bitcoin (BTC) after addresses listed in the Tulip Trust were used to sign a message labeling him a fraud. Wright has long been a divisive figure within the cryptocurrency community, having made unverified claims of being Satoshi Nakamoto, the founder of Bitcoin.

These claims have been met with derision and disbelief by various prominent industry participants, including Ethereum founder Vitalik Buterin, podcast host Peter McCormack and Bitcoin Cash (BCH) proponent Roger Ver. Wright went as far as filing lawsuits for libel in the United Kingdom against McCormack, while Buterin and Ver were also recipients of legal notices from Wright’s lawyers. Wright’s initial case against Ver was dismissed in a U.K. court, and although he appealed the dismissal, it was then dismissed again by the court on May 29.

Wright has also been embroiled in a lengthy court case relating to the estate of his former business partner since 2018. Ira Kleiman, the brother of Wright’s late business partner David Kleiman, has laid claim to half of 1.1 million BTC that Wright and Kleiman reportedly mined together as part of a group of people who worked on creating the Bitcoin network.

As Cointelegraph has previously reported, the Kleiman legal team is not out to prove or disprove the actual identity of Satoshi Nakamoto, but provide enough evidence in order for their clients to be awarded the claim to proceeds purportedly held by Wright. The case essentially rests on the ability of either proving or disproving that Wright is in possession of various private keys to early wallets that are believed to belong or have been used by Satoshi.

A long history of claims

Wright’s reputation in the crypto community has been under a cloud for many years, given his history of claims and aggressive rhetoric toward industry peers. Back in May 2016, Wright claimed to have access to the cryptographic keys associated with the first Bitcoin blocks ever mined in a blog post — which was subsequently covered by mainstream media outlets, including the BBC, GQ and The Economist.

Wright subsequently went back on his claim that he was Satoshi Nakamoto in a post that was published on his website just days after his initial claims had been made. He refused to make good on a prior promise to further prove he was indeed Bitcoin’s pseudonymous creator by actually moving Bitcoin believed to belong to Satoshi. There have been a number of incidents where Wright has made confusing statements in order to further justify his assertions that he is Bitcoin’s creator. In 2019, he claimed that Satoshi had plagiarized large portions of work from one of his theses written in 2008, adding more to the confusion: “Either I am Satoshi or Satoshi plagiarized me. You can make the choice, I don’t really care.”

Just over a year ago, Wright went as far as filing a copyright claim in the United States for the original Bitcoin white paper, as well as a major portion of the code used to build the cryptocurrency. As previously reported, the U.S. Copyright Office does not check the validity of any statement or claim made to a copyright. Furthermore, it does not legally validate any identity.

The Tulip Trust

Wright’s assertions that he is Satoshi Nakamoto have been intrinsically tied to his ongoing legal battle with the Kleiman estate since 2018, which is demanding half of over 1 million BTC that Wright and David Kleiman had mined together in the early years after Bitcoin’s inception. Wright maintains that he and Kleiman had tied up the BTC holdings into the “Tulip Trust” — which can only be accessed with private keys to the various wallets holding the BTC.

As this Reddit post explains, Wright supposedly split up private keys “into several parts using a Shamir’s Secret Sharing Scheme,” which were then distributed to trustees. Wright lost access to the holdings — a list of addresses in an encrypted file — when David Kleiman died but said that the various private keys that are needed to unlock the BTC held in the trust would be delivered by a bonded courier at the beginning of 2020.

In the months leading up to that, Wright had been ordered to deliver addresses that contained some of the BTC holdings of the Tulip Trust. While he told the court that it was impossible to do that due to the way he had split up the root private keys when the trust was created. Nevertheless, Wright did supply a number of blocks that potentially belonged to him in the Tulip Trust with the help of nChain midway through 2019. That list was met with scrutiny for various reasons, including the fact that some of the blocks’ coin base had been spent.

Media houses speculated that the mysterious bonded courier delivered the package to Wright in January 2020 after his legal team notified the court that he had produced a list of his Bitcoin holdings. Again, this list was heavily scrutinized by the Bitcoin community and was almost identical to the list that had been provided in 2019.

In an interview with Wright published by Cointelegraph on Jan. 23, 2020, he explained that he had set up the trust to protect the funds and had deliberately decided not to be a trustee. That meant that he could not be forced to move funds by a third party. Wright also said that he was still awaiting the delivery of keys to access the funds.

Satoshi strikes back?

Wright’s provision of public addresses to the courts in January could potentially be the fuel to drive the Kleiman estate’s legal case after recent developments. On May 20, news broke that 50 BTC had been moved from an address that contained coins that had been mined in February 2009, some six weeks after the Bitcoin mainnet went live. The address contained a coin base transaction of 50 BTC, which is the transaction containing the reward to a miner.

The cryptocurrency community was awash with speculation that Satoshi Nakamoto may have been responsible for the transaction, given that the address contained coins mined so soon after inception.

Nevertheless, that summation has also been questioned by various industry participants, including renowned cryptographer Adam Back, who cast aspersions on the address being linked to one address identified in the “Patoshi Pattern.” The Patoshi Pattern was identified by Bitcoin researcher Sergio Demian Lerner, who told Cointelegraph soon after the news broke that he didn’t think the transaction had been carried out by Satoshi.

Bitfury’s Crystal also released its own insights into the transactions and echoed Back’s belief that the actions were not carried out by Satoshi. Crystal CEO Marina Khaustova told Cointelegraph that the company’s clustering tool identified that the majority of the addresses did not line up with the Patoshi Pattern address.

However, the address itself is weaved into the Wright vs. Kleiman legal battle, as it is one of the addresses provided by Wright in the preliminary list of addresses of the Tulip Trust. Wright has since denied moving the coins on May 20, while claiming the address was not among those given to the court in January 2020.

Wright was thrown another curveball just days later, as a message calling him a “liar and a fraud” was signed alongside a list of 145 addresses and their corresponding signatures. These addresses all contain Bitcoin mined in the first few years of its creation. Perhaps more damning was the fact that various members of the crypto community verified that all of the addresses were found among the list of addresses listed as part of the Tulip Trust. This has been independently verified by Cointelegraph as well.

The legal ramifications

The Kleiman estate’s legal team has wasted no time pouncing on the fact that these addresses that were listed by Wright are seemingly controlled by someone else and submitted a notice of supplementary evidence to argue that the “CSW Filed List” provided by Wright’s legal team in January was fabricated:

“Wright represented these 145 addresses were part of his bitcoin holdings and were locked in an inaccessible encrypted file. This week, the person that actually controls the private keys to those addresses used those private keys to declare that ‘Craig Steven Wright is a liar and a fraud’ and ‘doesn’t have the keys’ for those addresses — thus proving the addresses do not belong to Wright.”

The Kleiman legal team still believes that Wright has access to these Bitcoin holdings and has been hiding the true list from the court. Cointelegraph reached out to United States-based corporate lawyer Dean Steinbeck to ascertain whether the recent development could be used against Wright successfully by the Kleiman legal team. Steinbeck believes that the information will be used to demonstrate that Wright is not in control of the addresses he’s previously claimed to own:

“This information pretty much confirms what many industry pundits have thought all along: Wright is not Satoshi. This turn of events will negatively impact Wright’s claims. In order for Wright to continue asserting that he has control of these addresses, he will need to argue that either he sent the messages calling himself a fraud or he will need to argue that his accounts were hacked. Either argument is unbelievable to anyone familiar with how crypto works.”

New York-based lawyer Daniel Kelman also weighed in on the situation and the potential effect it will have on the Wright vs. Kleiman case. Kelman told Cointelegraph that these latest developments could have serious knock-on effects for Wright, saying: “The judges have already stated on record that they did not find Wright’s testimony believable.” He added:

“These addresses provide mathematical proof that Wright perjured himself. So, the question now becomes (1) whether this will result in a return of the sanctions from last summer (which were set aside on appeal) and a judgement for billions to Kleiman based on the sanctions (rather than the case’s merits); and (b) whether Wright’s perjury will be referred to a U.S. attorney to bring him up on felony perjury charges.”

As Kelman elaborated, there is far more to the story that needs to be considered and that Wright has potentially cornered himself in this dispute because of his assertions that he is Satoshi Nakamoto, adding that “the backstory to this dispute is more complicated than what we see in court papers.” Kelman believes that Wright went along with the case for the sake of keeping nChain and BSV afloat while also hoping to eventually settle, but once damages began to pile up, it no longer became an option. Kelman concluded:

“What Wright probably didn’t consider before he embarked on his defense is that he could in fact wind up on the hook for Satoshi’s billions by virtue of court sanctions for perjuring himself, which happened last summer, and he managed to have set aside on appeal. Those sanctions could now come back and hand a major victory to Kleiman.”

Nevertheless, it seems clear that these latest moves by entities controlling these legacy addresses could have dire consequences for Wright’s legal case and his reputation. Steinbeck explained that Wright could face a criminal conviction if he’s found guilty of perjury:

“If it is ultimately determined that Wright perjured himself by providing the court with knowingly false information, Wright can face severe legal consequences, including the possibility of criminal action. Perjury is considered a serious offense and is treated as a felony. If Wright is convicted on such a charge, he may be imprisoned up to five years and face hefty civil penalties.”

Making Blockchain Safe and Secure, a Balancing Act That Never Ends

How secure is blockchain technology? Experts weigh in on the complex differences between public and permissioned blockchains.

Blockchain technology has become synonymous with privacy and security, but those very characteristics have been put to the test over the past decade. With historical roots embedded in cryptography, many blockchain and cryptocurrency projects purport to offer unbridled security and privacy measures. The industry is split between public blockchain platforms like Bitcoin and private or permissioned blockchains focused on enterprise use.

Cointelegraph has previously explored the ins and outs of privacy concerns around blockchain technology, but the security of these systems is a major consideration on its own. In the years since Bitcoin’s (BTC) inception, a multitude of cryptocurrencies has been created, along with numerous blockchain projects in the private and public sphere.

The sheer number of working parts and industry participants means that vulnerabilities have been identified and exploited over the years. This is despite the best efforts of those involved to create the most secure blockchains, cryptocurrencies and exchanges.

This article will shine a spotlight on public blockchains and cryptocurrencies like Bitcoin, permissioned blockchains that offer enterprise solutions to mainstream corporate companies as well as privacy coins to delve into the different considerations of their perceived and actual levels of security.

Is Bitcoin secure for the average user?

Given that the use of cryptocurrencies primarily began with individual users and adoption by bigger entities such as financial institutions has been slow, a major concern is the security of blockchain or cryptocurrencies being used by individuals. In order to get an understanding of what makes these systems secure, Cointelegraph reached out to blockchain and cryptocurrency analysis firm CipherTrace. 

John Jefferies, who is the company’s chief financial analyst, identified and separated the different categories that are needed to fully understand the level of security of an open blockchain or cryptocurrency like Bitcoin:

“There are three levels of security to consider: personal, platform and technology. Blockchains provide the technology layer, but the average user must trust the security of the particular wallet or exchange they are using. A well-validated, open-source blockchain built using known, trusted encryption, such as the Bitcoin blockchain, provides the level of security to assure the average user that their transaction data has not been tampered with.”

When asked whether open blockchain systems have provided trusted security and privacy to users, Jefferies outlined two key elements of Bitcoin’s system that answered long-standing problems plaguing earlier digital currency projects. First of all, the Blockchain technology proved to be a major advancement, as it solved the double-spend issue in peer-to-peer transactions. 

Another vital protocol that ensured security was the basis of Bitcoin’s consensus protocol, as Jefferies explained, the blockchain technology also deals with the Byzantine Generals Problem, where a messenger sharing information between generals can deliver false information. However, if all parties receive information that is verified by the majority, the corrupt messengers will be discovered. While these two elements provide robust security to the overall Bitcoin system, Jefferies makes a clear distinction between the security of the protocol and the privacy afforded to users:

“It is a common misconception that Bitcoin was designed to be anonymous, but in actuality, the Bitcoin blockchain is pseudonymous, meaning transactions are publicly visible yet the individual users associated with transactions are not. Satoshi’s white paper only discusses privacy in two paragraphs. If privacy was the goal, it would have been designed differently.”

Cointelegraph also reached out to Stanford University Ph.D. student Florian Tramèr, who recently managed to discover vulnerabilities in privacy coins Monero (XMR) and Zcash (ZEC). A remote side-channel assault would enable an attacker to recover a user’s IP addresses, thereby destroying any semblance of anonymity and privacy of the users in a transaction. 

