Friday, December 28, 2018

Building for Bulls, Bears and the Crypto Revolution

It seems fitting to start my review this year with the same statement and observe how its meaning kaleidoscopes in the new light of 2018.

For context, in December 2017, the price of bitcoin had just hit its all-time high of $19,783.06. The price of ether was about to hit its all-time high of $1,417.38. CryptoKitties were running rampant all over the ethereum network, thousands of ICOs had launched in 2017 and hundreds of dedicated crypto funds opened their doors.

Today, the environment is a bit different. Those crypto funds are starting to shut down. ICOs that raised capital in crypto in 2017 have seen their runways halved and halved again. The price of bitcoin hovers around $3,500 and the price of ether plummeted below $100. CryptoKitties has a meager 378 daily active users, down from over 15,000 daily active users this time last year. Ouch.

What I failed to mention with last year's statement is that the runway isn't always smooth and it isn't going to be at a constant incline.

As Meltem Demirors so gracefully put it, "Tech that changes industries and markets doesn't get built overnight. There are fits, starts, and failures." Obviously, this market is throwing a fit. Furthermore, us builders should talk about it.

But Builders Don't Talk About Price
For as long as I can remember, it's been a significant taboo for builders in the space to talk about price. The market conditions shouldn't affect our attitudes or how we build. We actively avoid getting caught in the hype on the way up and avoid falling into depression on the way down.

We transformed "HODL" into "BUIDL," and there was also short-lived talk of "SHIPL."

However, refusing to engage in "price talk" doesn't mean we can, or should, ignore the swings of the market. This ecosystem is highly speculative and our roadmaps, runways and design choices are affected by larger macroeconomic conditions. Denying that the market conditions affect your work, company, financials, and culture is willful ignorance and is dangerous in the short and long term.

2017: Unprecedented Hype
As we saw in 2017, the bull market garnered previously-unseen hype, which led to new, inexperienced users entering the space en masse. Coinbase was adding hundreds of thousands of new users per day. Companies were hiring support teams by the dozens in an attempt to tread overflowing inboxes.

The things we did in 2017 were reactionary. Building for the short term was prioritized over the long term.

We didn't have refined processes or roadmaps — we had fires that needed to be put out yesterday. We hired those who were willing to wear many hats and didn't require much sleep. We put band-aids on the most glaring user experience issues as they cropped up, and we promised to iterate later. The market's ambitious upswing wasn't tied to the technology and experience being delivered.

2018: The Downward Spiral
2018 was a whole new world. The number of support tickets dropped as fewer new users entered the space. The types of questions we fielded about ICOs plummeted and more technical questions emerged once again.

The members of my team who were solely fueled by the adrenaline of 2017 had to evolve or move on to different projects. Some even left the crypto-space entirely. Our hiring and recruiting practices evolved, and the skills and personality traits we looked for became more refined.

The actions users are taking in 2018 have changed as well.

Whether it was taxes, the SEC, a more bearish market or the realization that the scope of blockchain use cases is still limited, people aren't doing much these days. Even when we look beyond the trading and investment activity via DappRadar and, we can see just how little activity is happening.

The market is questioning how "decentralized" applies to a world beyond us cypherpunks and early adopters. It's a valid question that us builders should ask too.

2019: Blood in the Streets?
To steal from Anthony Pompliano (who likely stole it from someone else), there is no "blood in the streets" yet. The blood is coming, but it isn't only from the individuals who have portfolios that are down more than 100 percent.

It is from anyone and everyone who failed to anticipate just how long this revolution would take. It is from people who didn't believe in the possibility of a market crash or a long winter. It is the ICOs that had all their holdings in crypto. It's from those who measure growth and value in terms of months, not years or decades.

More robust companies can reduce the sizes of their teams and cease throwing extravagant parties to lengthen their runways.

Less seasoned companies will have no choice but to shut down. And the most important companies are likely the ones you haven't yet heard of or are yet to be created.

2019 & Beyond
The coming years have the potential for people to create real, revolutionary value. This will not be the short-term capital creation that ICOs brought in 2017. It will be significantly deeper, take significantly longer and it will spawn from unlikely sources.

