What is QAN? Taking Blockchain Solutions to the Next Level

With legacy blockchain protocols such as Bitcoin still struggling to alleviate its flaws surrounding speed, scalability, and energy-efficient transaction validation – a gap in the market potentially exists. Estonia-based start-up QAN claims to have solved the aforementioned issues via its QANplatform framework.

In a nutshell, its innovative Proof of Randomness (PoR) consensus mechanism is able to achieve high transaction throughputs in an energy-efficient manner, while at the same time supporting multiple developer languages. Moreover, the QANplatform has been built to counter the threats of advanced computing capacities of the future – notably Quantum computing attacks.

Qan

If you’re interested to find out more about QAN and how the platform aims to differentiate itself from existing blockchain protocols, be sure to read our comprehensive review.

What is QAN?

Launched in 2018 and backed by the Centrum Circle Group, QAN is a blockchain framework that aims to solve the ever-present issues found within existing projects such as Bitcoin, Ethereum, and Litecoin. This centers on issues concerning slow transactions, super low scalability capacities, a strong reliance on high energy usage to confirm transactions, and no safeguards in place to counter the potential threats of Quantum computing.

With that being said, the team behind the QANplatform has built a revolutionary consensus mechanism to take blockchain technology to the very next level. Known as Proof of Randomness (PoR) – the mechanism improves on the capabilities of legacy blockchain systems and thus, solves a lot of the problems mentioned above.

Without getting too technical, the PoR mechanism bases its principles on Algorand’s Algorithm, albeit, with the capacity to take scalability to the next level. As the mechanism does not rely on stakeholders needing to have synchronized clocks, the protocol is able to operate in an energy-efficient manner, without compromising on speed or security. In order to remain efficient at all times, QAN is able to facilitate the process of voting and block propagation concurrently.

QAN Features

We’ve broken the benefits that this yields in more detail below.

Scalability

It is no secret that Bitcoin is still being held back by its ability to handle large transaction volumes. In fact, the system still averages just 7 transactions per second (T/ps). On the contrary, the QANplatform has thus far achieved a throughput of 1,600 signed T/ps. Although these figures are primarily based on in-house testing, this at the very least presents promising results.

Energy Efficient

As we noted earlier, legacy blockchains such as Bitcoin are required to consume significant amounts of energy to keep the underlying eco-system safe and secure. This is effectively driven by the competitive nature of the Proof of Work block reward system that Bitcoin utilizes.

This is in stark contrast to the permissioned ledger system that the QANplatform is based on, not least because it has a strong commitment to fairer wealth distribution. This is further amplified by the PoR consensus mechanism, as the validation process ensures randomness beyond doubt.

Multi-Language Support

One of the biggest pain-points for seasoned developers is that they are often required to learn new programming languages to engage with the blockchain protocol. This is especially true with Ethereum, insofar that it requires developers to learn its native Solidity language in order to create smart contracts.

With that being said, the team at QAN are committed to making their blockchain platform more inclusive, by allowing developers to engage with the protocol via widely used languages that they already know and understand.

Fixed Transaction Fees

Whether it’s regarding a conventional token transfer or a smart contract deployment – transaction fees on the QANplatform are fixed. This ensures that QAN stakeholders, whom are mainly enterprises, are accustomed to a reliable and consistent pricing model.

On the contrary, existing blockchain infrastructures often utilize a variable transaction fee model, insofar that the underlying costs increase as the network experiences higher demand.

Quantum Resistant

One of the most promising features of the QANplatform is that it has been built from the group-up, subsequently allowing the network to counter the threats of Quantum attacks.

For those unaware, various commentators within the blockchain industry argue that once the capabilities of Quantum Computing are realized, they could have the potential to override consensus mechanisms such as Proof of Work. However, by ensuring that the network is Quantum Resistant, the team at QAN has built a blockchain system for the future.

QAN does so by utilizing Lattice-based cryptography. Briefly, it is resilient to quantum attacks thanks to how the digital signatures are built. Lattice cryptography has been widely recognized and is based on the work of 13 mathematicians across the recent 20 years.

Keeping the QANPlatform Secure

In terms of keeping the QAN ecosystem safe and secure, the decentralized platform utilizes two key stakeholders. Notably, this includes the node operators themselves, as well as randomly selected block validators. As both stakeholders are financially motivated, they are therefore motivated to keep the network free from the threats of malpractice.

Moreover, each and every stakeholder that wishes to participate as a block validator must pay a license fee. All license fees are then transferred to a decentralized deposit pool that has been installed to eliminate the threats of fraud. As such, there would be no motivation for block validators to engage in malpractice, not least because they would lose their license fee.

When it comes to revenue generation, the QANplatform achieves this from three key avenues. This includes the transaction fees paid by those using a smart contract; the code development costs paid by specific smart contract developers; and development costs paid by generic smart contract developers.

These fees then contribute to the stakeholders that are tasked with keeping the blockchain secure, subsequently allowing the QANplatform to operate in a self-sufficient manner.

QARK Token

The QANplatform has also created its own native cryptocurrency. Known as the QARK Token, the token will initially be launched as an ERC-20 token for the purpose of its fundraising campaign. This will be facilitated as an Initial Exchange Offering via the BitBay Exchange in Q4 2019.

In total, there will be 333,333,000 QARK Tokens in circulation, with two-thirds of this amount for sale on BitBay – across both a public and private sale.

Once the QARK Token makes the transition from an ERC-20 token over to that of a proprietary QANplatform token, it will be used to fuel the entire QAN ecosystem. This includes the block validation reward system, whereby stakeholders will be paid in QARK Tokens. Moreover, the QARK Token is also the currency of choice when it comes to paying license fees, which is a requirement to become a block validator.

Timeline Moving Foward?

The QAN project is still in its infancy, meaning that it still has a long way to go in achieving its long-term objectives. Nevertheless, the team will be engaging in their BitBay IEO soon, and the QANplatform’s initial demo launch is imminent.

In terms of the fully-fledged MainNet launch, this has been planned for Q2 2020. During the same quarter, the team at QAN is also planning to reach its target of netting 97,000 T/ps via its private chain.

Theoretically, at its currently QAN chain lab testing results of 1,600 T/ps, this carries the long-term target of achieving just over 155,000 T/ps. If this target can be realized, then this would be sufficient to facilitate the needs of virtually any industry sector. However, this is yet to be seen.

Conclusion

In summary, although the QANplatform is still in its very early days, there is much to like about the team’s ambitions. If the platform is able to realize its target of facilitating extreme scalability demands in an energy-efficient and secure manner, the project is likely to do very well.

Moreover, through its Proof of Randomness consensus mechanism, stakeholders are financially incentivized to keep the blockchain infrastructure free from the threats of malpractice. When you factor in the platform’s ability to counter the future abilities of Quantum Computing, QAN ensures that the underlying ecosystem is fully protected both in the short and long terms.

The post What is QAN? Taking Blockchain Solutions to the Next Level appeared first on Blockonomi.

Kryll Review: Automated Cryptocurrency Trading Bot Platform

Although the cryptocurrency markets have been in a state of stagnation since the turn of 2019, daily trading volumes are as strong as ever. For example, at the time of writing in April 2019, 24-hour trading volumes are averaging the $31 billion mark, with Bitcoin amounting to around 30% of this figure. These volumes illustrate that although we are still in a prolonged bear market, significant trading opportunities are still highly present.

One such organization that are looking to bring these trading opportunities to everyday consumers is that of Kryll. The project has launched an online platform that allows investors of all sizes to create automated trading strategies in a simple way.

In order to ascertain how notable the technology is, we decided to explore the project’s potentialities ourselves. Within our review we will discuss what Kryll actually is, how the platform works, and essentially, whether it fits in with your goals as a cryptocurrency day trader.

Kryll Review

Visit Kryll

What is Kryll?

In its most basic form, Kryll is an online platform that allows users to design and create their own automated cryptocurrency trading strategies. For those unaware, automated trading refers to trading activities that are executed by a pre-programmed script. As such, there is no requirement to choose trades yourself, nor do you need to actually execute buys and sells, as this is all performed in an autonomous manner.

If an investor is able to obtain such an automated trading protocol, it carries a number of key benefits. First and foremost, as automated trading does not require any micro-management, traders can simply sit back and let their strategies do their thing.

Strategy

Moreover, automated trading strategies do not suffer from fatigue, which essentially opens up the doors for 24/7 trading. Furthermore, and perhaps most importantly, if an investor is able to design a strategy that performs well on a consistent basis, they have the opportunity to make ongoing profits in a passive manner.

Although we will explore this in more detail further down, Kryll allows both beginners and more advanced traders to create custom trading strategies via a user-friendly drag and drop style platform. These blocks consist of key logistical characteristics such as market signals, as well as variables that include market volume and technical analysis indicators.

The easiest way to get your head around the model is to think about a Microsoft ‘if/when’ sum. Effectively, the ‘if’ is the market indicator such as trading volume, and the ‘when’ could be volumes that exceed $10 billion in a 24-hour period, for example.

The notable thing about the Kryll project is that users can integrate their automated strategies into major exchanges such as Binance and Bittrex, with more integrations in the pipeline. Even better, you can test-out your automated strategies in demo mode, subsequently allowing you to make tweaks before going live.

In terms of the the team themselves, Kryll is led by CEO Luca Benevolo and CTO Philippe Longere. Supporting the key management team are a plethora of expects from within the fields of software development, trading, law, machine learning and economic sciences.

So now that we’ve explored what Kryll is aiming to do, in the next part of our guide we are going to take a closer look at how the block design system works.

Kryll Dashboard

The Kryll Dashboard

Creating a Strategy: How Do Blocks Work?

Although the Kryll platform has been designed to appeal to traders of all experience levels, the block system can appear somewhat confusing at first glance: this is what you use to create your custom trading strategies and is actually very well designed once you get the hang of it.

As such, we’ll discuss how this works in more detail so you have a better understanding of how the strategy building process works.

Create a Strategy

Creating a New Strategy in Kryll

Wallet

To kick things off, the first block that you are required to create is your wallet. This represents the wallet portfolio for the specific strategy you are looking to create. This particular block is mandatory.

Price up and Price down

The purpose of the price up block is to trigger a movement when the market price of a specific cryptocurrency increases or decreases. Known as a ‘conditional’ block, you essentially tell your automated strategy to perform a certain action when a predefined condition is met. Here are some examples of what you can do.

  • Market evolution: You can place an automated trade when a specific price action occurs on the exchange you have integrated your strategy with. For example, you can instruct your strategy to purchase a cryptocurrency if the price drops by 10%, and then goes up by 5%.
  • Last order price: You can instruct your strategy to trigger when the price goes up or down by a certain percentage, in relation to your last trade. For example, if you purchased a cryptocurrency at $100, and the block specifies a movement when the price increases by 5%, then your strategy will trigger when the asset hits $105.
  • Average buy order: This particular block is useful is you are looking to engage in a controlled profit strategy. Essentially, the strategy is triggered based on the average purchase price of previous orders of the same cryptocurrency. For example, if you purchase a token at $80, $110 and $170, you could execute a new trade when the the price hits $120.

Volume

The purpose of the volume blockchain is to trigger a new automated trade when certain conditions related to trading volumes have been met.

  • Starting from last block: This is useful if you want to automatically execute a trade when volume goes up or down in comparison to the previous block. For example, if your previous block had a market volume of $1 million, and you pre-set the trigger at a 25% increase, then the trade would execute when volumes reach $1.25 million.
  • Rolling: This allows you to execute a trade based on specific volume conditions, such as ‘volume vs time’. In other words, you could for example pre-set the block so that a trade is placed if volume decreases by 50% in a 24-hour period.

Advanced possibilities

Other conditional blocks also exist, however the above examples should give you a better understanding as to how you lay the foundations for an automated strategy.

Next, you’ll then need to expand your strategy by increasing additional blocks. This will include an instruction linked to whether you want the trigger to buy or sell, as well as how much in terms of quantities. Moreover, you can also add in an ‘Or’ or ‘And’ block.

One again, this is very similar to the if/when function in Microsoft Excel, insofar that you can create additional layers to your trading strategy. In fact, the more layers you have within your strategy, the more advanced its trading capabilities will be.

Furthermore, for those with more advanced knowledge of trading, you’ll be able to insert blocks linked to technical trading indicators. This could include key trends such as the Moving Average Convergence Divergence (MACD) or Bollinger indicators.

So now that we’ve covered the basics of blocks, in the next part of our Kryll review we are going to look at the marketplace feature.

Kryll Marketplace

If you like the sound of automated cryptocurrency trading, but you’re not quite ready to take the plunge yourself, it might be worth exploring the Kryll Marketplace. In a nutshell, the marketplace contains ready-to-use trading strategies designed and built by other Kryll users.

Each strategy is completely transparent, meaning that results can be verified independently, and those using the strategy can leave public feedback and ratings. Moreover, you can even integrate your chosen strategy in to your demo platform, meaning you can test out the results for yourself.

While some automated strategies are free, others come at a cost. However, and as we’ll cover in more detail in the section, when you utilize a chosen strategy (whether it’s yours or rented from another user), you’ll need to pay fees to the Kryll platform.