Tramèr weighed in on the level of security that open blockchain networks, like Bitcoin, offered the average user. He highlighted in a comment to Cointelegraph that Bitcoin’s consensus protocol has proved its efficacy on its own, but the development of numerous third-party applications, like exchanges, has added a number of vulnerabilities to the overall ecosystem:

“The general idea of consensus via proof-of-work definitely seems to be standing the test of time — in terms of security at least, not so much in terms of scalability. [...] On the security side, we’ve seen countless examples of vulnerabilities in smart contracts, wallets, exchanges, etc. From the privacy side, there have also been many studies showing that cryptocurrency transactions are relatively easy to trace and de-anonymize, even in systems, such as Monero and Zcash — mostly because actually achieving good privacy requires a lot of extra care on the user’s side.”

Permissioned blockchains and privacy coins

Private, or permissioned, blockchains have become a go-to solution for big companies and corporates that are looking for distributed ledger solutions for various business challenges. It goes without saying that bigger conglomerates will take no chances when it comes to security and so they turn to permissioned blockchains that are tailor-made and managed by specialist tech companies.

Prime examples are Microsoft Azure Blockchain Service and IBM’s Blockchain platform, which is powered by the Linux foundation’s Hyperledger Fabric. Microsoft Azure Blockchain Service performs a similar function, allowing users to build and operate blockchain networks that scale. IBM Blockchain is aimed at large businesses and corporations and has a variety of existing blockchain platforms that companies can join. Clients can also build and launch their own platforms that can be programmed to carry out specific functions. 

Related: Leveraging Hyperledger Fabric — Enterprise Blockchain Unleashes Viable Solutions

When asked if permissioned blockchains are more secure than open networks, CipherTrace’s Jefferies offered an argument suggesting that these platforms aren’t inherently more secure: 

“No, they are simply attacked less because they do not move money and are not widely deployed. If anything, they could be more susceptible to hacks and security breaches because by nature of being permissioned, private blockchains are more centralized.”

Tramèr’s take was similar to that of Jefferies about how permissioned blockchains would contrast the security of open blockchains:

“The threat model is certainly different. Yet, some issues, such as smart-contract bugs, key management, etc., would also be a problem in a permissioned or private system.” 

While companies may turn to permissioned blockchains to operate closed-off ledger systems and other financial tasks, at the other end of the spectrum, there are privacy coins that aim to offer complete anonymity to users. Considering Tramèr’s research into perceived privacy and security offered by privacy coins, he insisted that assessing the actual degree of privacy and anonymity offered is not a clear-cut conversation:

“On the one hand, Zcash and Monero use some fairly advanced and very recent developments in cryptography to offer, in principle, high degrees of privacy and anonymity for transactions. On the other hand, cryptography is only one part of a large distributed system implemented by these projects. And measuring privacy, or the lack thereof, at a systems level is very hard. There can be subtle implementation bugs and a variety of usage patterns or side-channel leaks that might reveal much more than the cryptography intends.”

A balancing act

A key takeaway is that security concerns in the blockchain and cryptocurrency space transcend individual systems. One cannot label a single platform or cryptocurrency as insecure due to the fact that there are numerous systems that plug into one another. Tramèr offered a comparison between traditional financial systems and the emergence of blockchain-based cryptocurrencies where no system is “unhackable” and that security concerns also come down to usability issues:

“You shouldn’t have to be an expert to use these cryptocurrencies in the most secure way possible. At the same time, striving for an ‘unhackable’ system is not necessarily the right goal. If you look at the banking system for instance, things are clearly not ‘unhackable.’ People get their credit cards and account logins stolen all the time; banks get hacked; there’s a lot of fraud; and most of this gets handled by the legal framework and insurance. A similar framework for seamlessly and gracefully handling security breaches and losses in the cryptocurrency space doesn’t exist yet.”

In the decade following Bitcoin’s creation and the emergence of numerous altcoins, blockchain platforms, cryptocurrency exchanges and a multitude of other projects have sprung up. This inevitably included teething problems and hacks; fraud and security breaches were rife, particularly among cryptocurrency exchanges. 

Meanwhile, technologists and developers have begun leveraging blockchain technology and cryptography to build secure and robust systems. The exploration of the capabilities continues today, and Jefferies believes that the technology will continue to drive the development of more secure systems across a wide range of industries:

“Yes, there has been a lot of experimentation looking for use cases where blockchain provides benefits beyond traditional technology. [...] We are seeing companies and countries pursuing digital currencies because of the enhanced efficiency and control enabled by digitalization. In the next 10 years, every major economy will have their own Central Bank Digital Currency.”

CZ Calls Africa an ‘Untapped Market’ With Unique Challenges for Crypto

Binance founder CZ sees the African continent as an untapped environment for exchanges to drive cryptocurrency adoption.

Binance founder and CEO Changpeng Zhao, otherwise known as CZ, believes that the African continent holds some unique opportunities for cryptocurrency adoption and development. The Binance leader provided a number of interesting insights during an exclusive “ask me anything” session hosted on Zoom for key members of the African cryptocurrency community, which Cointelegraph participated in.

Binance, which has established itself as the world’s largest cryptocurrency exchange by trade volume, has slowly been opening up satellite trading platforms in a number of African countries. Uganda was the first country to welcome Binance to the continent in 2018.

Binance has since launched trading support in countries such as Nigeria and most recently South Africa, which included the provision of trading pairs and fiat deposits for users using South African rands. The company’s foray into the African continent began in earnest in 2018, as CZ explained during the AMA.

“Even from the first day when Binance launched, we had users from Africa, and they were actually relatively active. So, we’ve always known that Africa is an important market. And so, I think it was early 2018 that I visited Uganda, Togo, Nigeria at the same time — and also Ethiopia. So, I had a little tour around Africa just to learn a little bit more about the market, and soon after that we opened Binance Uganda.”

The past two years have seen Binance branch out into a number of African countries, while its charity arms and incubation services have supported start-ups and made donations to the needy. CZ believes that the continent will become another vital cog in the company’s ever-growing base.

“We view the entire African market as a really key market, and this year we were very lucky to be able to find a good banking partner in South Africa, and we are able to now accept banking deposits directly through bank accounts. [...] We will soon be able to launch credit card buying as well. South Africa, and Africa as a whole, is a really important market for us.”

Africa is untapped, but not without challenges

As previously covered during the 2020 Blockchain Africa conference hosted in Johannesburg earlier this year, the continent is ripe for technological innovations that could provide solutions to the huge number of unbanked people. Cointelegraph posed its own question to CZ during the Zoom session, asking if the Binance CEO sees Africa as a relatively untapped market for cryptocurrency exchanges.

Despite the fact that South Africa has a number of local cryptocurrency exchanges that are operating successfully, CZ believes that the rest of the continent could benefit from cryptocurrency exchanges:

“Yes, absolutely. I think that in South Africa there’s a few crypto exchanges — they’re doing quite well. But I believe they are still relatively small. I’m not sure how profitable they are or how sustainable they are. In other parts of Africa, I think the coverage is very weak, is very poor. I don’t think it’s very easy to buy cryptocurrencies in Africa right now overall, so we want to help improve that situation.”

Despite the fact that Binance is rolling out peer-to-peer platforms and its own centralized exchange platforms in certain countries, there is still a lot of room for growth. CZ pointed to the fact that the provision of trading pairs in native fiat currencies is gaining traction in countries such as Nigeria where daily trading volumes have surpassed $1 million per day on Binance.com.

Nevertheless, the sheer number of Africans that are unbanked remains a major barrier to entry, as does basic Know Your Customer processes being carried out due to varying socioeconomic difficulties facing many Africans:

“It is a very much untapped market. There’s a different set of challenges there. I think basically, that’s the reason for it being untapped. Working with banks there is a little bit more difficult. The banking API interfaces are slightly older or nonexistent, and the number of people having bank accounts are quite low. So, even if you have a bank account support, the overall population you can tap into [is] still in the low double digits.”

CZ went on to add that even the most basic things like verifying users have proven to be challenging in some cases: “Many people in Africa does not have Western-style addresses. [...] For exchanges that tap into this market, they have to address all of those issues. So, we’re trying to overcome all of those issues.” 

Fiat on-ramping is a key driver of adoption

Another key takeaway from the AMA with CZ was the importance of fiat deposits bringing new cryptocurrency users into the ecosystem. This could become even more important as the world tries to grapple with the effects of the ongoing coronavirus pandemic.

As the founder of Binance explained, the world will have to adapt to new ways of working post- COVID-19, and that could have a profoundly positive effect on the adoption and use of cryptocurrencies: 

“I think in the post-COVID-19 world, things will be more digital. They will be more online, more virtual. [...] Right now, everyone’s staying home. People are buying things online. You can buy them using fiat currencies, or you can buy them across the world using cryptocurrencies. So, I think the future world, post-COVID-19, is a world that — I think it’s gonna be really great for cryptocurrencies.”

CZ pointed to a number of secondary and tertiary effects of the ongoing pandemic. A major consideration has been the need for fiscal stimulus from a number of central banks, in the form of newly minted fiat currency.

At the same time, Bitcoin has just carried out its third-ever halving event, which saw the block reward from mining halved from 12.5 BTC to 6.25 BTC. CZ believes that both situations will have a positive effect on the cryptocurrency ecosystem as a whole: 

“There is a lot of fiat money being printed, while we’ve just gone through the Bitcoin halving. So, the new supply of Bitcoin is actually very limited, and the fiat money is being printed in record quantities now. So, I think the cost of everything will increase very soon. We will see hyperinflation. All of those things are actually really good for cryptocurrencies and for the overall blockchain business.”

That is where providing a proverbial on-ramp for non-crypto users will become a crucial cog in driving the adoption and proliferation of cryptocurrency use in Africa and around the world. The Binance founder wants to create the pathway for that to happen:

“I believe that creating, providing liquidity is [...] gonna be a key role, a key feature that people require. [...] Imagine a world with thousands or tens of thousands of cryptocurrencies you will have to exchange when you cross from one currency to another. So, I think crypto exchanges will play an increasingly important role in that new world. [...] Payments, other things could come later, but right now [...] our focus is really just building the bridges so people can enter the crypto space. So, those are the fiat gateways that we’re working really hard to build.”

Top Experts Make Bitcoin Price Predictions as BTC Halving Approaches

Sentiment seems to be leaning to a big upside for Bitcoin following the looming block reward halving.

Hype is steadily building across the wider cryptocurrency community as the looming Bitcoin mining reward halving draws closer. 

As the world grapples with the heavy economic downturn spurred on by the ongoing global coronavirus pandemic, the value of Bitcoin has been at odds with conventional stock markets. A driving force behind this trend is the halving, which is expected to take place on May 12.

The halving event is highly anticipated, as the Bitcoin reward for validating one block will be reduced by half. This is a core deflationary function designed by Bitcoin creator Satoshi Nakamoto. Since the preeminent cryptocurrency’s inception in 2009, there have been two halving events. The reward halving occurs after every 210,000 blocks are mined, which takes around four years to happen. Both previous halving events have spiked considerable price rallies, the first of which brought the BTC price from $11 to $1,000 in 2012 within a year. In the year that preceded the second halving, the price of Bitcoin increased steadily.

The price movement of Bitcoin has been under the microscope of industry experts, traders and enthusiasts alike and there are ranging predictions around the possible movements over the next few weeks and months.

Bullish, bearish and everything in between

American investor Anthony “Pomp” Pompliano has been addressing the upcoming halving in a number of recent letters to subscribers. The one from April 29 provided a bullish stance toward the halving and the potential growth in Bitcoin’s value after the event: 

“This [halving] will see a programmatic decrease in the incoming daily supply of Bitcoin from 1,800 per day to only 900 Bitcoin per day. That supply shock has historically led to a material price increase over the following 18–24 months.”

A major consideration for Pompliano is the fiscal stimulus being pumped into the American economy by the Federal Reserve. Categorizing Bitcoin as an inflation hedge asset, the American investor seemed confident that the event would be a bullish one for BTC:

“I believe that the Bitcoin halving being executed at the same time that the Federal Reserve (and other central banks around the world) is injecting trillions into the financial system will serve as rocket fuel for Bitcoin.”

Pantera Capital Founder and CEO Dan Morehead provided an equally bullish prediction in a letter to investors at the end of April that included a lofty price target in the 12 months after the upcoming halving: “If history were to repeat itself, Bitcoin would peak in August 2021 — at $533,431.” He added, “Just sayin’ that there’s more than a 50-50 chance Bitcoin goes up — and goes up big.”

Cryptocurrency investment analysis firm CoinShares also offered a number of outlooks on the halving in their most recent report authored by head of research Christopher Bendiksen. The report put forward five different scenarios that could take place during and after the Bitcoin reward halving and provided a gauge on the likelihood of each scenario. A Bitcoin mining chain death spiral is extremely unlikely to occur, according to the report, while the chances of no real effect on BTC’s value also seems improbable.