Reacting to new users and irrational exuberance is a different ball game than building products that break down the barriers of cryptocurrencies. In order to be relevant and stay relevant, you have to do more.

Those that will have a lasting impact and create the most value will be those who can build for both the bull market, the bear market and beyond the market. They will have the foresight to expect the unexpected, the hindsight to learn from the past and the insight to solve problems in unprecedented ways.

They will use their teams, tools, knowledge and communities to not only build for the next wave of users, but also help bring in the next wave of users. They will not build "on the blockchain" or "for the blockchain." They will build better solutions that happen to utilize the blockchain.

It's easier to build products for your existing environment and existing users, but it is shortsighted and will leave you straggling in the long term. Look outside this space for inspiration. Learn from traditional companies who have been around for decades or even centuries. Take the time to understand the motivations and needs of people around the globe. Don't make product decisions based on the graveyard of activity today. Don't create personas based on a Twitter poll you spun up yesterday.

Look to the future and anticipate. Your job is no longer to react to the current conditions. It's to be a fortune teller of tomorrow's landscape.

Sparking the Revolution
Many point to the dot-com bubble when analyzing the cryptocurrency markets in 2017.

Both saw 1,000 percent returns, rampant day-trading, fraud, capital flowing to any company with ".com" or "blockchain" in its name, and the creation of overnight millionaires even when those millionaires had neither delivered products nor profits. It's an easy comparison. But it's only one slice of history.

The repetition of history won't manifest as a carbon copy of itself, so it's hard to know exactly how this decentralized revolution will play out in totality. The revolution will be simultaneously subtle and profound. What we are building cannot be measured in months or judged by the hype cycles. We are aiming to transform nearly every industry that exists, starting with the financial industry.

The blockchain has come a long way since Satoshi's white paper and it will take at least that long to disrupt life in a meaningful way.

We have to keep zooming out to keep our perspective wide. The dot-com bubble isn't what transformed the internet, nor will the last two years be what transforms the blockchain. We need to look at the entire history of the internet and watch how it evolved over time. We need to examine how the Industrial Revolution managed to touch almost every aspect of daily life. We need to remember The Renaissance's lasting influence on intellectual inquiry.

And, as we do, we should be intimidated by what we have yet to accomplish and inspired by the opportunity to forge the runway ahead. Remember, the real lift off has yet to occur.

Judge Denies Craig Wright’s Motion to Dismiss Billion-Dollar Bitcoin Lawsuit


On Dec. 27, court documents from the case against the Nchain chief scientist, Craig Wright, explained a large portion of his recent dismissal motions were found "not warranted" and were denied. Wright is being sued for 1.1 million BTC in a legal case in Florida that alleges he manipulated David Kleiman's family.

The Lawsuit Against Craig Wright for 1.1 Million BTC Moves Forward
According to case 18-CV-80176 Kleiman v. Wright filed in South Florida, Craig Wright is accused of allegedly interfering with David Kleiman's bitcoin assets after he died. Kleiman's family believes David and Wright played a role in the early days of Bitcoin and possibly created the technology. This assumption was bolstered back when Kleiman, a forensic computer investigator was featured with Wright in tech publications such as Wired and Gizmodo, because they too thought the duo were possible Satoshi suspects.

Kleiman died in 2013 with very little money after fighting with MRSA, a bacterium infection that spreads in different parts of the body. His brother Ira Kleiman alleges Wright of plotting to "seize Dave's bitcoins and his rights to certain intellectual property," according to the legal documents filed last February. Kleiman's estate is suing Wright for approximately 1.1 million BTC ($3.9 billion) or the coin's fair market value and damages associated with IP theft.