Kryll Marketplace

The Kryll Marketplace

Kryll Token & Fees

The Kryll platform operates an online eco-system that aims to benefit all who use it. In order to fuel this ecosystem, the Kryll platform utilizes its own native ERC-20 token – which it calls the KRL token.

The KRL token has many functions within the Kryll platform. First and foremost, if you decide to use a Kryll automated strategy in live mode with one of the platform’s integrated exchanges, then you’ll pay a variable fee.

At the time of writing this amount to 0.0333% per day, based on the total amount of funds you have invested in your respective strategy.

For example, let’s say that you are using one of your strategies on Binance, which it trades the cryptocurrency equivalent of $1,000 in a 24-hour period. As such, you would pay a total of $1,000 x 0.0333%, amounting to $0.30.

Buy Kryll

These fees are highly reasonable, and would have very little effect on any profits or losses you subsequently make from the strategy.

We should also note that there are different fees depending on the amount of KRL tokens you currently have held in your account. If you hold no KRL tokens, then you’ll be accustomed to a daily fee of $0.06 for using the livetest feature, and you’ll not get any discount from your daily trading fees.

At the upper end of the pricing plan, a holding balance of 200,000 KRL tokens or more will get you a trading fee discount of 95%, plus reduced daily livetest costs of $0.01. Moreover, this plan gives you a total of 60 trading slots, as opposed to just 10 that you get with the most basic plan.

Furthermore, you might need to need to pay fees in the form of KRL tokens if you decide to rent a trading strategy that has been published by another user. This amounts to provider fees, and varies on a strategy-by-strategy basis. Some providers are also free, which incidentally does include some of the best performing strategies on the platform.

Which Exchanges can I use my Kryll Strategies on?

If you’ve found a strategy that you like the look of, or you’re ready to put your own trading strategy in to the wild, then there are a number of leading cryptocurrency exchanges that you can integrate it with.

At time time of writing, this includes:

Although this covers some of the largest exchange platforms in terms of trading volumes, the team at Kryll are looking to make more and more exchanges compatible.

In order to integrate your respective exchange account with the Kryll platform, you’ll need to go and obtain your unique API key. This effectively gives Kryll the authority to perform automated trades on your behalf.

Although your strategy will be operating in an autonomous nature, the Kryll platform does not have any access to your exchange login credentials, subsequently ensuring that your data remains secure.

The API process will differ depending on the exchange you are using, however in most cases you’ll need to get this from within your account portal. Once you do have it, you then simply enter it in to your Kryll account.

Similar Platforms

We have been covering this new wave of trading bots and platforms on Blockonomi for a while now, take a look at our guide to trading bots here for some more options. The following platforms are closest to the Kryll offering:

Kryll Review – The Verdict?

In summary, the team at Kryll have created a very unique product that essentially opens the cryptocurrency day trading doors to those that have very little experience of creating strategies, or those that simply do not have the time to day trade themselves.

Whether your Kryll platform strategies have any success is ultimately dependent on the specific strategy itself. If you are able to build a notable strategy, or you instead rent one from the Kryll Marketplace, then you have the potential to be sat in prime position on a 24-hour basis.

As such, if the underlying strategy finds a suitable trading opportunity, it can execute its strategy without you needing to be involved.

Finally, our review also found that the fee structure offered by Kryll is highly reasonable. The only caveat is that you will need to ensure that you have KRL tokens within your account at all times, to ensure that your strategies are able to trade on a 24/7 basis.

Visit Kryll

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Japanese Financial Regulators Receive a Stack of Exchange License Applications

Japan – the first nation that regulated Bitcoin and other cryptocurrencies in the very same manner as its domestic financial services industry, has been looking to step up consumer protections for some time now. One of the nation’s key targets in this respect is to further bolster its anti-money laundering (AML) and know-your-customer (KYC) controls.

With this being said, the Japanese Financial Services Authority (FSA) – the organization responsible for regulating the Japanese finance industry, dictate that cryptocurrency exchanges operating in the country must be in receipt of a full license.

Since the declaration, and according to CoinTelegraph, the FSA has since received more than 190 individual applications, subsequently resulting in an every-growing administrative backlog.

Japan Cryptocurrency

Japan Recognizing That it Must get Cryptocurrency Regulation Right

Japan is often regarded as one of the most crypto-friendly nations in the world. Not only are cryptocurrencies legally regarded in the same light as its domestic currency – the Yen, but the jurisdiction is also responsible for the largest volume of daily Bitcoin trading. Furthermore, it is now possible to physically spend Bitcoin in more than 200,000 real-world stores, with the number growing on a month-by-month basis.

However, at the other end of the spectrum, Japan has also been home to some of the largest cryptocurrency and blockchain asset scandals of all time. First and foremost, it was Japan that provided a home to the infamous M.T. Gox exchange, which at its height, was responsible for more than 70% of all Bitcoin transactional activity.

And then back in January 2018, Japanese-based cryptocurrency exchange Coincheck was accustomed to a wide-spread hack, which resulted in more than $532 million worth of NEM tokens being stolen. Although the exchange has vowed to pay each and every investor back, it once again puts a dim light on the credentials of crypto-related organizations operating in the country.

History of The Coincheck Hack

Read: The History of The Coincheck Hack: One of The Largest Heists Ever

Other examples are beyond the remit of this article, however it is important to note that they do exist. Therefore, it comes as no surprise that the FSA are looking to stamp-down, or at least significantly reduce, the amount of cryptocurrency-related scandals arising in the country.

Japanese Authorities Demand Reporting of Suspicious Activity

One of the main requirements that Japanese authorities are looking for in a cryptocurrency exchange license application is that the platform in question has installed a stringent AML and KYC program to ensure that financial crime is kept at bay. This includes an expectation for exchanges to submit a suspicious activity report (SAR) when the platform has reasonable grounds to believe that money laundering offences have been attempted by a user.

SARs are an AML tool used by the vast majority of global states, and they allow financial intelligence units to further investigate potential breaches of domestic regulations linked to money laundering and terrorist financing. In the 9 months between January and October 2018, the FSA received more than 5,944 reports linked to potential illicit usage of cryptocurrencies.

Reports of Suspicious Crypto-Related Activity on the Rise in Japan

This number is even more significant when one compares it to the 669 received in 2017. However, much like in the financial services industry, it is important to note that organizations often submit ‘Defensive SARs’ with the aim of protecting themselves in the event that money laundering abuse has in fact taken place. Rather than risk prosecution for non-reporting further down the line, it is believed that organizations submit a SAR just in case.

This can at times be counter-intuitive, insofar that it creates a significant back-log for financial intelligence units, as each and every SAR must be individually investigated, subsequently putting a strain on resources.

Ultimately, much like in the case of the submission of SARs, it appears that the Japanese FSA are also becoming overwhelmed with the number of outstanding exchange license applications.

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Coinbase Moves $5Billion Worth of Crypto to Kick-Start its new Digital Storage System

With major cryptocurrency exchange Coinbase now responsible for more than 13 million user accounts and their subsequent funds that runs in to the billions of dollars, it comes as no surprise that the exchange have further increased their security systems. According to the U.S. based platform, the company recently moved $5 billion worth of cryptocurrencies in to its upgraded storage system.

The fund movement consisted of 5% of all Coinbase Bitcoin holdings, alongside 8% of Ethereum and a huge 25% of Litecoin. As per Phillip Martin, the current head of security at Coinbase, the fund movement took in the region of four months to plan.

Coinbase Token Expansion Leads to Increased Security

One of the key reasons for the lengthy pre-planned security upgrade was to ensure the exchange are fully prepared for its ongoing token expansion, which has seen a range of new cryptocurrencies added to Coinbase over the past few months. Initially, the Coinbase business model focused on a select few cryptocurrencies – notably Bitcoin, Ethereum, Bitcoin Cash and Litecoin. However, the exchange has since added Ethereum Classic, Basic Attention Token and Zcash, among others.

However, the token expansion does not appear to be slowing down any time soon. For example, just yesterday the exchange announced that it was adding a further four tokens, with the selected projects being Golem, DAI, Maker and Zilliqa.

New Coinbase Storage Facility Explained

In terms of the underlying fundamentals, the newly updated Coinbase storage system originally started in October, where its technical team utilized a key generation process. In a nutshell, the process involved printing out a range of keys, and through the support of scan-friendly QR codes, these keys were subsequently split.

The cryptographic process, otherwise referred to as Shamir’s Secret Sharing, is a mechanism employed to keep private data safe and secure. Once the keys have been split, they are then distributed across multiple locations – requiring several Coinbase staff members to collectively unlock them. Although this process sounds very similar to a multi-sig wallet, the key difference is that it is compatible with cryptocurrencies that would otherwise not be suitable.

Is Coinbase Safe?

Read: Is Coinbase Safe? An In-Depth Look at their Security Measures

Ultimately, taking in to account the exchange’s appetite to attract institutional investment on top of its already significant retail customer base, alongside the fact that they have an excellent relationship with U.S. regulators, Coinbase will hope that their newly launched air-tight storage system will convince users that they are the third party platform of choice.

Coinbase Continue to put the Security of Customer Funds at the top of Their List

Whilst the risks of storing large quantities of cryptocurrency holdings in a third party online exchange remain valid, it must also be noted that Coinbase already have a significant amount of safeguards in place to protect customer funds. First and foremost, the platform claims to store 98% or more of customer funds in cold storage, with the remainder kept online to facilitate day-to-day liquidity.

The platform also offers a ‘Vault’ storage facility, which if utilized by the customer, puts an automatic withdrawal time-lock of 48 hours. This means that should the users’ account become compromised, there is a good chance that they would be made aware in the form of a notification, once the withdrawal request was made.

Furthermore, Coinbase have also installed an FDIC insurance program for those holding funds in a U.S. dollar wallet, up to a whopping $250,000. Even in the event that the exchange ceased to exist, customers would be insured up to this figure.

Ultimately, the numbers speak for themselves, insofar that Coinbase are yet to experience a significant hack – a feat they will no doubt be keen to retain.

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Bitcoin Generator Scam: Fools Victims in to Parting With 0.8 BTC

Although Bitcoin and other cryptocurrency scams are nothing new, it remains to be seen how scam artists are still able to successfully extort funds from unsuspecting victims in the most obvious of manners. In the latest scheme to be doing the rounds, a newly created ‘Bitcoin Generator’ has thus far managed to scam people out of the Bitcoin equivalent of $2,700, or 0.8 BTC.

The Scam, which is located at the website domain ‘bitcoin-generator-2018.bid’, was recently tested by cryptocurrency news platform CCN, to ensure that their suspicions were factual. The platform explains that those behind the scam claim that they have created a protocol that allows their system to effectively hack the Bitcoin blockchain. In doing so, they are able to obtain quantities of free Bitcoin, which they can then forward on to the user.

Bitcoin Scam

If it’s too Good to be True, Then it Probably is

First and foremost, it must be noted that in order to access the aforementioned illicit platform, users must approach search engines with specific terms such as ‘Bitcoin Generator’ or ‘Free Bitcoin’. In this sense, it could be argued that the mindset of the user is to obtain Bitcoin(s) without having to pay for them, or receive significantly more than they outlay.

Once the ‘bitcoin-generator-2018.bid’ domain is accessed, the user is then asked to enter the personal Bitcoin address that they want the generated coins to be sent to. Next, the user is then afforded the fictitious luxury to enter the amount of BTC they want to receive.

Bitcoin Generator Scam

Fake Java Script Generation all Part of the Ploy

Once the user clicks on the confirm button, a well-designed Java Script appears on screen, with the platform advising the user that the technology is currently engaging with the Bitcoin network, in order to generate their free coins.

After a few seconds of the fake generation process, a new box appears, telling the user that the “Exploitation was successful and the coins will be sent to you shortly“. However, as would be expected from such a scam, prior to funds being forwarded on to the previously supplied Bitcoin address, the user is asked to pay a ‘Transaction Fee’.

In terms of justification, the fake Bitcoin generator explains that in order for new blocks to be generated on to the blockchain, a small fee must be paid to miners in return for their efforts. As a result, once the small fee is paid to the provided Bitcoin address, the platform states that the generated Bitcoin will then be forwarded to the victim.

As per the covert exercise employed by the team at CCN, for a request of 0.1 BTC (which is the minimum that the fake generator permits), the stated fee is 0.002 BTC. Therefore, should an unsuspecting user fall victim to this particular example, the scam artist would have walked away with 0.002 BTC.

Well Known Bitcoin Faucet Might be Behind the Scam

Further research in to the scam, according to CCN, indicates that popular Bitcoin Faucet provider ‘Moon Bit’ may have had some involvement. The reason for this is that one of the requested Bitcoin addresses, which the scam provides to the user for the fictitious transaction fee, is associated with Moon Bit.

In total, the associated Bitcoin address, 15nLNJc9rfRhqgQMU6F9y85t3hSMG6AYwa, has managed to receive just over 0.8 BTC in payments. Although such scams are nothing new, if anything, it does indicate that the underlying characteristics of the blockchain protocol offers an element of transparency, not least because reporters at CCN were able to effectively link the Bitcoin generator address to that of Moon Bit.