Bendiksen suggests that two of the more negative scenarios are likely. Firstly, traders may be inclined to buy and sell on the hype and sentiment of the halving event; secondly, miners may be pressured into selling Bitcoin holdings, which will drive the price of the cryptocurrency down.

The report offers a prediction of its own that suggests a positive impact on supply, since smaller mining operations may not be able to upgrade their equipment to the latest hardware. This could reduce the selling pressure on miners in order to cover costs due to the reduction of supply from the halving as well as the potential loss of miners due to profitability concerns:

“The pairing of a 50% reduction in available new supply with a reduction in the proportion of ongoing supply offered for sale in the market might drastically reduce the persistent selling pressure caused by miners. These dynamics, in combination with the macroeconomic tailwinds presented by global governments, and the existing and growing inflows into passive bitcoin investment products we’re currently observing, could cause a perfect storm for the bitcoin price over the mid- to long-term.”

Decred co-founder and current project lead Jake Yocom-Piatt added some fuel to the discussion in a correspondence with Cointelegraph. His main point was that miners would be effectively forced to drive up the selling price of Bitcoin following the halving because the price of mining remains unchanged. What was described as a “supply shock” by Yocom-Piatt could potentially cause a huge spike in the value of Bitcoin:

“In the short term, I expect the price to roughly double, but longer term predictions are difficult to make in the context of the boom-bust pattern of cryptocurrency markets. The stock-to-flow ratio is increasing substantially as a result of the halving, so that is good for the longer term price of Bitcoin.”

While there seems to be a bias toward positive price action predictions coming from industry experts and the wider cryptocurrency community, there have been some naysayers predicting a negative outcome.

American investor, politician and economist Peter Schiff has long been renowned as a big proponent for gold, and he delivered a very bearish outlook on Twitter this week. Schiff suggested that the majority of crypto traders hoping for a big upside may be disappointed: 

“A consensus trade is crowded and usually doesn’t pan out as the crowd expects. I can’t think of a more consensus trade in #Bitcoin than being long going into the halving, an event that is universally believed to be extremely bullish.”

While the various predictions have offered a number of possible outcomes, there seems to be an air of the unknown going into the halving. Predictions may be leaning toward a bullish outcome and upside for Bitcoin but many seem to be waiting with bated breath to see what will happen on May 12.

Eco-Friendly Crypto Mining Is the Future as Green Solutions Gain Steam

Cryptocurrency mining operations could move to alternative energy solutions to maintain and boost profitability in the next five years.

Over the last decade, cryptocurrency mining has been given a bad rap for the sheer amount of electricity required to power the industry. Back in 2017, it was pointed out that the collective power consumption of the Bitcoin (BTC) mining network in particular eclipsed the power consumption of some countries around the world. This was echoed in another 2019 study that suggested Bitcoin mining produces more carbon pollution than some countries.

Toward the latter end of 2019, a couple of studies showed that the Bitcoin network was using less energy, despite increasing hash rates. This also included data that estimated that around 75% of Bitcoin mining was powered by renewable energy sources.

It is plain to see that the debate around the inherent costs of Bitcoin mining and the impact it has on the environment will continue unabated. That fact has not been lost on a variety of industry players that are actively seeking alternatives to not only make mining more profitable but also less costly, both economically and environmentally.

Earlier this month, Cointelegraph reported on a unique situation in which an oil company was converting excess gas being produced into electricity to power crypto mining rigs. The situation was necessitated by the sheer costs of converting or piping the gas to be sold on the open market. It was a unique example of how industries are having to adapt to specific problems and how cryptocurrency mining has provided an alternative way to not only make use of excess energy but make a profit from doing so.

Oil-powered mining

Conventional oil drilling and production has long been a proverbial gold mine that has played a massive role in powering industry and trade around the world. One endeavor has found Bitcoin mining as a more profitable way to make use of the excess gas from oil mining, as opposed to converting the gas to liquid form and selling it on conventional markets.

Podcaster Marty Bent, who revealed the use case, went as far as envisioning oil and gas companies dominating the mining space in the future due to the abundance of excess gas from oil fields. By setting up mining operations in containers at the fields, there is no need to pipe or transport excess gas. The operations simply turn the surplus gas or oil into electricity to power the mining rigs.

Cointelegraph spoke to Stephen Barbour, the president of Upstream Data, a company that builds and supplies the necessary equipment for oil and gas mining companies to make use of excess gas to mine cryptocurrencies. Having set up shop in 2017, Barbour said that there has since been a substantial spike in interest from various companies: “We started marketing in 2017 and had a difficult time getting taken seriously, now we are getting cold calls from the very same people that turned us away the first time.”

Barbour also agreed with Bent's sentiments that oil and gas companies would gradually make up a bigger portion of the overall cryptocurrency mining ecosystem. A major driving force is the use of wasted energy sources that are abundant in the sector:

“I've been saying for years that the oil and gas industry will dominate the Bitcoin network hashrate. Hydroelectric dams and utilities are built to serve residential and commercial businesses, not Bitcoin miners. Mining always seeks the most wasted energy sources, there is no greater energy waste than in the oil and gas industry.”

Barbour also predicted that oil and gas producers that do not consider turning to Bitcoin mining will be at a disadvantage to competitors that do. The cost of building infrastructure to pipe or convert surplus gas simply does not have the same return on investment, while “shareholders tend to like when they increase reserves,” as he went on to explain further: 

“Mining eliminates the need for pipelines and wasted gas in many applications, there are no sunk costs unlike the pipe that is never recovered from the dirt. Producers not only earn money mining Bitcoin, they get to save money from being wasted paying for gas disposal or uneconomic pipeline projects. If their well production declines they can simply redeploy their data centers elsewhere. It is a no brainer.”

Another consideration is the reduction in carbon emissions, according to Barbour. He believes that Bitcoin mining in particular gets a bad rap for its perceived environmental impact, and he highlighted the importance of making use of wasted energy, saying that a small V-8 50-kilowatt hash generator “reduces carbon emissions by up to 10,000 tonnes / year when deployed on vented gas sources.”

Mining powered by solar energy

Renewable and green energy sources are another major consideration going forward and have been a focal point in Bitcoin mining circles. The simple question is whether it is more profitable for electricity produced from solar farms to be sold to power grids or used to power mining.

Cointelegraph reached out to Christian Ander, the founder of the Stockholm-based exchange BTCX, who came to this realization in 2018. As Ander explains, cryptocurrency mining has become a viable revenue stream for green energy producers as an alternative to connecting or contributing to mainstream power grids. Ander went on to explain that there are multiple benefits of generating and using solar power for mining operations and it would become the norm in the future:

“I installed my panels during 2018. The profits had been two fold. Using energy from my panels I save 75% of the energy cost. But also when the energy price is low which it has been during 2020, currently I get 1,300% more by mining Bitcoin than selling the energy to the grid. I believe energy producers will wake up to this fact.”

There is, of course, a certain barrier to entry, considering the initial cost of buying solar panels and mining equipment. However, the amount of money saved by buying electricity from the grid is the mitigating factor: “You basically prepay for 20–30 years of energy production up front. Of course it's about 75% cheaper than buying it from the grid.” For Ander, cost reduction is the primary reason for turning to solar power for his mining endeavors. However, there is added sentiment given the fact that a green energy solution is being used.

Mining powered by hydroelectric energy

Hydroelectric power has been a big mover in the world of Bitcoin mining, especially in China and Canada, which have both been able to offer preferable electricity rates to industries nearby certain hydroelectric dams. According to CoinShares’s most recent report on the global mining ecosystem, which was released at the end of 2019, 73% of the world’s Bitcoin mining operations run off renewable energy systems. Furthermore, the report estimates that miners are still mainly based in regions using cheap hydroelectric power.

The report directly contradicts various media articles over the years regarding the effects that cryptocurrency mining has on the environment and suggests that the majority of mining operators are utilizing green energy. Furthermore, the use of some of these resources from the mining sector directly provides a solution to surplus or wasted energy that is created by hydroelectric power plants.

Christopher Bendiksen, the head of research at CoinShares, spoke to Cointelegraph about the overarching trends in the cryptocurrency mining space. First and foremost, Bendiksen highlights the ruthless nature of the ecosystem and the focus on profits over moral considerations around green energy sources: “Miners need to first and foremost survive in a highly competitive industry so they search out the cheapest energy. It just so happens that the cheapest energy on the planet is renewables.” Hydroelectric energy producers and gas and oil companies seem to be the most favorable energy sources for the mining space. It is a point that is backed up by Bendiksen as well:

“Hydro power is and will probably remain the most cost effective energy source for Bitcoin mining for the foreseeable future. Another potentially great source is waste natural gas. I do anticipate a move towards fossil fuels, specifically natural gas (we’re also observing increased coal use in Kazakhstan), as oil and gas producers realise it is more economical to mine Bitcoin with their waste gas instead of flaring it, or worse, venting it into the atmosphere, as are the current practices.”

Water and oil: The lifeblood of crypto mining

A key takeaway from conversations with various experts and industry participants seems to point toward hydroelectric and oil producers as major electricity sources for cryptocurrency mining operations. The latter is a sector that Bendiksen believes could well become far more prevalent and profitable:

“The economical and environmental savings will just be too good to ignore. I’m maybe not quite as bullish on natural gas mining [...], but I do think it will be a big deal and certainly bigger than now.”

Mining operations powered by solar panels are relatively small compared to the various energy sources used by the mining ecosystem. Bendiksen described solar-powered operations as a small percentage accounting for a few dozen megawatts and said that these operations were rare. Hydroelectric energy producers seem to be the proverbial lifeblood of the cryptocurrency mining industry. Looking ahead to the next five years, Bendiksen predicted that this would remain the status quo:

“Yes this is still the case and I would be very surprised if it didn’t remain so for the next five years. The only potential source I can imagine overtaking hydro is natural gas, but it has a very, very long way to go considering how dominant hydro power is in the current energy mix.”

Alejandro De La Torre, the vice president of the mining pool Poolin, believes that cheaper electricity prices produced by hydroelectric power plants will continue to be an attractive option for miners. As a result, the entire industry could become more efficient:

“The industry will be much more professional too. There will be new entrants after the halving because of the new miners, new financing options, better operating systems for mining rigs and the clear 4 year Bitcoin reward scheme. The pursuit of cheaper electricity will undoubtedly continue and if the trend is to continue, most of this cheap power will come from green sources.”

Nevertheless, profitability will always be a major consideration for cryptocurrency miners. With this in mind, De La Torre believes a push from the international community for more green energy production could ultimately dictate which energy sources are favored by mining operations:

“As long as the cheaper electricity to be found is from green sources than most miners will choose it. The global trend of less fossil fuels will also help the mining industry as governments will push for more green power plants at even better prices. Ultimately, it is an effort from us all, if we push the global community to less fossil fuels than everyone wins.”

Crypto Community Is Keeping Itself Entertained While on Coronavirus Lockdown

Cryptocurrency enthusiasts have found plenty of entertainment online as many countries enforce lockdowns to curb the spread of COVID-19.

Nationwide lockdowns have become commonplace in a number of countries across the world as the global community tries to curb the spread of the novel coronavirus. For weeks on end, people have had to hunker down in their homes and practice social distancing in order to “flatten the curve” of COVID-19’s spread. Setting aside the dire consequences this has had on the global economy, the situation has forced people to come up with a wide variety of ways to entertain themselves.

While this lockdown may have brought a new meaning to “Netflix and chill,” even watching TV series and movies can become a bit monotonous. In light of this, the cryptocurrency community has come up with some ingenious and unique ways to fight the boredom in lockdown with a number of activities on social media and online.

Gamers double-down on free time

With so many confined to their homes for varying lengths of time, there has been a notable surge in the amount of online gamers, as Cointelegraph reported earlier this month.

Massively multiplayer online role-playing game World of Warcraft went as far as offering a 100% experience boost so that players could quickly level characters during the lockdown. But the mainstream gaming industry wasn’t the only sector to benefit from the hordes of people forced online.

A number of blockchain-based games have also recorded rising numbers of users due to the ongoing worldwide pandemic. Games like War Riders and Cryptovoxels reported marked increases in new users. The influx of gamers has even put strain on Microsoft’s Azure cloud platform, which coincidentally is the infrastructure that hosts its blockchain and Xbox Live. 

Conventional gaming platforms are not the only way in which cryptocurrency enthusiasts have found enjoyment. CryptoLiveLeak began an entertaining concept using polls to vote through 32 different cryptocurrencies in a knockout competition. Major cryptocurrencies like Bitcoin and Ethereum went up against a plethora of altcoins.

The contenders in the first round were separated into four regions categorized as the Bitcoin, Ethereum, XRP and Tether regions. In order for a cryptocurrency token to progress through to the next knockout round, it had to win more votes than its opposing token every round in a poll taken by the Twitter community.