Wright Accused of Grifting the Kleiman Family and Transferring David's Bitcoins to Various International Trusts
Nchain's Craig Wright and his legal representation, Rivero Mestre LLP, attempted to dismiss the case earlier this year. Wright's motion emphasized that Kleiman's lawsuit was full of "supposition, speculation, conflicting allegations, hearsay, and innuendo." The decision published on Dec. 27 explains the Florida district Judge Beth Bloom has granted Wright's motion to dismiss counts III, and IV. However, Wright must answer to counts I, II, V-IX of the amended complaint and he has until Jan. 10, 2019, to respond. For instance the 40-page court document states:   

[The] court finds that plaintiffs have sufficiently alleged a claim for conversion — The Amended Complaint alleges that defendant converted at least 300,000 bitcoins upon Dave's death and transferred them to various international trusts, was an unauthorized act that deprived the plaintiffs of the bitcoins therein — Accordingly, plaintiffs' claim for conversion (Count I) survives defendant's motion to dismiss.

The Kleiman complaints further allege that Wright took advantage of a family who didn't know too much about the technology. According to the lawsuit, the Kleiman family was unaware of certain property and IP assets that existed. Allegedly, Wright reached out to Dave's elderly father 10-months after he passed and said, "he was not seek[ing] anything other than to give [him] information about [his] son, and offering to help the Kleiman family recover what Dave owned."  

The Amended Complaint also says that Wright promised shares to David's family for a company called "Coin-Exch" and detailed the shares were "worth millions." Wright is also accused of "several fraudulent omissions and misrepresentations" to the Kleiman family and related to the property and assets David may have owned. Judge Bloom explains that the Eleventh Circuit Court of Appeals has not decided on whether or not bitcoins are considered "money." But Bloom emphasized the court still takes alleged victims and injury that occurs on home soil very seriously.   

"This controversy concerns a Florida company, regarding Florida assets (bitcoins mined in Florida) and intellectual property developed by a Florida company, where both the injured parties are Florida citizens," Bloom's decision states. "Therefore, the Southern District of Florida undeniably has a strong interest in adjudicating a case in which its residents claim that harm was committed against them."

The court documents assert that with counts I, II, V-IX still standing, Wright has not met his "heavy burden" against the opposing Kleiman estate and "dismissal on forum non-conveniens grounds is therefore not warranted."

Wednesday, December 19, 2018

Waves Platform Raises $120 Million for Private Blockchain


Waves Platform, a public blockchain network that has helped digital startups create tokens, said it raised $120 million for itself to roll out a private version of its Vostok system for corporations and governments.

Private investors were tapped in the fundraising round led by London-based financial services group Dolfin, Waves said in a statement Wednesday. The company's own cryptocurrency, known as Waves, jumped almost 50 percent to $3.80 in the past 24 hours, according to prices at 9:40 a.m. in London.

Founded in Switzerland by Russian engineer Sasha Ivanov, Waves Platform has benefited from a recent boom of initial coin offerings that let firms create and sell tokens via its distributed-ledger technology, which it describes as a fast and easy-to-use blockchain.

The Waves token has a market value of about $383 million, down from as much as $1.7 billion in December 2017, close to the speculative peak for cryptocurrencies, according to

"The cryptocurrency rush is over now, while the idea of using a decentralized network to store data and cut costs is still relevant," Ivanov said in an interview in his Moscow office.

Large firms and state entities often find the speed and security level of public blockchains to be insufficient, he said. So-called private blockchains, which have limited numbers of users, protect data better, according to Ivanov.

Vostok, similar to the International Business Machines Corp.-led Hyperledger in the U.S., will focus on Europe, Asia and the former USSR, expecting its first projects in the beginning of 2019, Ivanov said.

Russians to Be Allowed ICO Investments up to $9,000 per Year
Russian lawmakers have revised another bill regarding the regulation of the industry built around cryptocurrencies. In its latest version, the draft law on crowdfunding sets the maximum amount of money ordinary Russians will be permitted to invest in projects such as ICOs at less than $9,000 per year.     

Investments Limited to $1,500 per Project
The bill "On attracting investments using investment platforms" is one of the three pieces of legislation aimed at regulating the crypto industry that were adopted on first reading by the State Duma in May. The initial text approved by the lower house of Russia's parliament did not contain such limits. It only read that they should be determined in sub-statutory acts issued by the Central Bank of the Russian Federation (CBR).