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Allianz Global Investors CEO: Cryptocurrencies Should be Made Illegal

The legitimacy and efficacy of the cryptocurrency and blockchain technology industry has been a hot topic of debate among governments and leading financial institutions in recent years. In spite of the growing global movement to invest in popular digital currencies such as Bitcoin and Ethereum, some major key players remain unconvinced and even hostile towards its official regulation.

According to a recent publication, Andreas Utterman, CEO of Allianz Global Investors, has stated that cryptocurrencies in their entirety should not be regulated. On the contrary, Utterman believes that the European Union should instead move to have the digital phenomenon outlawed across the region.

Allianz

He recently voiced his position to the head of the Financial Conduct Authority in Britain, stating

“Cryptocurrency should be outlawed. I am surprised that regulators haven’t put in more effort in the industry.”

For those unaware, Allianz Global Investors are a leading asset management organization that are responsible for 500 billion Euros in client funds. The company employs close to 3,000 staff members and have offices in over 20 jurisdictions.

The Current General Consensus

The general consensus at the moment appears to lean towards stringent regulation to oversee the application and usage of cryptocurrencies in the European marketplace. For example, the European Union explained in 2015 that “virtual currency is a digital representation of value, not issued by a central bank, credit institution or e-money institution, which, in some circumstances, can be used as an alternative to money”, subsequently illustrating that cryptocurrencies should be viewed as a form of currency.

Moreover, recent discussions on the upcoming European Union 5th Money Laundering Directive have made specific reference to regulating cryptocurrencies and blockchain technology.

At the recent G20 summit, this positon was reinforced by 20 of the largest economies who came to the consensus that cryptocurrencies will be regulated but not banned. It was stated that “Cryptocurrencies will be regulated for anti-money laundering and to counter funding terrorism in accordance with the FATF standards. We will also give consideration to other responses needed.”

Individuals like Utterman who believe that cryptocurrencies should be made illegal are largely concerned that it will be used for illegitimate business transactions and may allow for the perpetration of fraudulent activity.

Bitcoin Money Laundering

Read: Bitcoin and Money Laundering: Complete Guide to Worldwide Regulations

Interestingly, the nature of blockchain technology is such that individuals will still be able to transact regardless of whether their government decides to regulate the platform or not. The impressive security and transaction speed offered by cryptocurrencies means that demand for it is unlikely to fall anytime soon.

Other financial instructions do not follow the same sentiment

Utterman’s position on the legitimacy of cryptocurrencies might be viewed as compelling, being the head of a global hedge fund. Nevertheless, other major financial institutions do not follow the same sentiment. For example, in July 2018, it was reported that global hedge fund Northern Trust were looking to involve their private equity division into blockchain assets. The financial institution, who currently manage in excess of $950 billion worth of client funds, also mentioned that they are looking to facilitate institutional scale custodianship services.

In a further blow to Utterman’s viewpoints, the Securities and Exchange Commission, who regulate the U.S. financial markets, are currently in the process of reviewing an application for the world’s first ever Bitcoin exchange traded fund (ETF). If the U.S. based regulator approve the application, which has been fronted by the Chicago Board Options Exchange, will provide the cryptocurrency industry with a significant element of legitimacy. As a result, Utterman’s comments regarding an outright ban of the digital currency arena may become somewhat redundant.

The post Allianz Global Investors CEO: Cryptocurrencies Should be Made Illegal appeared first on Blockonomi.

Binance Launches Industry Standard ‘Gold Label list of Crypto Projects

It comes as no surprise that leading cryptocurrency exchange Binance have yet again hit the blockchain headlines with the announcement of a new project, as 2018 has been an extremely busy year for the company. Not only did Binance move their headquarters to the European Island of Malta, but they are also believed to be in the process of launching the world’s first ‘Blockchain Bank’.

With the close of 2018 soon approaching, the exchange has decided to add one more project in to the mix before year-end. As recently published through the official medium channel of Binance, the platform have announced that they have just launched a list of what it deems ‘Gold Label’ cryptocurrency projects.

Binance Gold Label

The concept behind the launch is to provide the cryptocurrency industry with a fully vetted list of credible projects, with the ultimate aim of separating the wheat from the chaff. The initial Gold Label list contains 30 cryptocurrency coins and tokens, ranging quite significantly in size, market capitalization and reputation.

It remains to be seen what effect the Binance Gold Label listing will have on the long-term pricing viability of the project’s listed, especially when one considers that we are in a prolonged period of bearishness. Nevertheless, the full list of the 30 projects are listed below.

Zcoin, YOYOW, Wanchain, Verge, Tron, Skycoin, Quark Chain, Qtum, QLC Chain, Project Pai, OST, Ontology, NULS, Nexus, NEO, Nebulas, Nano, Aeron, IoTeX, IOS Token, H Cash, GXChain, Gifto, Genesis Vision, Enjin, Digix Global, Cybermiles, Contentos, Bluzelle, and Aelf.

Binance Info Look to Become the hub of Cryptocurrency Information

The specific entity behind the Gold Label list is Binance Info, a side project of the main Binance trading platform. The Binance Info arena provides a range of information linked to more than 1,000 blockchain asset projects, including real-time market pricing, trading volumes and overall project analysis. The idea behind the platform is provide the cryptocurrency community with an impartial space to ascertain whether a project is worth backing.

According to the medium post that Binance used to announce the list, the 30 projects that made the cut were required to go through a vigorous verification process. As per the publication, all of the cryptocurrencies that made the cut are projects that “keep blockchain enthusiasts informed and updated.”

The team at Binance also made it clear that the list will not be restricted to the 30 projects that currently hold the Gold Label. On the contrary, all projects have the capacity to apply for the listing, as long as they meet the minimum expectations, which are based on transparency and regularly updating investors. 

Gold Label List Varies Quite Considerably

In terms of market capitalization, the largest project that made the Binance Gold Label list is that of TRON. The Chinese-based cryptocurrency project, which at the time of writing is positioned at number 10 with a market capitalization of just under $1 billion, aims to revolutionize the digital space by decentralizing the World Wide Web.

At the other end of the spectrum, Genesis Vision – who are looking to target the private trust management markets, currently sit with a market capitalization of just under $20 million, as per data retrieved from CoinMarketCap at the time of writing.

In theory, the Gold Standard list is a good idea, especially if it has the potential to motivate cryptocurrency project leaders to keep token holders updated at all times. Furthermore, it also has the potential to red flag murky projects that might otherwise stay under the radar.

However, it must also be noted that the Binance Gold Label list is a somewhat subjective viewpoint of a single entity operating in the blockchain space. Ultimately, the list may hold more credence if the verification process was conducted by multiple industry leaders, or better – an impartial third party

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U.S Department of Homeland Security Considering How to Investigate Blockchain Transactions

With global governments beginning to increase their commitment to preventing, detecting and subsequently seizing criminal proceeds held in the form of cryptocurrencies and blockchain technology, it appears that the U.S. Department of Homeland Security are looking to follow suit. The governmental department recently published a pre-solicitation notice, with the view of obtaining information from relevant stakeholders regarding the investigatory process of blockchain forensics.

For those unaware, pre-solicitation notices issued by U.S. governmental agencies are a way for interested stakeholders to ask specific questions related to a potential proposal. In the case of the pre-solicitation issued on November 30th, titled ‘The Department of Homeland Security (DHS) Small Business Innovation Research (SBIR) FY19 PreSolicitation’, the notice is linked specifically to blockchain analysis.

Bitcoin Privacy

Upon breaking the notice down, it appears that the Department of Homeland Security are interested in hearing future proposals that will assist in finding a solution for law enforcement agencies to perform forensic analysis on blockchain protocols. Moreover, the notice also makes reference to the creation of a blockchain application that has the capacity to analyze emerging cryptocurrencies.

Department of Homeland Security Makes Reference to Monero and Zcash.

Interestingly, the Department of Homeland Security state that although the “most well-known use case would likely be Bitcoin, prior endeavors have already addressed blockchain forensics regarding the world’s leading cryptocurrency. On the contrary, the agency are more concerned with the cryptocurrency industry in its wider context. In fact, the pre-solicitation makes direct reference to privacy coins such as Monero and Zcash.

Privacy Cryptocurrencies

Read: What are Privacy Coins?

Moreover, it was also noted that ongoing research in to a range of factors linked to the phenomenon of blockchain technology must continue, notably consensus mechanisms, security, privacy, internet of things (IOT) and encryption.

Throughout the notice, the Department of Homeland Security are generally positive towards the digital eco-system, adding that “these technologies stand to radically transform operations in government and the private sector”. However, the agency also noted the importance of blockchain analytics with respect to the successful enforcement of anti-money laundering and KYC (Know Your Customer) compliance.

Furthermore, although the Department of Homeland Security recognize that certain characteristics of cryptocurrencies, such as the levels of privacy and anonymity they offer users, it is crucial that law enforcement agencies are able to have a greater oversight of transactions to ensure illicit activity is detected.

It is important to note that whilst the pre-solicitation notice is seeking technical questions related to the subject matter, it is not yet looking for specific proposals from industry experts at this moment in time. It is believed this will be the next stage for the Department of Homeland Security.

U.S. Governmental Departments Continue Their Exploration with Blockchain

The recent pre-solicitation notice issued by the Department of Homeland Security follows on from recent interest from the Defense Advanced Research Projects Agency (DARPA). The agency are the organization responsible for providing the Department of Defense with research material and as such, are looking to create a workshop that centers on permissionless blockchain usage.

However, unlike the pre-solicitation notice issued by the Department of Homeland Security, which is primarily concerned with law enforcement investigatory measures, researchers at DARPA are interested in permissionless distributed consensus protocols. Researchers believe that three main pillars in particular require further exploration. This includes the ability to incentivize without utilizing traditional money, security models for distributed protocols and further analysis of centralization within the distributed consensus arena.

The DARPA blockchain workshop has been scheduled for February 14-15th and is set to be hosted in Arlington County, Virginia.

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Mayweather & DJ Khaled Slapped by the SEC in Centra ICO Scam

Two celebrity backers of the infamous Centra initial coin offering (ICO) – notably undefeated boxing legend Floyd Mayweather and DJ Khaled, have just agreed a settlement with the Securities and Exchange Commission (SEC). The agreement will see the two celebrities pay fines that collectively amount to more than $700,000. As a result, this should be a stark warning to high profile figures that agree to promote a crypto-related project that, insofar that the SEC are looking to clamp down on the phenomenon.

Mayweather Khaled SEC Fine

The Centra Saga – What Happened?

For those that do not recall the Centra ICO saga, let’s quickly recap. In late 2017, a project known as Centra Tech engaged in an ICO to help fund their cryptocurrency debit card service. The project claimed to have formed partnerships with both Visa and MasterCard, subsequently using this as a key marketing metric. It was also claimed that users could use the pre-paid debit cards to freely spend cryptocurrency holdings at any physical or online merchant that accepts Visa or MasterCard, as well as at ATM terminals.

Mayweather Khalid Centra

Read: Celebrities Shilling for Cryptocurrency: A Risky Investment

These claims, alongside public endorsement by both Floyd Mayweather and DJ Khaled, resulted in the ICO fund raising campaign collecting the cryptocurrency equivalent of more than $32 million.

Fast forward to April 2018 and the SEC – the hugely influential regulator of the U.S. financial services industry, closed the project down. The SEC reported that those behind the project – namely Robert Farkas and Sam Sharma, had promised investors an innovative technology that was based on nothing more than a “web of lies”.

With both Farkas and Sharma subsequently arrested by law enforcement, the SEC quickly turned its attention to the celebrity endorsers.

How Much Does it Cost to Get an A-List Celebrity to Promote an ICO?

In the case of Floyd Mayweather, who earned a reported $275 million in his recent bout with Conor McGregor, the boxer raked in $300,000 across three separate ICO campaigns, including that of Centra. One such task saw Mayweather Tweet “starts in a few hours. Get yours before they sell out, I got mine” [referring to the Centra ICO), to his almost 8 million Twitter followers.

In response, Mayweather agreed to pay the SEC a total of $614,775 – which broken-down, amounts to the $300,000 ICO-related payments he received, an additional $300,000 fine, plus interest.

Regarding DJ Khaled, it is believed the celebrity was paid $50,000 by the Centra team, as per the SEC. Khaled was personally ordered to settle a fine of more than $150,000, which included the $50,000 payment he received, plus a fine and interest.

Celebrity Backers on the Rise

This isn’t the first time that the SEC have flexed their muscles when it comes to celebrity cryptocurrency endorsements. Earlier in the year it was reported that John McAfee – the anti-virus pioneer turned cryptocurrency evangelist, charged a range of blockchain projects over $100,000 to Tweet public support to his 800,000+ Twitter fan base.

Once such example of McAfee’s paid-for public support was Verge (XVG), which resulted in an amplification of the project’s token, in direct correlation to the celebrity’s tweet. In response to pressure from the national regulator, McAfee later Tweeted that “Due to SEC threats”, he was no longer involving himself with ICO promotion.