McAfee requests haunting photos

American entrepreneur and crypto advocate John McAfee initiated a challenge on Twitter by offering $500 worth of DAI for the best photos of vacant areas across the world. Challenging those who were able to move about in lockdown countries, McAfee’s tweet garnered over 1400 likes and received over 800 photos. McAfee then compiled a video of all the best photos that were submitted a week later.

Russian crypto interest picks up

Russia has now enforced a complete lockdown of Moscow and several other areas, and the increased amount of people practicing social distancing and staying at home has caused an increase in cryptocurrency trading interest. 

A number of reports have noted a surge in internet traffic going directly to cryptocurrency exchanges in March. Russians have been given an extended paid, non-working period due to the ongoing coronavirus pandemic. It seems as though some are taking the opportunity and some of that capital to trade cryptocurrencies. 

Meanwhile, March saw the largest-ever trade volume of Bitcoin spot markets as the preeminent cryptocurrency hit a low of $3,800. On March 13, daily trade volumes topped $75 billion. As data suggests, the huge surge in trading volume may have been driven by traders looking to convert crypto holdings to fiat currencies in response to the escalating coronavirus situation.

Scammers on the prowl 

While crypto users look to entertain themselves during these unprecedented times, more nefarious forces are looking to prey on unwitting crypto users. The United States Federal Bureau of Investigation released a warning to the general public to be wary of scams and fraudsters looking to take advantage of the ongoing pandemic to dupe people out of their money. The FBI has warned the public to beware of blackmail attempts, fake COVID-19 treatments or safety measures, and investment schemes promising unusually high returns. 

Meanwhile, Chainalysis released a report this month on the emergence of scams related to the pandemic. These included phishing and threatening emails, links to download malicious applications as well as faked emails from charities calling for donations in crypto.

While the report also indicated a 30% decline in payments made to known scam wallets in March, it highlighted the fact that scam artists are trying to capitalize on the ongoing situation around the world.

Meanwhile, denial-of-service attacks targeting cryptocurrency exchanges have surged in Russia. Attacks have grown by more than 400% from February to March 2020, according to a report from Qrator Labs.

Chainalysis also revealed that some darknet users have been trying to sell blood infected with COVID-19. A particular user had reportedly obtained a blood sample from an infected family member and injected bats with it. It is unclear whether this is a direct scam to dupe potential buyers, who need to pay the seller in Bitcoin. Nevertheless, it is an example of the depravity of some individuals that are looking to capitalize on the ongoing crisis.

Coronavirus-Tracking Apps Take Different Approaches in Keeping People Safe

A South African team is building a blockchain-powered COVID-19 status verification app, using a different approach to Russian, Chinese solutions.

A team of academics at the University of Cape Town in South Africa is developing a blockchain-powered application that will allow users to verify their own COVID-19 status. The platform, named Covi-ID, is still under development but aims to address a number of pressing concerns around the global coronavirus pandemic. It’s being developed by a team of academics and software developers in Cape Town and is aiming to launch on April 21.

The application intends to improve contact tracing of infected patients, while users of the platform will be able to provide a verified COVID-19 status. Additionally, the app will reward people for responsible behavior, like remaining at home during lockdown periods. Covi-ID is being built on permissioned blockchain platform Sovrin, which is a self-sovereign identity network. The primary goal is to give users ownership over their data while providing accurate information relating to COVID-19 infection hotspots to ecosystem participants.

This South African project is not the first to be exploring the use of a mobile application to improve contact tracing. Countries like China and Singapore, which were initially hit hard by the COVID-19 pandemic, rolled out their own tracing platforms while a number of European countries have also been developing interoperable applications as well. The Covi-ID app also differs from these varying projects in its privacy-centered approach that uses SSI and blockchain technology. 

How will it work?

For developers, the first port of call was creating an account that verifies a user’s COVID-19 status. Potential users have two ways of creating a Covi-ID account. The first option is through a custodial wallet provided by one of the partnering commercial companies, which includes local South African banks, and government and health institutions. The second option is a completely self-sovereign identity wallet solution that is being developed by Covi-ID. Both options promise to safeguard users’ data. The latter option will store all of the users’ data on their phone, which means that personal information never physically leaves the device.

The nature of life in South Africa is also important to consider, as a large portion of the population may not have access to a smartphone. In this case, potential users can still engage with the platform by creating one of the custodial accounts with one of Covi-ID’s commercial partners.

The process entails taking a photo to prove the user’s identity, as well as providing a full name and telephone number — which can be a friend’s or relative’s in case users do not have their own number. Each user will be issued a QR code that can be printed, or potentially issued on a card similar to a bank card. This QR code can then be scanned by authorities to prove a user’s COVID-19 status.

Users’ information is stored by these commercial partners in custodial wallets, similar to how a cryptocurrency exchange stores a user’s currency holdings. Whenever their QR code is scanned, for instance, when they enter a supermarket, an event is logged in their wallet. Users can then be informed if they potentially come into contact with a COVID-19-positive user at that supermarket on that day. Users are required to provide phone numbers so that they can be easily reached in this case.

If users become symptomatic, they can go to a testing center or go see a doctor. The practitioner would scan their QR code and verify their identity with the photo that was given to the custodial wallet provider. Once the test results are confirmed, they would be logged into the users’ Covi-ID account. Once a user has recovered from COVID-19, or has received a vaccination — when they’re finally made available — they will be given a green status in the app and will pose no further health threat to the public.

All of this allows the second implementation of the Covi-ID, which is verification. This will most likely become essential as countries try to curb the spread of potential viral outbreaks in the future. If users try to enter any space that has implemented health screening, they will present their QR code, either through the app on their smartphone or a hard copy. Users then consent to give read-only access to their COVID-19 status. 

A green status would indicate users have either recovered from the virus or have received a vaccination in the future. A yellow status would indicate users are COVID-19 negative but have never been infected nor been vaccinated — this would necessitate certain screening practices. A red status would indicate that a user currently has COVID-19 and would need to immediately be isolated from the public. 

Blockchain technology to ensure privacy comes first

The major focus of the project is to ensure that users’ data remains protected while providing important information that will improve contact tracing and create a tool that will allow society to gradually return to some sense of normality. The developers of the application make use of users’ geolocation data, but instead of this valuable data being stored by a centralized server or institution, the users maintain possession of their actual geolocation data.

This is a fundamentally different way, in which users’ data would usually flow. The app will send out possible ‘infection hotspots’ to a user’s wallet, which will then check if the user stored location history overlaps. In this way, Covi-ID is able to carry out similar functions to a track-and-trace system that stores data in a central database. Co-Pierre Georg, an associate professor at the University of Cape Town, is a leading member of the project. Georg told Cointelegraph that the project is being developed on the open-source, decentralized SSI platform Sovrin:

“We are building using self-sovereign identity and, specifically, we are building on the Sovrin ledger at the moment. But our app will eventually be platform-agnostic, and we are complying with all standards currently being developed by the SSI community to ensure this interoperability.” 

Georg said that the team wants to build an open-source system that will eventually be an enabler of “disruptive innovation,” also adding: “So, we will have an open-source version of the app and eventually also for the custodial wallets, which are currently being built as white label solutions for partner organizations like corporates, non-profits or government entities.”

Georg said that the end goal is for a large portion of the South African population to use an SSI application. However, due to the ambitious launch date, most users will initially be using a custodial wallet. He described it as a hybrid solution that will gradually move toward a completely decentralized system. Georg added that custodial wallets can be trusted:

“First, we have strict privacy regulation in place in South Africa already. And as we are working with well established corporate partners, the cost of not complying would be significant. Second, our open system incentivizes competition between the custodial wallets. As privacy is the most sensitive aspect of the system, we believe that we will see a race to the top where the best custodial wallet will eventually win the most users.”

Georg also believes that using QR codes will allow for widespread use because they can be scanned by phone cameras, which are ubiquitous in African countries. Furthermore, the project will provide an open-source application for anyone who needs to verify a user’s COVID-19 status:

“Most of the verifiers will be taxi operators or security guards, and almost all of them do have smartphones as well. What sets us apart, though, is that we do not require every user to have a smartphone as well. This makes the system more inclusive than existing and fully decentralized solutions.”

European applications to be rolled out by Mid-April

While the Covi-ID app hopes to provide a solution that is primarily suited for a South African setting, various European countries are developing track-and-trace applications that intend to share monitoring data. The initiative, dubbed Pan-European Privacy Preserving Proximity Tracing, was proposed in an effort to collate data and contract tracing through a number of applications that are being rolled out across the continent. This would enable various applications that are being developed to interact with each other to improve the efficacy of contact tracing — a crucial part in curbing the spread of COVID-19. 

There are, of course, pressing privacy concerns around such projects, however, it has also been reported that the PEPP-PT program will offer both centralized and decentralized options to its users. The application will use Bluetooth technology anonymously without storing the geolocation data of users.

Many of the applications that are being developed will use Bluetooth technology to track the proximity of users to one another in relation to their COVID-19 status. Users who have come into contact with a person who is later confirmed to be infected, which is identified by the Bluetooth proximity, would then be notified by their respective applications.

Additionally, Russian authorities have announced that they will launch their own tracking application for patients who test positive for COVID-19 in Moscow at the beginning of April. The city has been in an indefinite lockdown since March 30. The monitoring application will be issued to people who have tested positive for the disease and have been ordered to self-isolate at home. It’s reported that the application will request access to users’ calls, location and camera, as well as network information — in an effort to monitor and ensure that sick patients are not leaving their homes while they’re contagious.

China also released an application in February that allows users to check whether they’ve come into contact with a person who is potentially infected with COVID-19. The New York Times reported that the application shares users’ location information to a centralized server whenever their barcodes are scanned at a checkpoint either in public transport hubs or other access-point controlled areas.

Singapore is another country that has released and made use of a contact-tracing application that uses Bluetooth technology. The TraceTogether app monitors a user’s proximity to other people using Bluetooth technology and uses timestamps to provide a history of contact. If users contract COVID-19, they can allow the app to identify people who they’ve come into contact with. Data is stored locally on users’ phones and is deleted after 21 days. The platform states that users’ locations and contacts are not tracked at any stage.

Meanwhile, another group of European researchers has been working on its very own decentralized platform for contact tracing — called Decentralized Privacy-Preserving Proximity Tracing.

The project’s white paper has been published on GitHub and is another Bluetooth-based proximity-tracing application that is primarily focused on privacy-protection. The app intends to provide warnings to users who have come into close contact with an individual suspected of being infected with COVID-19, without giving up any identity or location data.

South African National Blockchain Alliance Holds Online Launch

The South African National Blockchain Alliance has been launched to drive technology development by bringing public and private enterprises together.

The South African National Blockchain Alliance carried out an online livestream launch while the country is in the midst of a 21-day lockdown to curb the spread of the coronavirus pandemic. The organization was due to be launched at the beginning of April in Johannesburg but had to be taken online as South Africa and the world tackles a global health crisis.

The launch happened during a livestream on YouTube on April 3, which included a panel of speakers elaborating on how SANBA will help nurture blockchain-focused startups and companies that are developing capabilities using the technology.

Bringing parties together

SANBA has been set up by the Council for Scientific and Industrial Research and its subsidiary, the Office for Digital Advantage. These bodies fall under the jurisdiction of the Department of Science and Innovation.

Akhona Damane heads up the project and said that SANBA intends to be the central cog in a network of partnerships between South Africa’s government, industry-leading companies, startups and civil society. An important consideration for SANBA is the development of blockchain-based systems and solutions coming from inside South Africa, as Damane told Cointelegraph:

“There is a lot of venture capital out there, we need to provide support to startups in the country. There are new job opportunities and a chance for new economic participation. Satoshi’s paper was looking at democratizing economies. In South Africa, that has worked, there are even people in deep rural areas that buy and trade cryptocurrency using smartphones.”

Another major focus will be driving the development of skills needed to explore and create blockchain solutions. An integral part of this will be educating civil society on the various use cases and further potential of the technology to improve a wide variety of industries.

The importance of supporting academia

Education and developing skills will form a major part of SANBA’s focus over the next few years. The launch event highlighted the work being done by the University of Cape Town to help incubate talent in the space. Co-Pierre Georg, an associate professor at UCT’s School of Economics, said that the university is the first in Africa to offer a master’s degree program in fintech, which has been modeled on the programs of universities in the United States, such as the Massachusetts Institute of Technology and the University of California, Berkley.

Georg said that a major hurdle in South Africa is having the capacity to develop talent in the space. The professor also said there had been 400 applicants for the 15 spots available for the program:

“We need to create people who can code. Quite simply, they need to know some finance and organizational skills, but the core skill lacking is coding ability. There is not a deep enough skill set in the country.”