According to the revamped draft law, private individuals will be allowed to invest through crowdfunding platforms up to 600,000 Russian rubles (less than $9,000) per year only, and a maximum of 100,000 rubles (~$1,500) per project RBC reported, quoting a copy of the document. Any investment exceeding 600,000 rubles, made by qualified investors or financial institutions, will be subject to mandatory oversight by the country's financial watchdog, Rosfinmonitoring, in order to prevent money laundering.

The new restrictions will limit the access of ordinary citizens to initial coin offerings (ICOs). The authorities in Moscow claim they want to protect Russians from the associated risks. In a statement, the CBR warned that investing through crowdfunding platforms can lead to the loss of all invested funds. However, the limits will not apply to social and charitable crowdfunding initiatives.

No Restrictions for 'Qualified' Investors
Professional investors will not be restricted in their participation in crowdfunding projects. Private individuals can be treated as "qualified investors" provided they meet certain criteria detailed in the federal law "On the securities market." For example, they must control assets worth at least 6 million rubles (almost $90,000) and prove they have been employed in the securities industry for at least two years.

The revised crowdfunding bill is likely to be voted on second reading in the Duma in January revealed one of its authors, the chairman of the Financial Markets Committee Anatoly Aksakov. Before the parliamentary summer vacation, deputies approved two other drafts – a bill amending the country's Civil Code to introduce a legal definition of "digital rights" and the main draft pertaining to the regulation of cryptocurrencies, the law "On digital financial assets."

The latter bill also underwent serious revision, with lawmakers dropping key terms like "cryptocurrency" and "mining." Representatives of the crypto industry protested and proposed an alternative bill granting cryptocurrencies "special status." However, Russia's Deputy Prime Minister Maxim Akimov recently stated that authorities do not plan to introduce any more significant amendments to the texts. The crowdfunding law has also lost important terms related to the crypto economy such as "tokens" and "smart contracts."

Wednesday, December 12, 2018

Crypto Price Watch: Waves, Tezos and Maker See Green Despite Dwindling Market Prices


Even as a majority of the top 10 altcoins within today's crypto market continue to see red, there are digital currencies like Waves, Maker, and Tezos that have witnessed an upward surge of 9%, 3%, and 2.5% respectively over the course of the past 24 hours.
Waves Continues Its Strong Performance

As can be seen from the chart below, around a week back the price of a single Waves token jumped by over 50% to touch an impressive price point of $2.32. In terms of what could have sparked this massive uptrend, many experts believe that the recent Waves Mobile app update could have had something to do with the increase.

For those not aware, the Waves dev team recently announced the launch of their much-awaited 'operational protocol upgrade' which allows customers to seamlessly "deposit, store and withdraw their altcoins" in a safe and secure manner. Not only that, but users can now also trade and lease out their assets on the Waves DEX with the touch of a button.
#WavesPlatform has had a great November with the release of our new mobile app and several other developments! We're continuing to build some outstanding tech to bring #blockchain to the mainstream. Here's what we've been up to in the past month:$WAVES

— Waves Platform (@wavesplatform) December 11, 2018

Additionally, it is also worth noting that the latest iteration of the Waves app will introduce several new exchange listings as well as provide users with full integration support with the Ledger Nano S hardware wallet.
Tezos (XTZ) Surprises Everyone With its Strong Performance

While many had relegated Tezos (XTZ) to the peripheral fringes of the crypto world recently, it now appears as though the project is making a steady comeback (especially since the currency has been showcasing a lot positive financial momentum over the course of the past week or so).

For those who may not remember, Tezos is probably most famous (or infamous) for having raised a whopping $232 million during its ICO phase as well as the scandal that rocked the project straight after.

Lastly, it is also worth pointing out that the XTZ token is currently trading below its original ICO price of $0.51 for around $0.375 (at press time). However, this drop is not as significant as the one witnessed by Ethereum as well as some of the other premier cryptos like BTC, BCH.

In this regard, a market analyst for pointed out that Tezos was not even listed on a single exchange at the start of the year. The reason given for this delay was that the project's native blockchain network had not gone live till like mid-2018.