We also reported last month that Lionel Messi – the global Soccer star that plays for Spanish La Liga team Barcelona, has associated himself with a blockchain project.

Although it remains to be seen how much the Finney mobile phone project, which claims to be the world’s first blockchain-based phone, have agreed to pay Messi, one would imagine that the sum is somewhat sizeable, especially when one considers the Soccer player’s global reach of more than 90 million Twitter followers.

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Bitcoin Used To Fund Terrorism: New York Woman Pleads Guilty

Bitcoin and other cryptocurrencies have often been cited as being a major conduit for money laundering and terrorist financing offences, not least because of the pseudonymity it affords its users. As a result, national regulators have taken notice of these underlying risks, subsequently laying pressure on third party exchange platforms that deal with fiat money to ensure they identify their customers. However, in a further blow to the digital currency’s legitimacy, a New York woman has plead guilty to using Bitcoin and other cryptocurrencies to fund terrorist activities.

The report, published by CNBC, concerns Zoobia Shahnaz, 27, of Brentwood in Long Island, New York. In total, it is believed that Shahnaz transferred more than $150,000 in illicit proceeds to global terror organization ISIS. The U.S. Attorney’s Office for the Eastern District of New York claim that the transactions were facilitated in 2017 and the end destination of the funds included Turkey, China and Pakistan.

Bitcoin Terrorism

Credit Card Fraud Turns in to Laundering of Cryptocurrency Funds

The story begun when Shahnaz, who was previously employed as a lab technician and was believed to in receipt of a $71,000 annual salary, defrauded a range of U.S. based financial institutions. The likes of American Express, Discovery and Chase Bank provided the criminal with six credit cards based on the information she provided in her application. It was also established that Shahnaz was able to fraudulently obtain a bank loan in the region of $22,500.

Shahnaz then proceeded to use the fraudulently -obtained cards, alongside a plethora of other credit cards that were registered in her own name, to purchase cryptocurrencies from third party exchange platforms. The prosecutor for the case stated that once the cryptocurrencies were purchased, they were then exchanged for U.S. dollars and subsequently, transferred back in to a bank account that Shahnaz controlled.

Once the funds arrived in Shahnaz’s domestic bank account, she then begun transferring the criminal proceeds to several overseas jurisdictions, ensuring that the value of each transfer was below reporting requirements. In the U.S., this amounts to $10,000.

Caught at JFK Airport

U.S. law enforcement agencies took an interest in Shahnaz when they discovered highly suspicious internet search activity. This included searches that related to the terrorist organisation ISIS. Searches centered on financiers and recruiters for the organization, as well as maps in high-risk areas along the Syria-Turkey border.

Law enforcement eventually stepped in when Shahnaz attempted to board a flight from New York to Pakistan, with the end destination set for Turkey. Authorities believe that the final leg of the trip was destined for nearby Syria – a somewhat hot spot for ISIS recruitment. When Shahnaz was intercepted at JFK Airport, she was found to be carrying $9,500 in cash – just $500 below the reporting requirement of $10,000.

KYC Controls can no Longer be Ignored

It remains to be seen what, if any, customer due diligence controls the unnamed cryptocurrency exchanges requested from the criminal. Whilst on a global basis legislation is still in its infancy, the U.S. expects all third party cryptocurrency exchanges that deal with fiat currency to identify its customers. KYC (Know Your Customer) practices most commonly require new customers to provide basic personal information, as well as an upload of government issued ID such as a passport or driving license.

Bitcoin Money Laundering

Read: Bitcoin and Money Laundering: Complete Guide to Worldwide Regulations

However, larger trading volumes, such as the amounts laundered by Shahnaz, require an enhanced level of customer due diligence, in-line with the inherent risks that the transaction may present. As a result, if the exchanges in question were U.S. based, then it is almost certain she would have been required to supply a range of personal information. Ultimately, if Shahnaz used credit cards that were not in her name, it also remains to be seen how she was able to initiate both a fiat deposit and withdrawal, unless fraudulent identification was supplied.

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Fake Trezor Wallets Flooding the Market Says Manufacturer

The official manufacturer behind leading cryptocurrency hardware wallet Trezor has announced that it believes criminals are using a new method to steal funds from unsuspecting victims. The post, released on Medium by Satoshi Labs, the company behind the Trezor brand, stated that they have been made aware that “one-to-one copies” of Trezor are circulating the market. As the post states, “In other words, a fake Trezor device, manufactured by a different, unknown vendor” has been discovered.

SatoshiLabs continue to add that whilst Trezor clones have been operating in the market for some time now, not only do they are utilize a different brand name, but they are also manufactured by legitimate organizations. As such, the process of distinguishing between a real Trezor and a clone is a simple one. However, a new breed of fake Trezor’s have been discovered.

Fake Trezor Wallets

Fake Trezor Devices That are Practically Identical to the Original

They are believed to be practically identical to the original product, much in the same way that counterfeit apparel products attempt to deceive loyal brand purchasers. Much like in the case of counterfeit apparel products, the unknown manufacturer is offering their fake Trezor at a price vastly lower that the original.

The Trezor team add that on top of a significantly lower price tag, it is also possible to ascertain whether you might have a fake device by looking at the product’s attached hologram. By uploading images and a video, the post allows users to check their hologram to ensure they have a legitimate product.  As the Trezor team have only recently been made aware of the illicit flood of fakes, it is yet to be acknowledged how many are currently circulating. The key concern for those affected is what capabilities the seller has regarding stored funds.

Fake Trezor Wallets

Back Route Re-Design may put Funds at Risk

Under normal circumstances, Trezor devices (along with other leading hardware devices) are the most secure way of protecting yourself against the threats of external malpractice. Even if the device was subsequently lost, or worse, stolen, then the thief would still have limited, if any access to the victim’s funds.

The key reason for this is that in order to facilitate a movement of funds out of the wallet, the user is required to enter a physical PIN number that was set by the owner of the device. Furthermore, each subsequently incorrect PIN combination activates the time-lock, meaning the user has to wait a certain amount of time before they can try again. Brute force would simply render the device redundant. During this time, the victim would have the ability to recover their funds remotely, by using their back-up passphrase.

Trezor vs. Ledger Review

Read: Trezor vs Ledger Review

However, if the aforementioned fake Trezor devices are as innovative as the physical design of the product, then there could be further complications. One such possibility is that the illicit manufacturer creates the device in such a manner that allows them to remotely access the user’s balance. This could be extremely costly, especially when one considers that hardware devices are generally used for larger cryptocurrency holdings.

Only Ever Buy a Hardware Wallet From a Licensed Channel

Nevertheless, this should be a stark reminder to those looking to get a cheap deal on hardware wallet devices. As echoed by the manufacturers themselves, you should only ever buy a Trezor device from an official channel. In most cases, this is either directly from the Trezor website or via an officially licensed third party, such as Amazon.

The Trezor product has grown significantly since its launch in 2014, selling over a million devices along the way. It remains to be seen whether the announcement will instill fear in future buyers.

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Leader of the Opposition in Nigeria Pledges Pro-Crypto Policies if Elected

Those involved in cryptocurrency and blockchain technology within the African nation of Nigeria have been promised new policies that embrace the phenomenon, should the country’s opposition leader get voted in. According to the report, Atiku Abubakar, who currently represents the People’s Democratic Party, is believed to be the main challenger to the current status quo.

Abubakar was quoted as saying he would install a legal framework surrounding blockchain assets that will allow the industry to prosper, which is something that many argue is not currently the case in Nigeria. Moreover, the opposition leader has also hinted at teaching the art of cryptocurrencies at an educational level, from primary school all the way up to university.

Nigeria Cryptocurrency

Pro-Crypto Policies may Require a Change of Power

National elections in Nigeria are set for February 2019, with more than 50 individual candidates looking to defeat the nation’s current leader, Muhammadu Buhari. However, it is widely believed that Abubakar has the best chance of success. The politician is a well-known figure throughout Nigeria and he has amassed considerable wealth through his business career. He currently controls a range of successful business linked to the food, agriculture, media and logistics sectors, as well as previously serving as vice president in the early 2000’s.

According to the official campaign document released by Abubakar, the opposition leader made specific reference to the blockchain space. This centres on an economy focused on knowledge, whereby Abubakar aims to encourage blockchain learning by making alterations to the national curriculum.

Many argue that the regime currently governing Nigeria have been somewhat hostile to cryptocurrencies and blockchain technology. For example, earlier this year, Godwin Emefiele, the governor of Nigeria’s Central Bank, compared the process of investing in cryptocurrencies to that of gambling. Emefiele also made it clear that the industry was in dire need for a regulatory framework.

However, it is also important to note that Central Banks have a tendency to empathize the speculative risks associated with cryptocurrencies and such, it would be more of a surprise to hear them embrace the technology.

Nigerian Residents Continue to Support Cryptocurrencies

Whilst a lack of regulatory clarity still remains within Nigeria, there can be no denying the appetite its people have for crypto-based products. According to a recent study by Citigroup, when utilizing a methodology that analyzes Bitcoin holdings as a percentage of GDP, then Nigerians hold the third largest supply behind Russia and New Zealand. The reason for this is potentially two-fold.

First and foremost, Nigeria hosts a significant market for international remittance, whereby locals rely on cross border payments from friends and family working overseas. In fact, it is estimated that this market in particular will be worth close to $46 billion by the end of 2022. The key problem for those receiving funds is that money service businesses (MSBs) often charge highly disproportionate fees, and transaction time-frames can also be slow. By instead utilizing Bitcoin, Nigerian residents are able to receive quick and cheap payments.

The second factor driving Bitcoin’s significant growth in Nigeria is related to the uncertainties of its national currency. The Nigerian Naira has lost close to 50% against the U.S. dollar since 2016, with regular devaluations continuing to hinder savers.

Startups Demand Regulatory Clarity

Whilst the future of cryptocurrencies and blockchain technology remains unclear in the African state, if the status quo remain in power, a continued period of uncertainty is likely. Earlier this month a group of Nigerian startups linked to the digital space called on the country’s Central Bank to provide regulatory clarity. The startups driving the regulatory request argue that the lack of a legal framework is driving innovation to neighboring countries such as Rwanda.

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Bitcoin vs The Dot Com Bubble: Are the Comparisons Necessary a Bad Thing?

With Bitcoin and its underlying blockchain protocol soon approaching its 10th anniversary, the phenomenon has had to fend off a range of accusations linked to its legitimacy. The likes of Warren Buffet, George Soros and Nobel Economist Robert Shiller, amongst many others, have all made a direct reference to Bitcoin resembling that of a bubble that is destined to burst. Moreover, such sceptics of the digital revolution argue that the technical red flags currently facing the industry have strong similarities to that of the infamous Dot Com bubble.

Whilst there can be no denying that these warning signs potentially exist, it is also argued that the cryptocurrency space is not set for redundancy per-say, more so that the industry is set for a major long-term re-shape. Essentially, it is important to note that whilst many Dot.com stocks are no longer here to tell their story, one only needs to look at the likes of Amazon, eBay and Priceline to understand that the technology stock crash at the turn of the century was not a demise in its entirety.

Bitcoin vs Dot Com Bubble

Therefore, in this article we aim to explore the potential comparisons between the exponential rise and fall of the cryptocurrency markets with that of the Dot.com bubble. We’ll start by taking a brief look at what the Dot.com bubble actually was, followed by an overview on those that eventually recovered to their previous all-time highs – and then some. Once this has been explored in detail, an attempt will then be made to ascertain whether there is any credence in the viewpoint that the cryptocurrency industry is set to go the same way.

What was the Dot.com Bubble?

First and foremost, it is highly relevant to briefly clarify what we mean by a bubble. In its economic form, a bubble is referred to as an asset, or a group of assets such as a particular sector like technology stocks, Gold or Bitcoin, that far exceeds its true intrinsic value. In most cases, a bubble is facilitated by widespread speculation, or as the cryptocurrency industry likes to say – FOMO (Fear of Missing Out). According to leading economist Hyman P. Minsky, the five fundamental steps to a bubble are as follows.

  • Displacement
  • Boom
  • Euphoria
  • Profit Taking
  • Panic

In the late 1990s and in-line with the very start of the age of digitization, a somewhat new breed of commerce braced the financial markets with its presence in the form of internet-based companies.

The idea behind the bubble was simple. Waves of newly created website stocks went public, with the vast majority of these companies being listed on the NASDAQ -the primary stock exchange for technology-based assets. With vast amounts of capital being injected in to website startups that had yet to turn a profit, investors were banking on the idea that long-term success was inevitable. As such, wide-spread speculation resulted in profit-less internet-based stocks reporting unprecedented growth in value.

To illustrate this uncanny investor appetite for a piece of the Dot.com bubble, in 1995, the NASDAQ index was worth just under 1,000 points. Just five years later at the peak of the bubble, this figure had increased five-fold to its then all-time of 5,132. What was to follow was an ultra-fast transition from “Buy, Buy, Buy” to that of a “Panic Sell, Panic Sell, Panic Sell”.

What has Happened Since?