Another problem is the allure of opportunities offshore, as Georg noted that as soon as the program educates students with those highly sought-after skill sets, they begin to receive offers from companies, and the university cannot entice them to stay for a Ph.D.:

“The second step is creating a pipeline that develops skills, which in turn leads to those people creating companies. We need to build companies that can scale globally but are based in South Africa.”

Tertiary education institutions will also be receiving support from SANBA. Damane told Cointelegraph that the Department of Science and Innovation is exploring an exchange program for students taking blockchain-focused courses:

“At the academic front, SANBA is committed to developing a blockchain curriculum which encourages the uptake of courses at undergraduate level. We also envision the facilitation of funding of a few postgraduate research students in collaboration with partners. This will be linked to the commitment with the DSI country-partners such as Swiss Embassy in Pretoria, which has activated the Switzerland based institutions such as the University of Basel to participate in the joint international students' exchange program later in 2020.”

South Africa is catching up

SANBA has made it clear that it wants to be the middleman that connects the various industry players that will drive blockchain development and use in the country. At the same time, it also defines its role as creating a “pre-competitive space” for research and development. Monica Singer, ConsenSys’s lead for South Africa, spoke to Cointelegraph following the online launch.

Having joined ConsenSys in 2017, Singer says she has faced an uphill battle trying to get industry players to warm up to blockchain technology. She said that she had been advocating the use of blockchain systems to heads of various enterprises over the past three years, but was met with disdain in various instances when she used the example of Bitcoin as a starting point to explain the tenets of blockchain technology.

Moving away from any mention of cryptocurrencies, Singer still struggled to get big businesses to open up to the potential benefits of decentralized systems or smart contracts, saying it was too much for people to embrace. Now that a government-backed entity is finally spearheading a collaborative organization that will drive the development of the space, Singer is far more optimistic about the road ahead, telling Cointelegraph:

“I have been so worried that South Africa is falling behind in innovation and not embracing this technology, which has so much potential to eliminate corruption and fraud that has plagued our government in the last 10 years. To witness the birth of a national initiative at the government level from the Department of Science and Technology is a historically much-needed move to ensure that we raise the level of awareness among all our people.”

Singer is positive that South African enterprises, educational institutions and startups will get the necessary support to use blockchain-based solutions in order to drive the country forward:

“The narrative can now be changed to explore the potential that this technology has to improve the lives of the citizens in a country and to bring trust and accountability to the recording of transactions of value using the internet of value we are building in Ethereum and other platforms.”

Impact across industries

As a collaborative initiative, SANBA is made up of a broad range of businesses, startups and institutions. Daniel Visser, a research and development strategy manager for the Council for Scientific and Industrial Research, also weighed in during the online launch on the potential effects that SANBA could have in the country.

Visser explained that the CSIR is an affiliate of the World Economic Forum’s network for the Fourth Industrial Revolution. As a result, the CSIR is constantly looking at issues with policies around emerging technology and how those can be improved to drive adoption. Visser added:

“From a blockchain perspective, there are so many areas to consider. We went through a number of different areas that could benefit. Supply chain is a big factor, green chain, cold chain and the likes. What are the things that need to be in place to adopt the tech?”

Visser also highlighted the fact that South Africa has large areas that don’t have access to traditional financial means, which opens the door for micro-trading and transactional applications. Other major considerations are decentralized-identity solutions, educational certifications and governmental transparency. Visser believes all of these could be greatly improved by blockchain technology.

Meanwhile, Damane opined that SANBA will have the biggest impact in the entrepreneurial space in South Africa. He identifies small enterprises like startups as crucial participants within the blockchain development ecosystem:

“SANBA will become the catalyst — linking startup solutions to government and industry needs, entrepreneurs to VC funding, and so forth. These enterprises have the potential to contribute to economic growth and job creation, which is a major challenge especially among the youth.”

Damane added that SANBA has begun identifying sectors for proofs of concept and use cases that include digital identity solutions, micro-credentials and health care. A wide variety of cross-industry participation should lead to investment:

“This will force the entire ecosystem to leverage the efforts of existing players rather than reinventing the wheel. Hence, we envision public-private partnerships to emerge, with a significant co-investment being made, which will ultimately benefit the startup community.”

A chance to overhaul government systems

While the launch of SANBA signals the beginning of a collaborative effort across industries, the South African government could be a prime candidate for a blockchain-driven overhaul. That is the opinion of Singer, who sees the potential of the technology to improve a number of governmental departments in South Africa.

Singer believes this could be a catalyst in creating more efficient, transparent government departments and addressing wasteful expenditure, which has been a concern in South Africa for many years: “SANBA can take the leadership in guiding the various projects where they are needed the most and to coordinate at a government overall level.” Self-sovereign identity solutions could also help improve the lives of individuals and help the government streamline a variety of essential services for its citizens, according to Singer, who added:

“Once we implement a self-sovereign identity decentralized database of personal records for each citizen, this can be used by various government departments so the passport, the ID, the record of your degrees, your medical information, your title deeds of your property, your driver’s license, your license of your ownership of your vehicle, etc. is all in the data under the control of the citizen.”

Celebrating collaboration

The online launch of SANBA was preceded by a personal message from Cardano founder and CEO Charles Hoskinson. The tech entrepreneur was supposed to headline the Blockchain Africa conference last month but was forced to pull out due to travel restrictions due to the coronavirus. Hoskinson applauded the South African government for doing its part to drive the development of new technology in the country and continent, saying:

“It is so important that people focus on foundational research and development, as well as time, effort and money to really chase the future. I’m glad to see that the appetite and ambition for innovation and building public-private partnerships with entrepreneurs and people in emerging industries has not been lost in these sad times.”

Singer echoed those sentiments, telling Cointelegraph that the foundation of SANBA could have lasting effects in driving the development of technological solutions in South Africa:

“SANBA will make a massive difference as we have not made much progress to date, as a country in studying this technology and exploring its opportunities and determining the art of what is possible. Just by creating a forum where parties can share information and encourage students to learn how to code it will have a huge impact. I also hope that SANBA will guide the various government departments as to what are their key pain points that can be resolved with this technology.”

Big Tech in Blockchain: Comparing IBM, Microsoft, Apple, Google and More

Some of the world’s biggest tech companies have opened their arms to blockchain technology — here’s how they compare.

The world’s largest technology companies have made concerted efforts to investigate and integrate blockchain technologies over the past few years. Partly driven by a massive boom in interest caused by Bitcoin’s stellar bull run in 2017, blockchain technology quickly became the new catchword in tech. A swathe of startups entered the fray during that period as entrepreneurs looked to cash in on the hype in the space.

Bigger companies that weren’t looking into the benefits of the technology faced the risk of being left behind and began to carefully explore solutions to their own business mechanisms. Others had already begun exploring the potential benefits that blockchain could bring to various systems. That included some of the biggest names in the tech space, including IBM, Samsung, Google, Sony and Apple. 

IBM

American tech giant IBM has made waves in the space for filing a multitude of patents that use blockchain technology. The company has been a leader in adoption since 2014, putting it well ahead of most when it comes to developing and using blockchain-based solutions. 

One of IBM’s earliest forays into the technology was exploring the capabilities of blockchain technology to power the Internet of Things. The Address Energy in Parallel Technologies project, or ADEPT, was born in collaboration with Samsung, which allowed domestic appliances to autonomously interact with its environment. 

The project’s use case was proved by a Samsung washer autonomously ordering its own detergents and replacement parts. The ADEPT concept used Telehash for communication, BitTorrent powered its file sharing, and the Ethereum blockchain was used for functions that required more in-depth contract capabilities.

The company’s most defining work came in 2015 with the launch of the IBM Blockchain. The platform is built on the Linux Foundation’s Hyperledger Fabric — which IBM contributed to developing alongside a host of other companies.

The IBM Blockchain is an enterprise blockchain solution aimed at large scale businesses and corporations. The platform allows users to join existing blockchains or even create new platforms suited to their needs. The IBM website estimates that it has over 500 live, working blockchain projects. These projects cover a broad spectrum of industries, including trade finance, supply chains and identity services. 

Notable blockchain projects include supply chain management platform TradeLens, which was developed by shipping giants Maersk together with IBM. The system tracks real-time data of shipping transactions and progress in a permissioned network.

Related: Walmart’s Foray Into Blockchain, How Is the Technology Used?

IBM’s Food Trust Blockchain is another notable platform that has onboarded some major conglomerates over the past two years. The blockchain-based food tracking platform is being used by the likes of Nestle and Unilever, as well as America’s leading retailer, Walmart.

Microsoft

Since its inception back in 1975, Microsoft has been a leader in the IT and technology spheres. It’s operating systems have made it famous, but the company has branched out to provide a wide range of technology goods and services. Blockchain technology has not gone unnoticed by the company either. Although like IBM, it has focused on the development of private enterprise solutions as opposed to open-source, decentralized blockchains.

Microsoft’s Azure cloud computing service is the backbone of its move into the space and allows businesses to build and manage applications to improve a wide variety of internal and external services. A branch of the platform is the Azure Blockchain Service, which allows users to create their own consortium networks and applications using prebuilt networks and software. 

The Azure Blockchain Workbench allows developers to deploy a network, using existing infrastructure that is touted to reduce the amount of development time it would take to create an in-house solution. This includes automatic ledger deployment, network construction and pre-built blockchain commands.

The platform has been employed by a number of companies around the world. American coffee company Starbucks deploys the Azure Blockchain platform to track coffee beans from its source farmers to its many stores around the world. 

Global aviation company GE Aviation also uses the Azure Blockchain service to record and track the details of aviation parts. The process has traditionally been done on paper, which is both time consuming and costly. The likes of Singapore Airlines, the Nasdaq, 3M and Xbox have used the Azure Blockchain platform for various offerings as well.

Samsung

South Korean tech giant Samsung has played an interesting role in the cryptocurrency and blockchain space for a number of reasons. Samsung is a major player in the electronics manufacturing industry in particular, and this has also spilled over into the cryptocurrency sector. The company is among the top producers of smartphones and semiconductors — two products that are actively used by crypto enthusiasts. 

Samsung’s processors became highly sought after during Bitcoin’s bull run in 2017, as users flocked to buy ASIC cryptocurrency miners. From the beginning of 2018, the company began designing and creating ASIC chips specifically designed for mining.

Samsung also integrated cryptocurrency support into its smartphones in 2019 with the launch of the Blockchain Keystore application market. The major application launched was a password wallet for users' private keys. The functionality was rolled out with Samsung Galaxy S10 smartphones and is now supported on six of its devices, including the S10e, S10, S10+, S10 5G, Note10 and Note10+. A number of blockchain-based applications have been made available on the Blockchain Keystore since, and the Galaxy S10 smartphone now supports an even greater number of cryptocurrencies. 

Last but not least, Samsung SDS, the company’s IT arm, has also joined the fray in the enterprise blockchain space. The platform was launched in 2017 and competes with the likes of IBM and Microsoft’s enterprise blockchain solutions. The blockchain platform allows businesses to create and manage their own services for payments, supply chains, identity credentials and smart contracts.

Sony

Japanese IT firm Sony is well known for its electronics, but it’s made some interesting moves utilizing blockchain technology. The company has taken a slightly different approach in its appraisal of the possibilities of the technology and has earmarked areas that would benefit the most — education, music rights and sampling.

In 2017, Sony announced that it was exploring a pilot project with Fujitsu to record and manage educational subject matter, records and grades using the Linux Foundation’s Hyperledger Fabric. The platform allows educational institutions to virtually store and share academic learning records for individuals in a cryptographically secure, distributed blockchain network.

This allows educational institutions or companies to have access to verified, tamper-proof educational records of the respective applicant or student. Conversely, it allows students and academics to have real-time access to their own academic records.

Sony has also identified an interesting use for AI and blockchain technology in the music industry. According to their Soundmain description page, Sony began to make inroads in a particularly challenging space for artificial intelligence around 2013. In the field of sound and music production, differentiating different instruments and sounds in music is incredibly difficult for machines — it is a uniquely human capability.

However, Sony’s developments in AI have led to some breakthroughs in audio separation technology. Its Soundmain platform enables users to separate different sounds into multiple channels from source audio that has already been mixed down to single or double channels.

The software is intended to be used as a remixing and audio rights tool. Artists would be able to record a full set live and use the software to identify and mix the different instruments into individual sound channels afterward. Blockchain technology comes in to address issues around the rights to different music samples, enabling composers or individual musicians to be compensated if their samples are used by other production studios.

Google, Apple maintain distance

Google and Apple are undisputed giants in the IT space, but both companies have kept blockchain technology and anything specifically related to cryptocurrencies at an arm’s length over the years. Both companies have copped criticism from the cryptocurrency community for their tough stance toward decentralized applications that are listed on the Google Play and Apple App stores. In response, the companies said that they act in the interest of safeguarding users from malware.