Tezos wasn't even on an exchange in Jan of 2018.
— Jovan Smith (@JvdollaJovan) December 6, 2018

Final Take
While many of the top crypto coins in the market have struggled to stay afloat throughout the year, there are some lesser-known assets that have continued their strong performance recently. It now remains to be seen how the future of smaller tokens such as Maker, DEX, Revain, Tezos plays out in the coming few weeks.

Former Mt. Gox CEO Could Face 10 Years in Jail Over Embezzlement


Japanese prosecutors are seeking a 10-year jail term for Mark Karpeles, the former CEO of Mt. Gox. The embattled Frenchman, who has been previously accused of diverting company money for prostitutes, business acquisitions and luxury items, is facing charges of transferring $3 million of client funds to his own account for investment in a software development business.

Karpeles Pleads Innocence But Authorities Aren't Buying It
According to prosecutors, Mark Karpeles falsified Mt. Gox's trading system to make customer balances appear healthier than they in fact were. He also acted in violation of the country's corporate law, Japanese daily The Mainichi reported on Dec. 12.

Karpeles has sworn his innocence and says the money, moved in the last four months of 2013, was meant to serve as only a temporary loan. He also argued, earlier in the trial, that the funds in question did not belong to clients but were his now-defunct company's revenue.

However, prosecutors have argued there is no evidence that this diversion of funds was merely as a temporary loan. "There was no documentation of loans and there was no intention of paying back," reads their submission at the Tokyo District Court. Karpeles, prosecutors argue, must be slapped with a harsh sentence for betraying the confidence of investors who trusted him with their money.

The Great Bitcoin Heist
Mt. Gox went from handling 70 percent of global bitcoin trades in 2013 to bankruptcy in 2014 after about $400 million was supposedly lost to hackers, with 200,000 bitcoins recovered two weeks later. The current lawsuit is not investigating the cause of this theft.

As the effects of the discrepancy became apparent, the exchange initially delayed withdrawals for up to three months before completely ceasing them altogether, ostensibly over the theft of bitcoins. The company entered bankruptcy proceedings in 2014 but has since undergone civil rehabilitation processes to enable it to pay bitcoin still owed to investors. It has yet to be determined how much users will be repaid, given the numerous fluctuations in bitcoin's trading price since 2014.

Mark Karpeles
"I never imagined things would end this way and I am forever sorry for everything that's taken place and all the effect it had on everyone involved," Karpeles said earlier during the bankruptcy saga, although he has consistently maintained his innocence. In November, a Mt. Gox trustee sought to defer the deadline for filing civil rehabilitation claims, initially slated for October, until this month.

Regardless of how the matter plays out in Japan, Karpeles faces more legal trouble in the U.S. where former Mt. Gox clients filed a lawsuit against him several months ago. Karpeles' lawyers want the lawsuit dismissed on the basis that a U.S. court has no jurisdiction over the matter.

Wednesday, December 5, 2018

Waves revamps mobile wallet


The Waves Platform, a decentralized blockchain ecosystem, has announced a comprehensive update of the Waves Wallet mobile app which is now available for download on the App Store and Google Play.

Launched over a year ago, the Waves mobile app was up to the task of enabling users to connect to the network and make transactions. However, as Waves' blockchain developed, the mobile team saw opportunities for improving the app by adding new features.

The result of many months of the mobile development team's effort is a comprehensive, all-in-one app for mobile devices with an absolutely unique feature set, including a crypto wallet, the Waves DEX and fiat gateway.

"We believe our app provides a step forward for crypto and blockchain community, a better experience for iOS and Android users than they can get elsewhere," says Sasha Ivanov, Founder and CEO of Waves Platform. "The new mobile app incorporates the most popular features of the desktop Waves Client going far beyond the functionality of the wallet. At the moment no other platform offers anything like that."

In the new app all traffic is encrypted, which is important for privacy and security. Private keys are encrypted and never leave user's smartphone and are never exposed to the web. A range of further security measures is added, including Face ID, Touch ID and Fingerprint scanning.

Users can trade on DEX, with the great tools and charts they've come to expect, but with the convenience of mobile. There's also access to fiat and crypto gateways, so users can deposit, store, trade and withdraw other assets.