If one were to analyze the long-term consequences of the Dot.com bubble, there are a number of ways to approach this. However, for the purpose of this article, we have decided use the NASDAQ market as a broad indicator. In a nutshell, whilst many technology stocks have failed to recover from the all-time highs that the bubble facilitated, or worse – are no longer around, many have since excelled. As per the illustration below, it took the wider NASDAQ index close to 15 years before it recovered from its peak in 2000. However, at the time of writing, the index has far exceeded this figure and currently stands at just under 7,000 points.

Nasdaq

Amazon is a highly fitting example of this long-term recovery. The online marketplace saw its stock price peak in late 1999 at just over $113. It wasn’t until October 2009 that it managed to surpass this value – a mere 10 years. Most importantly, at the time of writing, Amazon stocks are now worth more than $1,500, illustrating a post-bubble increase of more than 10 times.

Over at business software platform Oracle, its stock price peaked in late 2000 at a price of $46.47. The Dot.com bubble hit it hard, reaching lows of just $7.25 in the summer of 2002. However, the stock eventually regained its previous all-time in December 2014, totaling a recovery period of almost 14 years.

And then we had IBM, who in 1999 peaked at a value of $139.19, before entering a prolonged period of decline. However, not only did it manage to recover its previous high 9 years later in 2010, but it recorded new heights in March 2013, hitting $215.90.

The list goes on. Whether its eBay, Adobe, Priceline, San Disk or Oracle – although a significant amount of technology stocks went through a decade-long period of bearishness, many have since surpassed their Dot.com bubble heights.

Others weren’t so fortunate. Many website-based companies such as Pets.com, Geocities, Webvan, Boo.com and Kozmo, to name a few, are now nothing more than a distant memory. They failed to survive the bubble and ultimately, investors lost vast sums of money.

So how Does this Compare to Cryptocurrency?

If the Dot.com bubble taught us anything, it’s that eventually, speculation can only go so far. The rise and fall of the Dot.com bubble showed us that organizations with an underlying product or service that offered real-world value ultimately stood the test of time. As we can see from the illustration below, the total market capitalization of the cryptocurrency markets in its entirety has followed a similar path to that of the NASDAQ-led Dot.com bubble.

Cryptocurrency Market Cap

If one were to look at Bitcoin alone – the original and still the de-facto cryptocurrency of choice, then it is clear to see that the growth levels of 2017 were far from sustainable. Starting the year at $1,000, Bitcoin concluded the period with an all-time just shy of $20,000 – a percentage increase of 2,000%.

Since then, Bitcoin – alongside the rest of the cryptocurrency market, has struggled. At the time of writing, Bitcoin sits around the $4,300 mark, representing a decline of almost 80% since its all-time high in December 2017. This trend remains constant across the wider markets, which according to real-time pricing platform CoinMarketCap, now consists of more than 2,000 individual cryptocurrencies.

Will we Eventually see a Repeat of the Dot.com Revival for Leading Projects?

Ultimately, this beggars the question. Will the cryptocurrency market go the same way as the NASDAQ and its website-based stocks? If so, it is highly feasible that this will result in a major transformation, insofar that in the long-run, the markets may eventually separate the wheat from the chaff.

To elaborate on this viewpoint, if the likes of Bitcoin, Ethereum, Ripple and other leading projects are the Amazon, eBay and Priceline of the Dot.com bubble, then are the never-ending tokens of ICO projects set for a similar fate as Pets.com, Geocities and Webvan?

In reality, there can only be so many “Ethereum Killers” or “Revolutionary Cross-Border Tokens” before the markets eventually come to the determination that most blockchain assets may never see their previous highs again. However, on the contrary, it is also reasonable to suggest that, at least in the case of Bitcoin, some projects will ultimately stand the test of time.

If this is the case, then those currently in receipt of large cryptocurrency holdings must remember the fundamental action of patience. Those that were personally involved in the Dot.com bubble would have no doubt carried a similar sentiment to the cryptocurrency portfolio holders of today.

Yes, it is correct that had you purchased Bitcoin in late 2017 you are now staring at a net loss of close to 80%, much in the say way that holders of Amazon stocks did in the preceding years of 1999. However, whilst there are no guarantees that the financial side of blockchain assets will ever repeat its previous successes, nor which projects in particular will succeed if the industry is here to stay, what can be argued is that it is potentially too soon to know.

Key Takeaway – Bitcoin vs the Dot.com Bubble

The fundamental narrative of this article is to argue the point that whilst the technical red flags currently facing the cryptocurrency industry resemble that of NASDAQ and its subsequent Dot.com bubble, this doesn’t necessarily mean that the end is neigh.

It took the vast majority of surviving technology stocks an average of 15 years before they regained their previous all-time highs that the Dot.com bubble artificially facilitated. If this is the case for Bitcoin, are you prepared to wait?

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Government of Catalan Express Interest in Using Blockchain for E-Voting

The government of Catalan – a highly controversial region of North Eastern Spain, has just announced that it is considering utilizing the benefits of blockchain technology with respect to voting. La Vanguardia, the Spanish publication that originally broke the news, claim that if successful, it will allow Catalan citizens to partake in e-voting.

Catalan Blockchain Voting

This follows on from a preliminary bill that was passed in October by the Generalitat of Catalonia, which approved the exploration of an e-voting system that would allow Catalan residents located overseas to vote in major elections. Furthermore, it is also hoped that such a system will be fully operational by the end of 2020.

Peña-Lopez, a professor based at the Open University of Catalonia, claims that if the government does follow through on its utilization of blockchain technology, then it must be certain that the system is capable of guaranteeing trust. The professor continues to add that the Catalonia people must be convinced that a collaboration between e-voting and the blockchain protocol is a reliable proposal.

Catalan continues to ponder over the blockchain phenomenon

This isn’t the first time that Catalan has expressed its interest in blockchain technology, with the regional government claiming back in July of this year that the research and development process had begun. The government stated that it hoped the blockchain protocol could improve digital services available to the public, as well as improving the relationship between citizens, companies and the public administration.

Blockchain Voting

Read: Implementing Blockchain for Voting

The region of Catalan has been a somewhat controversial topic for some time now. In October 2017, the regional parliament of Catalan voted to declare independence from Spain in response to a controversial referendum.  The referendum, which saw 90% vote in favor of independence, was swiftly rejected by Spain, who claim that the vote was not legal. Moreover, Spanish parliament also made the point that just 43% of eligible Catalan voters actually took part in the referendum.

This dispute has been ongoing since at least 1922, which is when Catalan demands for independence first begun.

Nevertheless, the introduction of blockchain technology could work in the regions favor, not least because it offers the potential to operate in a more autonomous manner. Interestingly, various publications have reported that members of the Catalan regime have previously sought to use cryptocurrencies to fund their political agendas.

For example, El Confidential – a popular Spanish news agency, reported in October 2018 that the regions president, Carles Puigdemont, asked the Catalan public to donate funds in the form of cryptocurrencies. The reports adds that the president asked for cryptocurrency payments as a way of hiding financial support for the regime.

El Confidential claim that the donations – which specifically asked for Bitcoin, would primarily be used to provide logistical, legal and procedural support for individuals who have had to flee the Catalan region in fear of reprimand from the Spanish government.

Will we see an increase in small regions turning to blockchain technology?

Although Catalan is under the rule of Spain’s national government, it could be possible that the Catalan region will continue with their plans regardless of whether they receive regulatory approval. An excellent example of a small region utilizing cryptocurrencies is that of Kolionovo. The small Russian village based in the Moscow region first launched its own cryptocurrency back in April of last year. The suitably named Kolions tokens are used by residents of the village to ease the process of trade, especially in the region’s agriculture sector. As a result, paper money is now a rare breed in Kolionovo.

Ultimately, transitioning residents from traditional fiat-based money over to that of cryptocurrency tokens is arguably easier when the process is initiated from the grassroots up. Could we see more regions follow suit?

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Switzerland Granted Approval for Crypto Exchange Traded Products (ETPs)

Switzerland Cryptocurrency

Some potentially bullish news for the cryptocurrency industry has just surfaced, with Swiss regulatory authorities approving an application to facilitate crypto-based exchanged traded products (ETPs). The application, which was issued to Switzerland’s primary stock exchange in Zurich, SIX Swiss Exchange, will allow investors to speculate on a group of cryptocurrencies in a basket-like format.

For those unaware, an ETP is a financial derivative that includes products such as an Exchange Traded Fund (ETF).  In a nutshell, they act as a fully regulated financial security that allows investors to speculate on the underlying of an asset, or group of assets, without needing to actually hold the asset in question. Outside of the crypto space, ETPs and ETFs can be bought, sold and traded on practically any asset classes, such as Gold, stocks, currencies, oil, wheat, indices and more.

Switzerland Cryptocurrency

In the case of the aforementioned SIX Swiss Exchange application, the ETP will concern a basket of five cryptocurrencies. This includes Bitcoin, Ripple, Ethereum, Litecoin and Bitcoin Cash. As a result, investors will be able to invest in blockchain assets from a wider perspective, rather than limiting themselves to just one cryptocurrency, such as Bitcoin.

Such a derivative product is also highly beneficial to investors as it can often provide an avenue to mitigate risk. For example, if a particular cryptocurrency loses value, but the wider markets make gains, then it is hoped the underlying risks are reduced.

Will the ETP Approval Lead to a New injection of Institutional capital?

Much like ETPs in the real-world financial markets, the SIX Swiss Exchange ETP will be primarily reserved for large institutions and accredited investors. Regarding the latter, the U.S. class an accredited investor as somebody that has a net wealth surplus of $1 million, or earns a salary of $200,000 or more, for a period of at least two years. As a result, this particular financial product is potentially not suited for the more casual trader.

Interestingly, the Swiss ETP has been handed the ticker symbol “HODL”, which is a term widely used by crypto enthusiasts as a play on the word “HOLD”, referencing the act of refraining from panic selling when a particular coin turns bearish. As the HODL index will operate in a fully stringent and transparent marketplace, investors will be afforded a range of regulatory safeguards, as would be expected in the real-world markets.

This includes institutional-grade custodianship, a crucial factor for those investing significant amounts of capital. This acts as a guarantee to those parting with their funds, meaning that the underlying blockchain assets they are backing are free from the threats of malpractice, insofar that should the platform experience a hack, investors are covered in the form of insurance.

The Swiss ETP is Great, but the U.S. Based Bitcoin ETF will be the Golden |icket

Ultimately, some within the cryptocurrency community believe that the SIX Swiss Exchange ETP could potentially work in favor of the much anticipated Bitcoin ETF application in the U.S. The application, originally submitted by the Chicago Board Options Exchange (CBOE) in mid-2018, is still being reviewed by the Securities and Exchange Commission (SEC). Although all other Bitcoin ETFs have thus far been rejected by the SEC, many believe that the CBOE-backed proposal has a reasonably good chance of success.

Bitcoin ETF

Read: What is a Bitcoin ETF?

The main reason for this is that in December 2017, the CBOE were granted a license to operate the world’s first Bitcoin futures market. If the application is accepted, with a decision expected to be made in early 2019, then it is hoped that the blockchain industry will receive a much needed injection of capital at an institutional level.

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Leading Charity Oxfam Launches Blockchain-Based Rice Project

Oxfam Blockchain

If one of the fundamental factors driving the development of blockchain technology is to make the world a better, fairer and more transparent place, then leading charity Oxfam are keen to play their part. According to a recent publication in Cambodian newspaper The Khmer Times, Oxfam have just launched their very own blockchain project known as BlocRice.

The concept behind the project is to provide the agriculture sector in developing nations with greater levels of power when it comes to negotiating sales with buyers. Moreover, it is also hoped that through the use of cryptocurrency tokens, the underlying supply chain will increase its scope.

Oxfam Blockchain

Transparent Rice Project Begins in Cambodia

BlocRice has decided to launch its first project in the South Asian state of Cambodia – a country that relies heavily on the exportation of agriculture products such as rice. In fact, in 2016 alone, the agriculture sector contributed more than 26.7 percent towards Cambodia’s GDP, subsequently resulting in the exportation of more than 542,000 tons of rice.

The project was first rolled out in April 2017 as part of an initial pilot test, with the view of attempting to ascertain whether blockchain technology could ensure farmers sell their goods at a fair price. According to Solinn Lim,  director at Oxfam Cambodia, agricultural stakeholders will be required to engage with the blockchain-based contract, which if successful, will give farmers far more bargaining power than they are currently accustomed to.

Furthermore, by utilizing the autonomous and immutable characteristics of smart contract technology, the project will bridge the gap between farmers, exporters and ultimately, purchasers of the rice that are based in the Netherlands.

First World Nations also Play their Part

One such organization within the Netherlands that has already agreed to implement the technology is SanoRice, who primarily use Cambodian-based rice for the manufacturing of crackers. As a result, the entire end-to-end supply chain process can be tracked and management within the transparent blockchain protocol.

On top of ensuring farmers from within developing nations receive a fair price on the goods they export, the BlocRice project also aims to introduce cashless payments. In collaboration with Acleda bank, the project will assist farmers in their attempt to reach banking services – something than many rural Cambodian regions are currently unable to access.