The harsh stance has seen major exchanges like Coinbase have its cryptocurrency wallet DApp removed from the Apple Store over unresolved issues pertaining to developer guidelines. As recently as the beginning of March 2020, Google Play has even removed the applications of various cryptocurrency news platforms, including Cointelegraph’s app. Google had previously removed a plethora of cryptocurrency mining apps from the Play store.

Nevertheless, Google has provided infrastructure assistance to cryptocurrency software firm Blockchain.com. The company uses Google’s Cloud service to handle its various databases for its Blockchain Wallet and Explorer services. The platform handles an enormous amount of data across various databases and has switched over to Google’s Cloud Spanner to streamline its processes.

Meanwhile, Apple announced the development of the CryptoKit framework in 2019 that was initially met with much fanfare from the cryptocurrency community. As Cointelegraph reported at the time, the hype around the project was somewhat unjustified once the company gave some clarity into the project.

The CryptoKit tool allows developers to carry out a variety of cryptographic operations. This includes the use of public-key cryptography to create and manage digital signatures. The software effectively allows developers to improve authentication and encryption services to improve security.

Blockchain Africa Conference: Education Is Key Crypto Adoption Driver

Blockchain technology has taken center stage in Africa — but where’s the continent at when it comes to cryptocurrency trading?

Cryptocurrencies have seemingly taken a backseat due to a concerted focus on blockchain technology in Africa, but there is still a growing interest and demand for trading on the continent. This was one of the main takeaways from the Blockchain Africa conference held in Johannesburg in the middle of March 2020. 

The Blockchain Africa conference, which is the biggest in the continent, has become heavily focused on the technology underpinning cryptocurrencies like Bitcoin and far less so on the crypto trading space. It is a fact that was admitted by event MC Tanya Knowles, who recently became Binance South Africa’s country manager. 

It is difficult to get an actual gauge of the volume of cryptocurrency trading and use in Africa due to the seemingly small amount of exchanges across the continent. Nevertheless, a handful of South Africa’s biggest local cryptocurrency exchanges were present at the conference, including AltCoinTrader, Valr and Luno, the latter operating around the world.

Binance, one of  the world’s largest exchanges by trade volume, has also launched trading support for South African Rands, making the announcement during the Blockchain Africa conference. Binance currently has trading support in 35 African countries, which suggests that there is a growing demand for cryptocurrency trading platforms across the continent.

Shifting the focus back to Bitcoin

Renowned cryptocurrency trader and analyst Tone Vays was one of the keynote speakers that attended the Blockchain Africa conference in Johannesburg. He was also one of just a handful of people that spoke about cryptocurrency trading and Bitcoin in particular. 

In a conversation with Cointelegraph, Vays speculated that many people are still skeptical about the use of cryptocurrencies, which has resulted in a move away from the subject and a focus on the underlying technology:

“There’s a couple of reasons and I think the main reason is around regulation. Bitcoin still sounds bad, everyone is still scared of Bitcoin and they think that it is only used for illicit purchases and blockchain sounds more appealing to the regulators, government entities and businesses.”

Having spent some time speaking to the local cryptocurrency exchange owners that had setup exhibitions at the conference, Vays admitted that he was pleasantly surprised by the interest shown in trading in South Africa:

“I think you guys are the leaders in Bitcoin and anything crypto in the African continent altogether. It might not be crazy to say that all the Bitcoin and crypto activity in South Africa is probably bigger than all the other African countries combined.”

While the local players are still small-scale, Vays said that Binance’s move into the South African space should be a good thing for crypto traders in the country and the continent:

“That’s actually big — Binance offering a Bitcoin-Rand trading pair. It’s important because the Bitcoin in South Africa is trading at a 6-8 percent premium. So with someone like Binance coming in, they have liquidity and as long as they can handle the KYC situation if they can lower that premium it does create a more efficient market. I’m sure it’s frustrating for people to pay 8 percent higher than the spot price.”

Vays was also fairly critical of the shift in focus from Bitcoin and cryptocurrencies to blockchain. Vays maintains that Bitcoin can be useful to businesses, but said that the creation of knock-off blockchain platforms with native tokens does not necessarily add value. It’s part of the reason why he believes that blockchain conferences might not be commonplace in a few years’ time:

“If you’re working on supply chains, there will be a supply chain conference, if you’re working on healthcare there will be healthcare conferences. There are conferences for every field, but blockchain is not a field. There are no internet conferences, it’s a question of how do you utilize the latest tools of the internet in your business.”

Tough times not helping crypto traders

Cointelegraph spoke to Richard de Sousa, founder and CEO of local cryptocurrency exchange AltCoinTrader, to get a sense of the appetite for trading in South Africa. De Sousa estimated that the platform currently caters to around 500,000 users that are actively trading, with 90% of them being South Africans. He also mentioned that they have some users from as far afield as Russia and the United States. 

Speaking from a South African perspective, De Sousa believes that the current economic climate has not made things easy for crypto traders. Nevertheless, he maintains that there is a healthy interest and participation from local traders, saying, “I think that a lot of people underestimate the trading community in South Africa.” He then added:

“However what we have seen in the last two to three years, because the economy has really been hard hit, the pool is getting smaller and smaller. We simply don’t have spare cash to put into speculative assets. Those that had some of these assets are being forced to sell them just to make ends meet.”

De Sousa is still optimistic that many South Africans are well-informed about cryptocurrencies and that many see the value in trading and investing in cryptocurrency assets — Bitcoin in particular: “The South African crypto trading community is big but the Bitcoin community is much bigger and there are a lot of people that still consider it a very good asset and a store of wealth.”

Going beyond the hype

The issue of education is another major consideration when it comes to the proliferation of cryptocurrency trading. Mistrust and misconception yet prevails around cryptocurrencies and their perceived use as a means to facilitate illicit activities around the world. Binance South Africa country manager Tanya Knowles told Cointelegraph that education is an important factor in growing the use of cryptocurrencies in Africa.

“The biggest thing right now with Binance coming into the country is to ensure there is education around scams that are associated with anything that we do. We have to have a lot of emphasis around security, make sure people are using 2FA and other safety measures. We need to get the basics in place before we open it up and say, go wild and start trading.”

Knowles added that the simplest way for people to become acquainted with cryptocurrencies was to begin trading with small amounts, starting with crypto holders giving non-holders small amounts of crypto as an introduction: “If you give somebody R100 in crypto, they’ll learn a way to either use it or spend it and I think that practical experience is the best way to role it out.”

Michelle Nsanzumuco, Fintech4Good lead for Africa, told Cointelegraph that the cryptocurrency sector is growing in pockets around the continent.

“You’re finding that there are niche pockets and areas of interest and some countries where people are actively using crypto. Places like Zimbabwe, Nigeria and South Africa where there is an active crypto community that is really starting to get engaged in crypto.” 

These small sectors of adoption are a positive sign, but Nsanzumuco also stressed that education on the subject needs to be improved to help the cause, as a lot of young people seem to be interested in the sector. She added:

“Speaking to more senior organisations and groups, the perception isn’t always positive — there’s that branding of all the dodgy stuff with crypto. There’s still quite a lot of education that needs to come and with education we will get adoption. Without the education and the no-how, it will be very difficult to remove ourselves from the hype.”

Nevertheless, the fact that Africans have adopted and driven the development and widespread use of mobile payment systems across the continent is a positive sign for the uptake of new technologies and platforms. Nsanzumuco also said:

“If you look at mobile payments, sub-saharan Africa created it. It’s not something that is new to us and I think just based on that, the fact that Africans are familiar with mobile payments might make it a little bit easier to engage with platforms and emerging technologies.”

The Blockchain Africa Participants Optimistic About Continent Becoming Center of Progress

Several use cases for blockchain-based solutions in Africa could potentially drive the technology forward in a global context.

The Blockchain Africa conference produced a swathe of optimism for Africa to become a driving force behind the development and use of new blockchain-powered technologies.

Over the past few years, blockchain has replaced cryptocurrency as the “it” word in the fintech space. It is a fact that was mirrored by the Blockchain Africa conference itself, with speakers focusing more on the possibilities of blockchain answering a number of industry inefficiencies, and far less on cryptocurrency trading and tokenized solutions.

Africa has its own unique challenges in the global space given that many of its countries are trailing behind the rest of the world in infrastructure development. While the asymmetric digital subscriber lines and fiber internet connectivity is still being rolled out in many countries, mobile tower services have driven the proliferation of mobile payments systems.

To say that Africans have taken to these services would be an understatement. The M-Pesa mobile payment service is a prime example that shows Africans can quickly adopt technologies that improve their day-to-day lives. Mobile network provider Vodafone estimates that over 37 million people across seven African countries currently use M-Pesa, which was launched in 2007.

This is just one example of how people in Africa have benefitted from a future-forward solution to build a bridge to the people that are unbanked on the continent. In general, fintech solutions are being readily adopted and driven by African countries and companies. As Cointelegraph reported in an event recap of the Blockchain Africa conference, blockchain technology is already being explored by trade finance, supply chain and self-sovereign identity sectors. Here are the main use cases that can be observed right now:

A solution for Africa’s ID problems

The issue of Self-Sovereign Identity is a particularly interesting one in an African context, given the difficulty many people on the continent face when trying to obtain ID documentation. By way of definition, SSI refers to a situation where individuals hold and control their own identification credentials.

Victor Mapunda, CEO and founder of startup FlexFinTx, made a compelling case for a move to digital-based identities at the Blockchain Africa conference. In his presentation, data quoted by Mapunda estimates that nearly 400 million Africans do not have proper identification credentials. This then leads to a multitude of difficulties, as these people are unable to open bank accounts, apply for insurance or other financial products.

Related: Blockchain Digital ID — Putting People in Control of Their Data

Being banked and having insurance is a luxury when considering the deeper problems that are plaguing the continent. Referring to information supplied by the Mo Ibrahim Foundation, only eight African countries have birth registration systems that cover 90% of the population.

Countries like Chad and Tanzania are only able to cover 12% of births in the country. Conversely, Egypt, Mauritius and Seychelles are the only three African countries that register deaths covering more than 90% of their population.

The key takeaway is that there is a sizable gap in providing Africans with vital identification documentation, which is primarily due to institutional inefficiencies. Data capturing and information sharing is therefore impacted, leaving various institutions lacking in information, unable to serve the public needs efficiently.

Mapunda hails from Zimbabwe and began exploring the issue of SSI when he faced his own difficulties in trying to register a bank account after studying abroad. FlexFinTx seeks to provide people with a digital ID through WhatsApp, which facilitates the issuance of a FlexID that is cryptographically secured by the Algorand blockchain. Users then have self-sovereign control over how their data is shared. Speaking to Cointelegraph after his presentation, Mapunda said that African people can quickly take to solutions that solve wide-ranging problems:

“I think Africans, when it comes to adoption of technology, are some of the most dynamic people in the world, this is because, for the most part, we don’t have a lot of legacy infrastructure and institutions. Most of the things we’ve grown up with didn't work.”

Mapunda pointed to innovations such as mobile money and internet-based communication applications drastically improving Africans’ quality of life, saying, “Mobile money is a great example. We jumped on it,” and adding that no one even had to market it to the population. He went on to expand further:

“WhatsApp is a very good example of an application that didn’t have a single billboard, yet it managed to spread like wildfire across Africa. It solved a major problem — the cost of communication was too expensive and it's a natural solution that people gravitate to.”

An answer to supply chain challenges

Blockchain technology has long been touted as a key tool in improving current supply chain systems across the world. In the past three years, major strides have been conducted in this regard, providing real use cases to back up the theory. The subject was covered extensively at the Blockchain Africa conference and was particularly important considering the implementation of the African Continental Free Trade Area in May last year.

The move created a free-trade area that now includes 28 African countries, which requires member states to remove tariffs to provide the free trade of goods and services. While it improves the ease of trade, there are still some hurdles to clear in the trade finance and supply chain.

Thavash Govender, a data and AI specialist at Microsoft South Africa, spoke to Cointelegraph during the summit and said that blockchain technology could hold a number of benefits for trade across the continent:

“The one challenge that we have at the moment is trust between different countries. If I’m going to drop my trade barriers and say you can bring all your products into my country, I need to know that we aren’t allowing counterfeit goods in.”

Perhaps more importantly, Govender suggested that systems that are improved through the use of blockchain technology could drastically reduce the amount of time it takes for trade to take place due to inefficiencies in various processes, elaborating:

“If I’m an SME, I’m going to open up to a whole bunch of institutions that I just don't know. If we're all part of the same blockchain consortium, then I know I can trust what is written on the chain. Because I can trust the information, I can move a lot quicker. It’s not going to take me weeks of investigation, so I can grant loans quicker or get the trade finance process going a lot faster.”