Ultimately, if the process is labeled a success, it is hoped that BlocRice will be expanded not only to other developing nations, but across other agricultural products.

Global Organizations Showing that Blockchain Technology can Benefit Society

This isn’t the first time that a global organization has utilized the benefits of cryptocurrencies and blockchain technology with the view of making the world a better place. Earlier this month we reported how Leading U.S. manufacturer SC Johnson – who primarily create goods linked to household cleaning products, are currently in the early stages of introducing blockchain technology to Indonesia.

Cryptocurrency Ocean Pollution

The idea behind the project is to create an incentivization program that rewards locals for recycling their plastic waste. At present, Indonesia, along with other nations in the Asian region such as China, Vietnam, Thailand and the Philippines, are responsible for more than 55% of the world’s plastic waste that is subsequently dumped in the ocean.

By creating an incentivization system, those that choose to recycle are rewarded in the form of tokenization, which it is hoped can then be used to purchase goods and services.

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$68 Million Japanese-Based Bitcoin Ponzi Scheme Results in 8 Arrests

Bitcoin Ponzi Scheme

The crypto-friendly nation of Japan has once again hit the news for all the wrong reasons, with reports suggesting that 8 individuals have been arrested for their involvement in a high-value Ponzi scheme. The report, which was published by Japanese main-stream news outlet Asahi Shimbun, suggests that the scam amounted to more than $68 million in Bitcoin investments.

It is alleged that the Ponzi scheme was brought forward by a fictitious organization known as “Sener”, who duped the victims in to believing they were a fully-fledged U.S. investment company. Through a variety of publicly held seminars, those linked to Sener proposed that by backing their crypto-based project, investors would be guaranteed monthly returns of between 3 and 20 percent. Furthermore, it has also been alleged that the suspects promised additional monthly returns for those that were able to bring new investors on board – a well-known strategy for Ponzi schemes.

Bitcoin Ponzi Scheme

This was the same strategy employed by the now-defunct BitConnect, who infamously promised investors huge returns that surpassed 40% a month. Much like in the case of Sener, none of these returns ever materialized.

More than 6,000 Victims Fooled

As with all Ponzi crimes, the ultimate objective is to recruit as many unsuspecting investors as possible. In the case of Sener, it is claimed that the criminals managed to convince more than 6,000 individuals to part with their money. However, unlike conventional Ponzi scams of times gone by, Sener requested that all investments should be made in Bitcoin. The result? More than $68 million was raised across the 6,000 victims.

Japan is well-known for its friendly stance on cryptocurrencies and blockchain technology, not least because it became the first nation in the world to regulate Bitcoin in the same way it does its traditional financial services industry. On top of hosting more than 200,000 real-world vendors that now accept Bitcoin as a medium of exchange, Japan also has one of the largest volumes for daily cryptocurrency trading activity.

However, when it comes to investment structures, Japanese legislation is stuck in a somewhat “Grey Zone”. The reason for this is that although Bitcoin and other cryptocurrencies are regarded as “currencies”, Japanese regulators do not view them within the name remit as “securities”. In a nutshell, securities refer to a financial instrument that affords investors with a range of perks, such as equity and dividends. It is therefore believed that those involved in the aforementioned Sener scam abused this grey area by accepting Bitcoin, and only Bitcoin, in return for a piece of their Ponzi scheme.

Japan has Been Hit Hard by Cryptocurrency Scams

There can be no denying that the Japanese government are happy to embrace blockchain assets, however this hasn’t happened by chance. It is widely believed that Japan installed a full regulatory framework in direct response to the collapse of M.T. Gox. For those unaware, at one point in time, Japan-based M.T. Gox were responsible for over 70% of all Bitcoin transactional activity and were one of the few platforms that could facilitate fiat-to-BTC trading. However, in 2014, the exchange had to close its doors as it claimed more than 740,000 of its Bitcoins had been stolen by hackers.

Nevertheless, Japan’s stringent legislative framework towards cryptocurrencies has not deterred hackers from targeting the country. For example, in January 2018 it was reported that Coincheck, a cryptocurrency exchange based in Japan, had more than $500 million worth of tokens stolen from their company wallets. Fast forward to September of the same year, and another cryptocurrency exchange, Zaif, also suffered an external hack. It was reported that the Zaid theft was worth close to $60 million.

If large-scale crypto-based scandals continue to occur in the country, Japanese authorities may have to revisit their stance on the blockchain phenomenon.

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Russian Malware Infecting Computing Systems to Mine Cryptocurrencies

Cryptojacking

Are you experiencing a somewhat slow, loud and warm computer of late? If so, you might have had your computer infected by a new crypto scam that is believed to have originated in Russia. According to the report, a Russian-built malware program that has the potential to steal your computational power is doing the rounds.

The malware has been specifically built to mine ZCash or Monero, without the user becoming aware of the installation. The malware is believed to be so advanced that is has the ability to determine the most efficient and profitable mining program, based on the specific configuration of the infected computer.

Cryptojacking

For example, whilst the Claymore ZCash miner is being infected on Windows x64 systems, Cryptonight is being installed on x86 systems.

The research team at McAfee labs, an offshoot of the hugely popular anti-virus software organization founded by John McAfee, believe that the infection is being facilitated via a suspicious Microsoft installation program.

Researchers at McAfee labs argue that the dark side of cryptocurrency scams will only continue to grow in size. They suggest that an increase in the value of cryptocurrencies will only spurn criminals on further, adding that mining-related malware programs will ultimately become more and more sophisticated.

Although this particular piece of malware is believed to have originated in Russia, the report indicates that those residing in the U.S., South Africa and Brazil have been hit the hardest.

Remote Mining Scams are Being Favored by Criminals

One of the key factors motivating criminals to employ advanced remote mining malware is that the act carries little risk. First and foremost, criminals are able to remain largely anonymous, as malware can be infected on to a user’s machine with minimal risk. Moreover, the underlying anonymous nature of cryptocurrencies, especially regarding privacy coins such as ZCash and Monero, afford criminals an even greater shield of protection.

Privacy Cryptocurrencies

Read: What are Privacy Coins?

Just last month, it was reported that CoinHive – a browser-based cryptocurrency mining extension, is raking in close to $250,000 a month. However, it is also believed that vast amounts are being raked in by criminals that remotely install the extension on to unsuspecting computers.

The CoinHive concept involves using a small portion of computation power, allowing users to mine Monero in the background, whilst navigating through the web.

One such avenue that criminals have taken to abuse the CoinHive model is to register malicious domains that resemble popular websites such as Facebook and Twitter. Regarding the latter, a user registered the domain “Twitter.com.com” and subsequently installed the CoinHive JS library within the page’s code. Anyone who mistakenly visited the aforementioned domain will have instantly noticed it wasn’t the official Twitter homepage, however the visit is enough for the malware to begin mining Monero for the site’s owner.

Cryptocurrency Mining Scams get Smarter

On top of domain registration ploy, hackers are also targeting victims via malicious ads. The scam works by displaying an ad that advises the user that their computer is at risk of infection, subsequently directing them to a fake tech support page. Those that fall victim to the scam would then have the CoinHive extension remotely installed in to their browser, consequently allowing the criminals to mine Monero without the user knowing.

Due to the underlying nature of malicious malware, it is often a somewhat difficult task for users to know that they have been affected by the scam. In most cases, the performance of the user’s computer is a good indication on whether a mining program is secretly running in the background. This generally includes a slow machine that sounds louder than usual. You may also notice that your computer is constantly overheating.

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School Employees in China Caught Stealing Electricity to Mine Ethereum

Ethereum Mining

It is often said that the best things in life are free, however using your employer’s electricity supply to mine cryptocurrencies is never a good idea. According to Chinese publication HK01, a teacher at a School in Chenzhou, China, has been caught using the institutions electricity for their ethereum mining operations.

The story begun when the culprit – school Principle, Lei Hua, purchased 10,000 Yuan worth of mining equipment. Upon recognizing the vast levels of energy that mining requires, Hua proceeded to shift his mining rig over to one of the school’s internal dormitories. Once the profits begun to roll in, Hua then spent a further 40,000 Yuan on additional rigs, with the view of increasing his earning potential. However, with the dormitory room unable to facilitate a mining rig of that magnitude, Hua decided to move his operations to the school’s main building.

Ethereum Mining

Although the electricity theft was able to go unnoticed for a plethora of months, other staff members begun to notice that the internal computing systems were running somewhat slow. Moreover, the report also claims that staff members complained that their computers were generating a significant amount of noise – something that is often the case with cryptocurrency mining.

As one would expect, once the individual was subsequently caught, the school swiftly relived Hua of his academic duties. Although it was believed that the school’s Vice Principle – Wang Zhipeng, was also involved in the operation, he was able to keep with position, albeit with an official warning.

This isn’t the first time that allegations of electricity theft for the purpose of cryptocurrency mining has surfaced.

Public officials, cryptocurrency mining and electricity theft

In early 2017, it was reported that Nicholas Berthaume, an employee at the Federal Reserve, was alleged to have been using the organization’s servers to mine Bitcoin. The brazen individual is believed to have run his mining operation from within the Central Bank between 2012 and 2014. Although the employee was subsequently fined $5,000 and sentenced to a year of probation, two years’ worth of Bitcoin mining during a period where competition was minute would have potentially netted the individual a significant sum – at least in today’s money.

Then in 2014, it was reported that a computer systems manager from within New York’s Department of Education was caught red-handed in his effort to mine Bitcoin. It was alleged that Vladimir Ilyayex – the miner in question, installed a mining software client that was set to run between 6pm and 6am. Ilyayex subsequently admitted that he monitored the mining program remotely from home. The individual not only lost his job, but also received a small fine of just over $600.

More recently, Matthew McDermott, an information manager at Florida’s Department of Citrus, was arrested for official misconduct and grand theft. Not only did the employee discretely install mining software on the department’s computers, but he also used his state credit card to buy GPU units worth more than $22,000. An internal investigation begun when the department noticed their electricity bills had increased by more than 40 percent.

Crypto-related electricity theft goes global

And finally, ABC News reported in March 2018 that two IT employees from within Australia’s Bureau of Meteorology were using the organizations ultra-powerful computing systems to mine cryptocurrencies. It remains to be seen what punishment the two unnamed individuals were accustomed to, however it was enough to warrant the attention of the Australian Federal Police. Ironically, the aforementioned Bureau were involved in an additional crypto-related scam just one month prior, as their website unwittingly displayed advertisements regarding a fraudulent Bitcoin investment scheme.

Ultimately, this should act as a lesson to all of us. If you notice your electricity consumption is going through the roof, somebody might be using your computing systems to mine cryptocurrencies!

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Will Re-Ignited U.S. Sanctions on Iran Drive the Country to Cryptocurrency?

Iran Cryptocurrency

For a technological innovation that ceased to exist a decade ago, the relationship between geo-political events and cryptocurrencies is somewhat uncanny. Whether it’s Venezuela and their controversial Petro Coin, the Marshall Islands installing a legislative framework for the issuance of their own digital tender or the North Korean regime utilizing blockchain technology to fraudulently raise capital – more and more nations are in some way looking at the digital phenomenon to move away from the traditional monetary system.

Next in line – as per a recent guidance notice issued by FinCen – the U.S. based enforcement agency responsible for financial intelligence, could be Iran. In response to Donald Trump’s decision to re-distribute international sanctions on the nation, the report believes that the Iranian government may attempt to use cryptocurrencies as a means to circumvent the embargo.

Iran Cryptocurrency

Within the notice, the financial intelligence unit advise third party cryptocurrency exchanges to take caution with Iran’s potential attempt to exploit the international financial markets, including that of the cryptocurrency markets.

In a rather strong approach, FinCen allege that if U.S. based exchanges fail to thoroughly review transactions that are potentially linked to Iran, then it could assist the regime in their quest to generate revenues that support a range of unsavoury actions. This includes human right abuses, the development of an ongoing missile program and funding terrorist organizations.

Iran and cryptocurrencies

FinCen first made reference to Iran’s involvement in cryptocurrencies back in 2013 and estimates that the nation facilitates Bitcoin transactions to the value of just under $4 million per year. Although the agency recognize that this figure is minute in comparison to other jurisdictions, they are still concerned, insofar that the funds have the potential to end up in the wrong hands. However, as is often the case in an industry that affords users with a certain level of anonymity, the amounts could potentially be much larger.

On top of the nation’s actual usage, Iran have also discussed the potentiality of issuing their own digital currency which will be supported by HyperLedger Fabric technology. Interestingly, although the jurisdiction’s central bank have since prohibited its citizens from purchasing, selling or trading blockchain assets, the central bank have the green light to issue their own digital currencies at will.

What is Hyperledger

Read: What is Hyperledger?

Trump playing hardball with Iran

The re-visiting of U.S. sanctions on Iran has been somewhat controversial across the international community. Whilst the Trump regime officially withdrew the U.S. from the hallmark nuclear agreement that in 2015, re-instated Iran’s ability to access the global payments system and most importantly, access U.S. dollar denominated markets – various other nations have publicly stated that they will continue to recognize the agreement. Specifically, Germany, France and the UK in particular will continue to honor the agreement, in defiance of Trump.

There is an ongoing fear that the sanctions will motivate Iran to seek alternative financial markets in order to protect their national interests. This mainly centres on the exportation of oil, which is somewhat difficult when the industry is mainly dominated by the Petro Dollar. If this is the case, then many believe that Iran may follow the activities of North Korea, which are alleged to utilize cryptocurrencies and blockchain technology in an attempt to generate income for the rogue state.

For example, it was reported in September 2018 that North Korea were using various third party cryptocurrency exchanges to not only launder money, but to evade international sanctions. Ex-NSA cybersecurity expert Priscilla Moriuchi estimates that the program is earning North Korea as much as $200 million annually – no small amount for a nation that struggles to feed its own people.

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Bank of Israel Warns Against the Digitization of its National Currency

Bank of Israel

Whilst the digitization of a nation’s cryptocurrency is hot on the lips of a plethora of jurisdictions, the Central Bank of Israel believes the move would not be conducive for its domestic Shekel. In a report released yesterday, the Bank of Israel claim that the issuance of a “Digital Shekel” on a 1:1 basis against its national currency would be somewhat unfeasible and as such, has stipulated that the project should not proceed.

Reports of an examination in to the potential advantages and disadvantages of issuing a native cryptocurrency were first brought to light in late 2017. The evaluation employed the services of Dr. Karnit Flug, who initially suggested that the implementation of a Digital Shekel could lead to a faster and more streamlined payments system, as well as a way to reduce the threats of tax evasion and the wider black market.

Bank of Israel

Potential benefits do not outweigh the risks

However, the recently released report indicates that the Central Bank recommends avoiding a digital issuance in the near future, to allow the evaluation process to continue. The report also makes the point that although there are numerous jurisdictions currently exploring the potential benefits of issuing a digital cryptocurrency, no countries with an “advanced economy” are yet to proceed with the project.

This is especially true when one considers the current state of play. Venezuela is one such nation that has recently issued its own digital currency. Dubbed the “Petro Coin”, the project was initially claimed to be backed in full by the nation’s significant oil reserves. Moreover, Venezuela’s leader – Nicolás Maduro, also claims that the Petro’s respective ICO raised more than $5 billion. If true, it would make it the most successful ICO of all time, at least in terms of the amount raised. However, not only are the ICO claims unverifiable, but the Petro will now be backed by 50% oil, with the remainder made up of Gold, Iron and Diamonds.

Venezuela Petro Coin

On the other hand, the Central Bank of Israel do recognize the potentials of the technology. For example, the report states that in the event of reduced cash usage, as has been seen in nations such as Sweden, the utilization of a digital currency would be highly beneficial. Moreover, it has also recognized that the technology could create a more efficient monetary tool. However, the report makes it clear that the potential benefits do not outweigh the foreseen risks.

The trend of digitizing a national currency

Whilst the infamous case of Venezuela and its Petro Coin are somewhat well known, a range of other jurisdictions are also considering a similar move. For example, the Marshall Islands, a small island nation situated in the Northern Pacific Ocean, recently enacted a piece of legislation that would lead it to become one of the world’s first to issue a government-backed digital currency that resembles legal tender. The initial proposal would allow residents to pay for goods and services alongside the U.S. dollar, which is officially the nation’s currency of choice. However, as reported yesterday, current president of the Marshall Islands – Hilda Heine, has faced a vote of no confidence from the jurisdiction’s eight senators, based on the plans to issue a digital currency.

Then over in Germany, its Central Bank, alongside its Ministry of Finance, announced in July that is would be too risky to implement a digital currency of its own, subsequently rejecting the idea in its entirety.

Ultimately, although a range of countries and their domestic Central Banks are toying with the idea of a digital issuance, it might be some time before we see any tangible efforts to proceed – especially from within leading economies.

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Bitcoin Cash Impending Hard Fork Sparks Price Rise

Bitcoin Cash Hard Fork

The cryptocurrency markets love a good hard fork, and the trend looks set to continue with Bitcoin Cash experiencing gains of just over 37% over the course of weekend. Towards the close of Friday, BCH was hovering around the $426 mark, accelerating up to approximately $586 by the end of the Sunday, as per data retrieved from CoinMarketCap.

Not only this, but BCH trading volumes have also encountered a recent spike. Bitcoin Cash increased its average daily volumes from $200 million up to around $1.4 billion last week, which subsequently assisted in the rise in value.

Bitcoin Cash Hard Fork

The markets generally respond well to an impending blockchain fork, which has become evident over the past few days. The reason for this is that hard forks most commonly result in free tokens for those holding the respective cryptocurrency at the time of the fork – much in the same way that Bitcoin holders received equivalent BCH tokens when Bitcoin Cash went live last year.

With the hard fork planned for November 15th, we could be set for some further volatility.

What is the Bitcoin Cash fork?

When Bitcoin Cash originally forked from the original Bitcoin client, the cryptocurrency community were split in opinion. Whilst some sections of the community felt that the fork was crucial to alleviate ever-increasing fees on the Bitcoin blockchain, many disagreed. Nevertheless, the core developers at Bitcoin Cash have decided to implement a new forking strategy, which will repeat itself every six months.

It is widely believed that the proposed changes are being driven by Bitcoin ABC – an influential Bitcoin Cash Client. Within the proposal, it is argued that a regular fork will facilitate a range of benefits, notably the ability to perform cross-chain atomic contracts and the use of oracles. Moreover, it is hoped that the fork will significantly improve scalability performance levels on the Bitcoin Cash blockchain, along with the ability to resolve minor technical problems.

However, as with any proposed blockchain hard fork, it must receive support from the wider community. In response, NChain – an alternative Bitcoin Cash group led by Craig Wright, opposes the changes in their entirety. By refusing to run the planned upgrade, there will effectively be two independent chains on November 15th. Nevertheless, the fork has in fact received support from some key crypto organizations.

Bitcoin Cash fork receives support from heavyweight exchanges

Just last week, major cryptocurrency exchange Binance – who often experience daily trading volumes surpassing the $2 billion mark, announced that they would be supporting the upcoming Bitcoin Cash hard fork. According to the Binance post, all deposits and withdrawals of Bitcoin Cash will be suspended for the 1-2 hours prior to the official fork launch.

Then we had major cryptocurrency broker Coinbase, a platform believed to have in the region of 13 million account holders, who have also expressed their support for the fork. Much like Binance, Coinbase, alongside their Coinbase Pro trading arm, will also temporarily suspend BCH deposits and withdrawals, in order to prepare for the launch.

Ultimately, whichever way the forks pans out, it is highly probable that the recent surge in the value of BCH was a direct result of the aforementioned public backing from both Coinbase and Binance.

Outside of the trading section of the industry, hugely popular hardware wallet manufacturer Ledger – are happy to sit on the fence at this moment in time. The French-based start-up revealed that they would support the most dominant chain, with direct reference to the chain that facilitates the greatest amount of hashing power.

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Is Nevada To Become The Next Crypto Utopia? $170 Million Investment Planned

Nevada Crypto

Elon Musk. Jeff Bezos. Richard Branson. These names have become synonymous with cutting-edge technological pioneering and the outrageous ideas that go along with them. New and exciting concepts that are shaping the lives of society as a whole. However, an emerging name that has come out of the woodwork in recent months that is equally worth paying attention to is Jeffrey Berns.

Former lawyer turned cryptocurrency investor, Berns has envisioned a kind of technotopia of sorts that we have only ever contemplated in science fiction. A multi-million dollar personal investment that he is confident will see unprecedented prosperity for a planned technological community in the heartland of America; Nevada.

Nevada Crypto

A rendering of what this blockchain-based community might become. Image from NYTimes.

Just earlier this year, Berns’ cryptocurrency company – Blockchains LLC, bought a piece of land in Nevada which has been valued at a staggering $170 million dollars, with plans of further expansion and investment well in hand. At last count, Berns is believed to have already invested a total of $300 million on land, offices, planning and the 70 employees currently under contract. No small sum when you consider that it is being banked on a technology this is just under a decade old.

A Democracy, by Technology

So what’s the end game? Berns believes that the inherent privacy, security and efficiency that blockchain technology offers will be the defining factor in crafting a community that is entirely self-sustainable and self-governing. During his days working as a lawyer arguing cases against financial companies, Jeffrey Berns was introduced to the concept of cryptocurrency and its commercial pioneer, Bitcoin.

Quite taken by the potentialities of the technology he diverted himself to exploring the crypto market, later discovering Ethereum and came to feel it was decidedly the currency to back.

With its smart contracts, airtight security, self-checking mechanisms, and high transaction speed, Berns has envisioned a community that will no longer be subject to the inefficiencies of traditional banking and corporate institutions. He sold his Ethereum holdings during the crypto-craze of late 2017, and plans to use the technology that made him rich to see others thrive.

The crypto millionaire, who is funding the entire project himself, envisions the far reaching benefits that blockchain technology can have on the energy industry. In a recent agreement with one of Nevada’s leading energy companies, NV Energy, Berns announced a Memorandum of Understanding (MoU) had been reached in which NV Energy has agreed to test and incorporate blockchain in the running of energy transaction.

Being paid on time, never having to worry about banks losing your money, buying, selling and sharing energy on an equally distributed ledger system, these are samples of some of the lifestyle options that Berns’ crypto utopia hopes to offer.

Innovation Park

The large investment move has been well received by officials in the state who are eager for the region to see healthy economic development as a result of the project. The concept has even been given an unofficial name by one Nevada governor who has touted it as the “Innovation Park” of Nevada. 8 year colleague and friend of Berns, Joanna Rordriguez, voiced her personal confidence in Berns to the New York Times saying that Berns always achieves what he sets his mind to.

Puerto Rico Crypto

Read: Puerto Rico Sol: Cryptocurrency Utopia or Pipe Dream?

Interestingly, this isn’t the first instance of a billionaire putting his faith in blockchain technology for community building purposes. Former childhood star Brock Pierce has voiced his own plans to liberate Puerto Rico from its many international debts using the democratizing power of blockchain technology. Although the project has received criticism from certain Puerto Rico communities, it is hoped that the utilization of blockchain technology will enable the jurisdiction to re-build following the horrid events of Hurricane Katrina.

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Student Cryptocurrency Trader Turns Huge Profits in to a $400k Tax Bill

Crypto Tax Bill

A Californian student, who turned a $5,000 investment in to a portfolio worth close to $1 million, has just been hit with a staggering tax liability for more than $400,000. And what better place to seek legal advice that social media platform Reddit?

The unnamed student, who goes under the suitably named Reddit handle “u/throwaway283921”, claims to have begun his trading in May 2018, whereby he signed up at popular cryptocurrency broker Coinbase. Moving forward, the student then purchased a range of alt-coins, which he states increased in value by more than 10x. By the end of December 2017, at a time when the cryptocurrency industry experienced a significant injection of capital that resulted in Bitcoin reaching its all-time high of $20,000, the student claims that his portfolio was worth just over $800,000. Not bad for a $5,000 investment just six months prior.

Crypto Tax Bill

However, like many others during the crypto-craze of late 2017, the student trader failed to cash out, instead believing that the markets could only continue to rise. The unknown individual states that he was close to cashing out when the portfolio breached the $1 million mark, however once again he proceeded to let his investments ride. When the 2018 bear market begun – which saw some cryptocurrencies lose up to 90% from their all-time high, the trader’s portfolio quickly turned southwards.

A Tricky Situation

The student now claims to have a total portfolio value of $125,000, which many would argue is still a serious return on a 6 month investment of just $5,000. However, as per U.S. taxation laws regarding cryptocurrency profits, the trader has been hit with a bill based on his 2017 gains. The result? A 1099-K bill for a remarkable $400,000 in taxation liabilities.

Although the student claims to have only traded crypto-to-crypto and is yet to perform a cash-out to fiat currency, taxation is still a requirement.

According to the Reddit post, whereby the student asks his fellow peers for advice on how to proceed, the trader is currently working as a Retail Associate for Barnes and Noble, for a reported $12/hour. As one can imagine, his Reddit counterparts suggested that the trader consults with a qualified tax agent that will be able to assist in the matter.

A Slightly Grey Area

Taxation within the cryptocurrency industry is a somewhat grey area, especially when one considers the borderless nature of the blockchain phenomenon. Nevertheless, the U.S. in particular are very clear on their stance. In a nutshell, the U.S. views cryptocurrency assets in the same manner as property, which includes the likes of stocks, shares, Gold and real estate. The exchange of one cryptocurrency token to another is subsequently a taxable event, based on the value of the underlying asset at the time of the trade. When it comes to the liability itself, the costs are tallied up over the course of the year, based on all of your gains and losses, as well as any underlying costs.

Bitcoin Tax

Read: Bitcoin, Cryptocurrency and Taxes: What You Need to Know

The key problem here is that accounting for the aforementioned information is not any easy feat. Those that conduct multiple trades on a daily basis are faced with the difficult task of attempting to ascertain the profit or loss of each and every trade, in a market where prices fluctuate on a second-by-second basis.