Public procurement and corruption

Another interesting implementation of blockchain technology is in the space of public procurement by government organizations. Corruption is not a uniquely African problem, but it is one that affects many countries on the continent. Sope Williams-Elegbe, a professor and deputy director of the African Procurement Law Unit at Stellenbosch University, gave a presentation on the possibilities of blockchain addressing corruption in public procurement.

Related: Zimbabwe U-Turns on Crypto, Looking to Stabilize Local Economy

Williams-Elegbe said that 15%–22% of South Africa’s gross domestic product goes to public procurement. The problem is that the country loses 50% of this to corruption and fraud.

The professor believes that blockchain could be used to address procurement corruption but admitted that there are few to no use cases as of now. There is a lack of technical applications for public procurement, and it presents an opportunity for new solutions.

Forget the hype, build on working tech

Michelle Nsanzumuco, who acts as a senior advisor to the government of Bermuda and the Africa lead for Fintech4Good, spoke about a number of the sectors described above as being potential drivers of blockchain technology.

In an interview with Cointelegraph, Nsanzumuco highlighted supply chain and logistics as the key industry that can leverage blockchain due to the complexities of trade created by the sheer number of players in a value chain. Nsanzumuco said that a number of entrepreneurs and SMEs that she has interacted with often complained about the difficulties they face when conducting trade inside their own country:

“They’re finding barriers just within their own countries because they’re dealing with so many different players, fill in so much documentation before they can even get their products from A to B. Now we haven't even talked about cross-border transactions and trade. I can see it being a very strong use case for Africa specifically around supply chain and health care.”

Nsanzumuco added that blockchain solutions could improve the way health care systems track vaccinations and medications. Another factor is improving government services by digitizing a variety of manual data-capturing processes. Additionally, while strongly agreeing that the continent could be a leader in the blockchain space, Nsanzumuco cautioned against touting “blockchain” tech because of its marketability:

“A big warning for me having traveled around the world is not getting caught up in the hype. Let’s leverage real solutions in particular sectors where it can have an impact in Africa.”

Binance to Launch Fiat Support in South Africa, Donate $1M to Blockchain Education

Binance CEO announces launch of forthcoming fiat support for South Africa.

Binance CEO Changpeng Zhao has announced that the company will launch a fiat gateway for South African users, allowing them to make Rand deposits. The announcement was made on day one of the Blockchain Africa conference being held in Johannesburg this week.

CZ confirmed that South African traders would soon be able to make Rand deposits on the platform through the Binance website. This is part of an ongoing push into Africa that started in Uganda in 2018:

“Africa illustrates one of the largest demands and instrumental use cases for cryptocurrency, notably for financial access. According to the World Bank, approximately 66 percent of sub-saharan africans are listed as unbanked. So instead of trying to bank the unbanked, let’s try and Bitcoin the un-Bitcoined.”

With a foothold in 35 African countries, CZ said that South Africa was one of the bigger countries that the company had planned to service:

“Looking at South African specifically, crypto adoption continues to rise with SA being one of the top five countries in terms of cryptocurrency ownership. Today I’m excited to announce that Binance is launching a South African fiat-to-crypto gateway soon. This will enable South Africans to buy cryptocurrencies with their local bank accounts.”

Binance South Africa country manager, Tanya Knowles, elaborated on the company's plans in her own keynote speech on Wednesday. Knowles said that many South Africans currently enjoy freedom of information and movement, but lack freedom of money.

Binance, the world's largest cryptocurrency exchange by trade volume, currently supports trading in 180 countries and handles over 1.4 millions transactions per second. The value of its global transactions is around $4B per day, according to Coin360.

South Africans will soon be able deposit and use their Rands to interact with the entire Binance Ecosystem. Users will have access to give initial trading pairs including BTC/ZAR, BNB/ZAR, ETH/ZAR, USDT/ZAR and BUSD/ZAR.

Binance to directly invest in Blockchain education in South Africa

Knowles also announced that the Binance Charity Foundation would be donating $1M to support the growth and development of blockchain education in South Africa.

The organisation will be looking to partner with local companies in order to deliver effective educational programs to drive the development of the sector in South Africa.

Knowles told Cointelegraph that the Rand support would be officially launched on the Binance platform in the next few weeks.

Related: Blockchain Africa Conference Showcases How Tech Can Change the Continent

Blockchain Africa Conference Showcases How Tech Can Change the Continent

Industry experts tout blockchain as a development driver in Africa across a number of sectors at the Blockchain Africa conference.

Impressive use-cases of blockchain technology have come to the fore after the conclusion of the 2020 Blockchain Africa Conference in South Africa.

The event went ahead as planned in early March despite the global coronavirus pandemic that has made headlines around the world. The viral outbreak led to keynote speaker Charles Hoskinson, founder of Cardano, cancelling his trip to South Africa due to travel restrictions.

The event also suffered a drop-off in attendance due to fears around the virus, but there were still over 230 delegates present on day one while day two numbers dropped slightly.

Renowned cryptocurrency investor and analyst Tone Vays managed to fulfil his commitment to the conference with an insightful presentation on the value proposition of Bitcoin. His talk was praised by event organizers for bringing back a focus on cryptocurrencies,  which has become a neglected talking point at the African event in recent years.

The majority of speakers at the conference weighed in on a wide variety of subjects within the blockchain ecosystem with specific focuses on trade finance, self-sovereign identity and regulation.

Binance launching rand support, donates $1million to blockchain dev

One of the announcements made at the conference was Binance’s launch of a fiat gateway for South African users to make rand (ZAR) deposits on the global platform.

Binance CEO Changpeng Zhao made the announcement in a pre-recorded message to the conference. The support would include initial trading pairs with Bitcoin (BTC), Binance Coin (BNB), Ether (ETH), Tether (USDT) and Binance USD (BUSD).

The company currently has trading support in 35 African countries. Zhao believes the continent has massive potential for cryptocurrency adoption:

“Africa illustrates one of the largest demands and instrumental use cases for cryptocurrency, notably for financial access. According to the World Bank, approximately 66% of Sub-Saharan Africans are listed as unbanked. So instead of trying to bank the unbanked, let’s try and Bitcoin the un-Bitcoined.”

Trading support for the South African rand is expected to go live within the next few weeks. In addition to that announcement, the Binance Charity Foundation has also put forward a $1 million donation to support the growth and development of blockchain education in South Africa. 

The organization will be looking to partner with local companies in order to deliver effective educational programs to drive the development of the sector in South Africa. 

Binance South Africa country manager Tanya Knowles told Cointelegraph that the Foundation check that organizations that receive funding are making a tangible difference in the blockchain ecosystem: 

“We’ve got one or two NGOs that we are already having discussions with and the criteria is really the traceability of those contributions to beneficiaries to reach end users. We’re also trying to make sure that there is an educational element in that.”

Blockchain can drive trade finance in Africa

Trade finance and supply chains were another major talking point at the conference that already have working use-cases being powered by blockchain technology.

Tech industry heavyweight Microsoft was represented at the event by its South African Data and AI specialist Thavash Govender. The company already has it’s own blockchain-enabled enterprise solution Azure and is working hand-in-hand with Ethereum among other projects.

Govender believes that blockchain technology is specifically suitable for overhauling trade finance by improving traceability, transparency, auditability, efficiency and security of a wide variety of working parts, data and real life goods.

At the same time, Govender said that blockchain technology should only be considered in certain scenarios. This would include instances where projects need to process trust boundaries where multiple parties are using the same data. This prevents intermediaries from controlling or tampering with the data and will address tedious manual verification processes.

Nevertheless, Govender believes that Africa could become a leading force in integrating blockchain technology to improve trade finance and supply chains. He referenced the construction of cellphone towers in East Africa that allowed the development of the MPesa mobile payments systems in Kenya:

“Africa became a leader in mobile payments and it's still something that the rest of the world struggles with. Will we see the same necessity in fostering innovation by blockchain? Absolutely.”

Carlos Teixeira, global industry principal of Finastra, began his address at the conference by stating that “trade finance is deeply enabled by blockchain technology.”

Teixeira highlighted the fact that the trade finance sector has a massive number of moving parts, making use of an example of a pilot project that tracked a shipment from Kenya to Belgium. The shipment involved over 30 completely independent institutions, from the buyer and sellers to customs officers, logistics partners and financiers:

“Companies and banks are forming consortiums using new technology to overhaul current systems. We are looking at leveraging wider networks to give companies and banks information to make the right decisions.”

SA Reserve Bank acknowledges crypto is here to stay

The South African Reserve Bank — or SARB — also delivered a fairly positive update on its stance towards cryptocurrencies in the country. 

Anrich Daseman, senior fintech specialist at the Reserve Bank, told delegates that the institution had acknowledged that cryptocurrencies were “here to stay,” proven by the fact that a task force had been set up to develop regulatory frameworks for the sector.

Daseman also confirmed that the SARB would be issuing a draft policy paper on the regulation of cryptocurrencies in the country that would be released for public input in March. 

The SARB has classified cryptocurrencies on how they are used and how they derive value. Daseman said that cryptocurrencies can be used as a method of payment, investment as well as other utilities, but the SARB does not recognize virtual currencies as legal tender.

The Reserve Bank has taken a keen interest in the space due to a number of reasons. Firstly, the institution is tasked with regulating monetary policy and in theory, when demand for cryptocurrencies increases then the demand for fiat money will decrease.

There is also the consideration of cryptocurrencies becoming a parallel payment system and the SARB needs to protect its national payment system. Financial stability is also a consideration, considering that crypto market capitalization growth could expose conventional financial systems to the inherent risks of cryptocurrencies volatility.

Exchange control regulations also need to be considered in the cryptocurrency space in regard to the movement of capital. Market integrity is another area that is a focus, in an effort to create a fair and transparent space that also considers Anti-Money Laundering and Counter Terror Financing concerns.

Daseman said that there is still a perception that the very nature of cryptocurrencies works hand in hand with illicit activities:

“Many feel that we shouldn’t have exchange controls for the space but the reality is that they are there in conventional markets for a reason and we need to look at it.”

SA government sees blockchain driving economic growth

Members of branches of the South African government also made some positive statements about the potential of blockchain technology and cryptocurrencies to uplift South Africa and the wider continent.

As Cointelegraph reported at the conclusion of the conference, Mpho Dagada, Commissioner on the Fourth Industrial Revolution for the South African Presidency, made a bold statement that touted blockchain technology’s potential to help reduce unemployment and bolster the country’s Gross Domestic Product.

Related: South Africa Looks to Blockchain to Reduce Unemployment

Dagada said that the technology could plug into existing artificial intelligence systems in the mining sector:

“When we look at where the world is going, it’s important to leverage our strengths and align with that. If the world is moving towards more blockchain systems that are transparent and people want that, we know there is strength in Africa’s minerals and why not plug that in on top of the sector? We might find that we’ll solve the problems we have, like corruption or bringing access to markets. These problems could be solved by us bringing in these solutions and allowing them to plug and play.”

South Africa’s Office of Digital Advantage is also pushing to invest and support blockchain-based projects according to Akhona Damane, who heads up the department.

Damane highlighted the fact that the ICT sector in South Africa had already outgrown the country’s agricultural industry in terms of GDP. That has led to a drive to increase investment in the sector and explore new technologies like blockchain:

“We reali`ed we can go into the blockchain space and drive development that goes a lot further than cryptocurrencies. While there are limited tech skills in the country, the local blockchain ecosystem is growing, driven by startups. The space now wants government involvement.”

A major takeaway has been the formation of the South African National Blockchain Alliance, which will be officially launched next month. The working group will look to develop opportunities for the blockchain industry.

Self-sovereign Identity 

Self-Sovereign Identity was a particularly important talking point at the conference that addresses a major problem across the continent.

Victor Mapunda, founder and CEO of FlexFinTx, presented data that estimates that around 400 million Africans do not possess proper identification documents.

As a result many Africans are unbanked and have little to no access to insurance services. Mapunda said that institutional problems are a main reason for the status quo. Slow processing services and a lack of information sharing between governments, financial and healthcare institutions has exacerbated the problem.

On the bright side, Mapunda said that the situation has led to the development and proliferation of mobile money systems in Africa that do not need to meet Know Your Customer requirements.

The investigation into potential solutions has led to blockchain technology representing a not yet seen ability to tackle these problems. 

Mapunda told Cointelegraph that African governments have a lot to benefit from having mass, nationwide identity solutions. He said that a primary problem for African governments are massive tax gaps. Mapunda used his native country of Zimbabwe as an example, highlighting massive unemployment rates which means most people exist within the informal economic sector:

“Most of their earnings and business transactions go completely under the radar of the government and they lose billions of dollars as a result. By having a system or platform where everyone is participating in a semi-formalized system on a digital scale they’ll be able to know what’s going on in their own communities.”