It is widely believed that According to Tom Lee, a cryptocurrency analyst working at research firm Fundstrat Global Advisors, an estimated $25 billion in cryptocurrency-related tax liabilities were outstanding back in April of this year. Interestingly, according to a Twitter poll conducted by Bitcoinist in the same month, 52% of respondents claimed that they had no intention of paying any tax bills linked to their cryptocurrency holdings.

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Australia Post’s Digital ID Allows Cryptocurrency Exchanges to Fast-Track KYC Verification

Australia DigitalID

Know-Your-Customer (KYC) and Anti-Money Laundering (AML) obligations within the cryptocurrency and blockchain technology industry is something that exchanges can no longer ignore, especially if the platform in question has a gateway that facilitates fiat currency. With a lack of infrastructure in place to stream-line the process, verifying a user’s identity can be a somewhat slow and inefficient procedure.

Recognizing the need to fast-track this process, Australia Post, the country’s national postage company, have recently launched a new product that will allow cryptocurrency exchanges to complete KYC validation within just a few minutes.

Australia DigitalID

Known as “Digital iD”, the service will alleviate the need for customers to wait days on end before they are able to access their newly created account. Under current AML regulations in Australia, cryptocurrency exchanges are required to identify the customers that use their platform. This will most commonly consist of a Government issued ID (such as a passport or driving license) and in some cases, a proof of address (such as a bank statement).

Fast-Tracking access to the cryptocurrency markets

The concept involves Australian citizens undergoing a one-time registration process with Digital iD, which once confirmed, allows users to confirm their identity with a click of button. Although this will initially see the user upload a range of documentation with Digital iD, once the process is complete they will be able to verify their identify with any merchant that accepts the technology.

Not only does this benefit the cryptocurrency exchange platforms themselves, insofar that there is no longer a need to install hugely expensive KYC departments, but it will also reduce the underlying security risks for the user. The reason for this is that there is no need to continuously distribute sensitive documents online. If falling in to the wrong hands, it would potentially allow a bad actor to perform identity fraud.

Digital ID

An additional option that Digital iD users have is that they can decide how much of their personal information they want to share with a particular merchant. For example, if a vendor only requires confirmation that the customer is above the age of 18, the Digital iD user can opt to simply share their name and date of birth, rather than needlessly sharing their driving license and proof of address.

This could also be useful in the event that a cryptocurrency exchange requires enhanced customer due diligence on a user, which typically arises when larger volumes are transacted, or a particular withdrawal request surpasses a certain amount.

Partnerships in the making

The Digital iD team have already formed a notable partnership with Australian cryptocurrency exchange Digital Surge. The platform not only allows users to buy, sell and trade a range of cryptocurrencies, but they also offer users the opportunity to pay Australian utility bills via Bitcoin. On top of the Digital Surge partnership, Digital iD are also close to securing a deal with two additional Australian-based cryptocurrency exchanges, notably Coin Loft and Coinjar.

With the barriers of KYC and AML obligations significantly eased, the Digital iD concept could bring a new wave of interested parties in to the cryptocurrency industry. For one, some sectors of society simply do not feel comfortable uploading personal documentation to a platform with very little trading history, especially in an industry that is often a victim of external hacks. However, with the backing of Australian Post, an organization with an established reputation that dates back more than 200 years, the aforementioned reluctance may no longer be an issue.

The Digital iD application is available to download for free via the Google Play or Apple iTunes store.

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Venezuela’s Highly Controversial Government-Backed Petro Coin Has Officially Launched

Venezuela Petro Coin

When rumours surface of a national government planning to issue a state-backed cryptocurrency, it often excites the blockchain community, not least because it gives the digital phenomenon an element of legitimacy.

However, in the case of Venezuela – a nation that the International Monetary Fund expects to hit hyper-inflation levels of more than 1 million percent by the end of this year, sentiment is slightly less positive. Nevertheless, it has just been reported by the Venezuelan Economy Department that the highly controversial Petro is now freely available to buy, sell and trade at six authorized exchanges.

Venezuela Petro Coin

The platforms “Authorized” to sell the Petro

The exchanges in question are:

  • Afx Trade
  • Bancar
  • Cryptia
  • Criptolago
  • Amberes Coin
  • Cave Blockchain

At the time of writing, none of the above platforms are listed within the top 100 exchanges for trading volume, as per data retrieved from CoinMarketCap.

Alternatively, the Petro can also be purchased directly from the official state-backed treasury platform.

There appears to be an element of confusion as to which trading pairs to Petro can be exchanged against. Whilst the official Petro Twitter account states that the likes of BTC, LTC, ETH and even DASH can be used to obtain it, the National Cryptocurrency Associated claims that just BTC and LTC pairings are available.

Interestingly, if opting to purchase the Petro from official state channels, then it has been reported that users can make a purchase using major fiat currency pairings such as the Euro, Yuan and apparently – the U.S. Dollar. It remains to be seen how stringent the legal framework is with regards to the facilitation of Petro transactions in Dollars, especially when considers the ongoing U.S.-led sanction embargo, as well as a warning from the U.S. Treasury Department for its citizens to stay away from the project.

What is the Petro?

The Petro is a state-backed cryptocurrency that was introduced by current Venezuelan leader Nicolás Maduro. The idea behind the project was to stabilized the national economy, by tying it to the virtually worth-less Bolivar. The program has been very controversial for a number of reasons.

Firstly, government sources claimed that during the Petro’s initial coin offering (ICO) earlier this year, the fund-raising campaign collected more than $5 billion. This included a contribution from 83,000 individuals from more than 127 different countries, with Maduro also stating that close to $735 million was raised in the first 24 hours. If true, it would make it the most successful ICO of all time. However, due to the opaque nature of the project, these figures are yet to be independently verified.

National Cryptocurrencies

Read: National Cryptocurrencies

Secondly, it was originally claimed the Petro would be backed by Venezuela’s significant oil reserves. In fact, the nation has more provable oil reserves than Saudi Arabia, although the extraction process is far more costly. It has since been revealed that the Petro will only be backed by oil up to 50%, with the remainder made up of Gold (20%), Iron (20%) and Diamonds (10%). Once again, these claims are yet to be verified.

Thirdly, the Petro is a cryptocurrency in name, however it doesn’t resemble the true characteristics of the blockchain phenomenon. The reason for this is that the token is a centralized operation that is controlled solely by the Maduro regime.

At the time of writing, the Petro, which carries the ticker symbol PTR, is yet to be listed by CoinMarketCoin, subsequently making it difficult to ascertain how much interest has been achieved since its launch. Regardless, Bitcoin still seems to be the cryptocurrency of choice with the Venezuelan people, with trading volumes on peer-to-peer platform LocalBitcoins going through the roof since the economic crisis begun.

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Lionel Messi to Endorse Blockchain-Based “Finney” Mobile Phone

Finney Blockchain Phone

Lionel Messi – the Barcelona playmaker that is often described as the most naturally talented Soccer player of all time, is to endorse the world’s first blockchain mobile phone, as reported by UK newspaper The Independent. The organization behind the project, Swiss-Israeli-startup Sirin Labs, claim to specialize in multi-layer cyber security through the utilization of blockchain technology.

The smartphone, which is labeled as the “Finney”, is supported by a Google Certified fork of Android, which it calls Sirin OS. On top of having the underlying technology secured by blockchain technology, the Finney handset will also will also have a cold wallet application that allows users to safely store their cryptocurrency. Furthermore, the in-built Sirin app store will facilitate a range of decentralized applications (dApps). One such example is a dApp that will allow Finney users to exchange mobile data or battery power in return for digital tokens.

Finney Blockchain Phone

The Finney is set for an official launch date of November 29th, with an estimated price-tag of $1,000.

Sirin Labs have already had success in the smartphone space, with the 2016 launch of their “Solarin”. The device, which was at the time labeled as the “world’s most secure phone“, retailed for a substantial $16,000. The Solarin project also had an A-list celebrity tie, with both Tom Hardy and Leonardo DiCaprio attending the London premier launch event.

Celebrity Endorsers Beware

With the endorsement of Messi – who by the way, has just under 90 million Facebook followers, is excellent news for the cryptocurrency industry, insofar that it further supports the long-term goal of mass awareness. However, it is also important to note that the marketing strategy of employing a celebrity to endorse a blockchain-related project does not necessarily guarantee success.

For example, in late 2017, Floyd Mayweather, who is often dubbed as the best “Pound-for-Pound” boxer of all time, endorsed the now defunct initial coin offering of Centra Coin. The project – which claimed to provide a gateway for users to spend cryptocurrencies via a Visa or MasterCard backed debit card, raised close to $32 million before being shut down by U.S. regulators.

It remains to be seen how much money the project would have raised without the endorsement of Mayweather, however it is highly likely that his link to the ICO created an element of artificial legitimacy.

Then there was the case of John McAfee, the controversial founder of McAfee anti-virus software. McAfee recently admitted that he charged close to $100,000 to Tweet support for up and coming cryptocurrency projects, subsequently motivating unsuspecting individuals to invest in the recommended token.

Nevertheless, recognizing the slightly dampened history of celebrity endorsed blockchain projects, the team at Sirin Labs state that “If you’ve followed Messi’s career at all, you’d know he doesn’t just put his name on anything to make a buck,”

Is it Only a Matter of Time for Mass-Adoption?

Announcements such as the Finney product further illustrates the fact that although the cryptocurrency markets have been somewhat bearish since the turn of late 2017, much is going on behind the scenes. Whilst the value of most cryptocurrency portfolios are worth a fraction of what they were just 12 months prior, blockchain entities are churning out new and exciting ventures across multiple industries, indicating that the phenomenon is far from a short-term fad.

However, it remains to be seen just how long global adoption will take, especially when one considers the vast amount of projects now in existence.

Sirin Labs raised more than $157 million during their late-2017 ICO, with $110 million of this  received in the first 24 hours. However, as with the vast majority of cryptocurrencies, the Sirin Labs token has lost the vast majority of its value since it was issued. Reaching a remarkable all-time high of just over $320 million at the start of the year, the token currently has a total market capitalization of $18 million.

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SC Johnson Looks to Cryptocurrency Incentives to Reduce Ocean-Plastic Pollution

Cryptocurrency Ocean Pollution

Environmental practices are now at the forefront of governmental policy objectives at every corner of the globe. Whilst global ambitions to live in a more sustainable world are now being discussed at a U.N. level, U.S. manufacturer SC Johnson are looking to utilize the power of blockchain technology to further incentivize society to play their part.

According to an official SC Johnson press release, the manufacturer – who are behind global cleaning product brands such as Mr Muscle, Scrubbing Bubbles, Kiwi, Glade, Shout and Ziploc, are looking to collaborate with Plastic Bank, a leading environmental organization focused on reducing plastic ocean-based waste.

The report explains that five nations in particular-  notably Thailand, Vietnam, China, Indonesia and the Philippines, are responsible for over 55% of all plastic waste dumped in to the world’s oceans. Taking this in to account, the project will initially begin in Indonesia, with the opening of 8 plastic collection sites across the country.

Cryptocurrency Ocean Pollution

The idea behind the proposal is to reward individuals that deposit plastic waste at one of the regional centres, in the form of cryptocurrency. This acts as a major incentive for those involved as the report explains that the tokens can then be used to buy goods and services. Furthermore, as the project will be supported by blockchain technology, it practically alleviates the threats of loss or theft, ensuring that each centre remains transparent and accountable.

Combining Environmental Obligations with Incentivization

SC Johnson explain that close to 28 million people live below the poverty line in Indonesia, so the incentivization program has the opportunity to benefit a vast group of demographics. With the first centre opening in Bali in late October 2018, it is hoped that Indonesia will have its 8 centres fully operational by May 2019. After that, the plan is to then begin operations in neighbouring Asian nations.

Although it remains to be seen what specific blockchain protocol the project will be built on top of, the report suggests that users will be able to access their tokens via a bespoke Plastic Bank mobile application.

This comes as welcome news for environmental think-tanks, as ocean pollution is on the brink of disaster. According to Marine Safe – a UK-based NGO, more than 215 million metric tonnes of plastics found their way in to the ocean in 2010.

The Future Role of Cryptocurrencies in Re-Shaping the Planet

This isn’t the first time that a leading organization has looked to tackle global issues through the utilization of cryptocurrencies and blockchain technology. In May 2017, it was announced that the U.N were looking to use the Ethereum blockchain to distribute food rations in the form of coupons, to refugees living in Jordan. By removing the need for physical cash, it drastically reduces the threats of aid donations getting in to the wrong hands

However, it is also important to recognize that leading cryptocurrency projects also need to play their part too. With energy consumption levels growing at an exponential rate as a result of Proof-of-Work mining algorithms, it is estimated that Bitcoin alone demands more electricity than 159 different nations.

Moreover, with the vast majority of mining farms based in China, a nation that has a somewhat murky reputation when it comes to environmental standards, many argue that the energy-intensive characteristics of cryptocurrency mining is counter-intuitive to the underlying aims of the digital phenomenon.

Nevertheless, it is refreshing to see that the use of cryptocurrencies is being considered by major organizations with the view of making the world a more sustainable place. Although still in its early days, it will interesting to see what effects the SC Johnson and Plastic Bank collaboration yields.

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