The uptake of these digitized solutions should benefit government, private companies and citizens alike according to Mapunda:

“Digital identity platforms typically move people from that informal sector to a digital, formalized scale where both government and the private sector are able to start offering better products and services to those people.”

A promising African future

There was an air of optimism at the 2020 Blockchain Africa conference driven by insightful presentations from various industry leaders.

There seems to be a strong sentiment that blockchain technology could provide the backbone for new solutions to uniquely African problems. Furthermore, a number of speakers went as far as saying that the continent could become a driver of development and adoption in the future.

The proliferation of mobile payment services was often referred to as a prime example of a space that Africa has completely adopted and dominated.

Related: Blockchain Africa Forges Ahead Despite Coronavirus Concerns

South Africa Looks to Blockchain to Reduce Unemployment

The South African Presidency is touting blockchain technology to reduce unemployment and drive GDP growth in the country.

The South African Presidential Commision on the Fourth Industrial Revolution believes that blockchain technology and Artificial Intelligence could help reduce unemployment in the country.

Commissioner Mpho Dagada told the Blockchain Africa Conference in Johannesburg this week that blockchain could bring important economic benefits.

“We face two significant challenges in the country: reducing unemployment and increasing our Gross Domestic Product (GDP),” he said. “[The] Fourth Industrial Revolution policy creation can create economic growth in the country.” 

Dagada said that South Africa’s mining sector in particular could benefit from forward thinking solutions utilizing blockchain technology, in partnership with AI:

“The South African economy has natural resources, a mature financial services sector and is an economic and political powerhouse. If the strength of Africa is in minerals, the world is looking at better ways of tracking data in that space.”

Blockchain to provide insights, solve corruption

Speaking to Cointelegraph after the presentation, Dagada expanded on the idea that blockchain could help provide more transparent, data-focused insights in the mining sector:

“When we look at where the world is going, it’s important to leverage our strengths and align with that. If the world is moving towards more blockchain systems that are transparent and people want that, we know there is strength in Africa’s minerals and why not plug that in on top of the sector? We might find that we’ll solve the problems we have, like corruption or bringing access to markets. These problems could be solved by us bringing in these solutions and allowing them to plug and play.”

However Dagada added that one major hurdle is holding onto local talent in the Fintech sector, as they tend to leave the country for greener pastures. He made mention of figures like Civic founder Vinny Lingham, who left South Africa before making waves in the blockchain and cryptocurrency space.

Dagoda said the South African government has a positive attitude towards the use of cryptocurrencies, as long as users abide by rules and regulations.

“The outlook from the country is that cryptocurrencies and blockchain technology are a good thing and are more than welcome. What is frowned upon is people misusing them, for example someone evading tax, leaving the country and taking all their Bitcoin with them. But the use, creation and interaction within the confines of the law is more than welcomed by the government.” 

Blockchain can drive ICT development

Backing up the positive sentiments of the South African Presidency, the Office of Digital Advantage is actively looking to support blockchain projects in the country.

The office falls under the jurisdiction of the Council for Scientific and Industrial Research (CSIR), which is driving the Information and Communications Technology (ICT) sector in the country. A prime example is the Square Kilometre Array, the world’s largest radio telescope project between South Africa and Australia.

Akhona Damane, who heads up the Office of Digital Advantage, said that South Africa spent 10 percent of its GDP on ICT goods and services, most of which are imported.

“We need to increase investment in the ICT space and we need a framework to guide the development of technology in the country. A particular challenge in the ICT space is getting new patents registered in the country.”

In terms of blockchain technology, the CSIR has introduced a mandate to look into new areas and run programmes that will attract investment from the private sector and government. Damane said the local blockchain sector needs the help of investors and policy makers:

“We realised we can go into the blockchain space and drive development that goes a lot further than cryptocurrencies. While there are limited tech skills in the country, the local blockchain ecosystem is growing, driven by startups. The space now wants government involvement.”

Damane also revealed that the South African National Blockchain Alliance will be launched in April 2020 to develop opportunities in the blockchain industry and to enable collaboration with other sectors.

Potential projects using blockchain could include digital identity, eVoting, food tracing and safety, health care and eTenders. Damane added that the government intends to introduce tax breaks for companies investing in Research and Development.

Blockchain Africa Forges Ahead Despite Coronavirus Concerns

The Blockchain Africa conference is underway despite reduced attendance in Johannesburg due to Coronavirus concerns.

The Blockchain Africa conference kicked off on Wednesday in Johannesburg, South Africa, despite rising concerns about the Coronavirus outbreak.

South Africa’s first cases of COVID-19 were confirmed at the beginning of the month. As of March 11, thirteen South Africans have tested positive for the virus.

Despite the relatively low infection rate in the country, the South African government has taken a proactive and cautious approach to the virus. They have based their considerations on the dire situation in countries like China and Italy.

Nevertheless, the ongoing crisis and travel restrictions have led to some difficulties for Blockchain Africa’s attendees. Multiple day-one speakers were struck from the official programme, and Cardano founder and keynote speaker, Charles Hoskinson, cancelled his trip to South Africa entirely.

Tone Vays, the renowned cryptocurrency investor, carried out his commitment as one of the key speakers at the event, having travelled to South Africa more than a week before Blockchain Africa commenced.

During a panel discussion, Vays acknowledged that the global situation surrounding Coronavirus could potentially have a direct effect on the cryptocurrency markets:

"I could see that as being pretty bad for Bitcoin. We are already seeing massive global economic disruption that is affecting global markets. If there is a huge economic disruption, company's close and people stop investing. People won't be speculating on Bitcoin. If you lose your job, you're not going to be buying Bitcoin, you'll probably sell it to put food on the table."

The conference is being hosted at Investec’s Johannesburg headquarters. Initially, Organizers expected over 500 delegates to attend the two day summit.

Event organiser, Sona Kuhnel, told Cointelegraph that just under 300 delegates had been expected on day one. However, only around 230 people had officially registered by the time the event got underway.

Mention was also made of Coronavirus' anticipated effect on the global economic markets. Richard de Sousa, founder of local cryptocurrency exchange, AltCoinTrader, told Cointelegraph that the noticeably low attendee numbers were likely due to the viral outbreak:

“I think the conference was pretty well timed, considering that the Coronavirus isn’t that bad yet. I think if we had this conference a couple of months we would have seen a lot worse. But it has taken a toll on the numbers of attendees this year.”

De Sousa also conceded that the tough economic climate could have some sort of effect on trading volumes, in part due to the virus’ impact on different countries.

Binance South Africa Country Manager, Tanya Knowles, serves as MC for the event. She admitted that the escalating situation had made things difficult over the past few days:

"Luckily with technology we were able to go ahead with the conference, with some speakers choosing to send in pre-recorded presentations, while some delegates opted to watch the livestream. But the Coronavirus has put some stress on the organisers."

Frisco d’Anconia, founder of African Blockchain University, travelled from Mauritius to attend the conference. He stated that he had not been put off by Coronavirus fears:

"I'm not worried about the situation. I think it's being overhyped. In my line of work, if I don't travel, I can't make money."

Blockchain a Home-Run in the Sports World — Use Cases Climbing in 2020

The use of blockchain technology to improve a variety of offerings has become a reality in the world of sports in 2020.

The new decade has kicked off with blockchain technology finally being utilized in real case scenarios in the world of sports. Many blockchain proponents are enthusiastic about the wide variety of potential use cases, but real-life working examples are often hard to come by.

The potential of the technology to underpin a variety of systems within the sports sector has long been discussed, but just two months into the new year, there have already been several prominent use cases where blockchain technology is being used to improve offerings to fans.

From the football-mad continent of Europe to the world of the NFL and Major League Baseball, blockchain-based applications are being used to improve ticketing, merchandising and interactions between audiences and sports teams and organizations.

Tickets to the UEFA EURO on blockchain

Every four years, the best international football teams in Europe battle it out in the UEFA European Championship, more commonly known as the Euros to football fans. The 16th edition of the tournament will be hosted by 12 cities across the continent between June and July. The best 24 teams that progress through the qualifiers will battle it out to be crowned the kings of European football.

Ticketing is one of the most challenging aspects for the tournament’s organizers, with over 28 million ticket requests for the 2020 showpiece across 200 countries.

For the first time ever, UEFA has turned to a blockchain-powered mobile app to provide a contemporary ticketing solution for fans. UEFA aims to supply and deliver 1 million tickets through the Euro 2020 app.

There are some benefits to the app-based ticketing system. Firstly, it will rule out the possibility of replicating tickets. Fans won’t need to visit ticketing offices either, they’ll simply have to turn on WiFi on their smartphones when they arrive at the stadium, which will then activate their ticket QR codes and allow entry. The move also eliminates paper waste.

The primary benefit of an app-based ticketing system is the ease of distribution across the sheer number of countries. Ultimately, UEFA’s move to use blockchain technology to power its ticketing operation is a major boon for the industry. Given that football is the most popular sport in the world, the adoption of the technology could set a trend for other service providers to follow.

Vote on club matters with Socios

Blockchain-powered fan engagement platform Socios seems to be setting the tone for adoption in the sporting world. As previously reported, the Socios platform allows sports organizations and teams to launch their own tokens that can be used for a variety of activities on the platform. Users can participate in votes for club decisions as well as use tokens to access content and memorabilia.

The platform has collaborated with a number of the world’s biggest football clubs over the last few years — such as Barcelona, Juventus, Paris-Saint Germain, Galatasaray, Atletico Madrid and A.S. Roma among others.

Related: Chiliz CEO Alex Dreyfus Explains the Relationship Between Sports and Crypto

Socios welcomed Barcelona to its platform in February 2020, just a week before announcing its move into the American sports market. Chiliz, the fintech platform that created Socios, has also teamed up with marketing agency Lagardere Sports and Entertainment.

The agency has a major foothold in the United States, and Chiliz is hoping to onboard a number of new teams and organizations to the Socios platforms through Lagardere. Teams involved in the NFL and Major League Baseball are obvious targets.

Fantasy football powered by digital trading cards

A number of football teams have also been licensed in the digital collectibles space in a partnership with blockchain platform Sorare, which was announced in February 2020. The platform offers fans blockchain-based player trading cards that are used to play a five-card fantasy football game. The player cards earn points in relation to their actual player’s performance in real-life games.

Cards are tiered, with the rarest cards guaranteed digital scarcity through blockchain technology. Cards can also be transferred to the Ethereum blockchain. According to the platform’s website, over 38 clubs have been officially licensed.

The Sacramento Kings lead the way in blockchain-based offerings

A couple of NBA teams have welcomed the cryptocurrency sector by accepting payments in Bitcoin (BTC) over the past few years.

The Sacramento Kings and the Dallas Mavericks have allowed fans to purchase tickets and merchandise using Bitcoin. The Kings have done so since 2014, while the Mavericks began accepting the cryptocurrency in 2019. 

The Sacramento Kings are likely the most innovative blockchain adopters in the sporting world. The organization claims to be one of the world’s most technologically advanced sporting brands. The Golden 1 Center stadium’s roof is covered in solar panels, boasts ridiculously fast WiFi for fans, and has a cryptocurrency mining operation running in its data center — the proceedings from which are donated to local charities. 

If that is not impressive enough, the Kings also offer fans exclusive memorabilia and other items on a couple of blockchain-based platforms. In 2019, they launched crypto-collectibles powered by the Ethereum-based platform CryptoKaiju.

Following that, the Kings unveiled a new offering in January 2020 in collaboration with Consensys that allows fans to bid for in-game sports gear worn by Kings players during live games through a mobile-based app. 

There’s a massive market for authentic, in-game items, but the authenticity of auctioned items has always been a pitfall. The app provides a solution to this problem by opening an auction marketplace that provides authentic game-worn items in real-time.

Lancashire Cricket Club looks to blockchain for tech-savvy ticketing

Following in the footsteps of UEFA, English county cricket club Lancashire announced that it would begin selling tickets through blockchain-based ticketing platform TIXnGO at the beginning of 2020.

The club will sell tickets to both local and international matches at Old Trafford cricket ground after testing out the platform in 2019. As more supporters have started to buy tickets online, the club is using the blockchain-based platform to combat ticket fraud and improve data on ticket distribution. 

The technology also makes it far easier for people to resell or transfer tickets to other supporters. Lancashire’s move is thought to be a first in the world of cricket and can be counted as another sports organization beginning to harness the advantages of blockchain-powered technology.

Actual use cases speak volumes for adoption

It is encouraging to see a number of organizations actively using blockchain technology to improve their offerings to sports fans. Whether it’s having access to exclusive content and memorabilia or knowing that the purchased tickets are authentically validated, sport enthusiasts are slowly being introduced to blockchain-based solutions even if they are not aware of it.