The most popular digital asset management tools from the Waves Platform are also available. Users can send tokens to their address book contacts, lease WAVES, receive warnings about suspicious tokens and burn any spam assets. 

P2P Markets Report: Dumping Drives Record Volume Across Latin America and Asia


Japanese public company Money Forward, operator of a personal budgeting app with 7 million users, is preparing to launch a crypto exchange. Three cryptocurrencies will be supported. A representative of the company has shared some details with about the platform and the company's future crypto projects.

New Crypto Exchange
Money Forward Financial Inc., a wholly owned subsidiary of Tokyo Stock Exchange-listed Money Forward Inc. (TYO: 3994), has announced some details of its upcoming cryptocurrency exchange.

A representative of the company confirmed to that the exchange will initially support three cryptocurrencies: BTC, ETH and BCH. There will be live order books and trading charts but margin trading will not be offered at launch. In addition, the name of the exchange is not yet disclosed.

The new crypto exchange will be "linked to our personal financial management service called Money Forward Me," the representative added. This flagship product has 7 million users, according to its website. The company describes this app as one that "automatically aggregates statements of bank accounts, credit cards, securities accounts, fx accounts, pensions/points and compiles a household accounting book."

A Money Forward app.
Established in May 2012, Money Forward Inc. has nine subsidiaries and seven offices across Japan. The Tokyo-headquartered company offers a wide range of products including an automatic savings app and a financial services portal for individuals as well as accounting, tax return, invoicing, payroll, and information management systems for businesses. Its shares have been listed on the Tokyo Stock Exchange since September last year.

In terms of future cryptocurrency projects, the representative said, "In future years, we would like to cover money transfer and payment services."

Registering With FSA
During a press conference on Monday, the president of Money Forward Financial, Junichi Kanda, talked about the challenges of registering a crypto exchange business with the Financial Services Agency (FSA).

In the beginning, registering with the FSA is a "relatively light" process, Kanda described. However, after the hack of Coincheck in January, the regulator has tightened its oversight and evaluation of crypto exchanges and no company has been granted registration since then.

Noting that his company has been in consultation with the FSA, Kanda said that he expects his exchange to be able to register and launch by the end of March next year. In addition, Money Forward Financial announced on Monday that Yamane Hidero, a former FSA inspector, has been appointed as head of the company's internal control department.

Yamane Hidero
The Money Forward representative confirmed to
We would hopefully like to start the [exchange] business between January and March 2019, though it depends on the FSA's [registration] procedure.

Japan's revised Payment Services Act requires that all crypto exchange operators register with the FSA. Currently, 16 operators have been granted registration and three, including Coincheck, have been allowed to operate exchanges while their applications are being reviewed by the agency. The FSA previously revealed that more than 160 companies have expressed interest in registering to operate crypto exchanges.

What do you think of Money Forward launching a cryptocurrency exchange? Let us know in the comments section below.

Thursday, November 29, 2018

The US Government Is Powerless to Block Bitcoin Addresses


It has been widely reported this week that the U.S. government has blacklisted two BTC addresses linked to cyber crime. These particular addresses were singled out because their owners are believed to be Iranians, whose country is currently facing heavy economic sanctions from the U.S. While the BTC addresses are clearly connected to ransomware, mainstream media has gotten one crucial element of the story wrong: You can't blacklist a bitcoin address.

The Office of Foreign Assets Control (OFAC) is the financial intelligence wing of the U.S. Treasury Department. It enforces economic sanctions against foreign entities the American government has taken exception to. Right now, it has Iran in its sights. By OFAC's own admission, however, trying to blacklist bitcoin addresses is a first. "While OFAC routinely provides identifiers for designated persons, today's action marks the first time OFAC is publicly attributing digital currency addresses to designated individuals," explained the agency, adding:

Like traditional identifiers, these digital currency addresses should assist those in the compliance and digital currency communities in identifying transactions and funds that must be blocked and investigating any connections to these addresses.  As a result of today's action, persons that engage in transactions with [these addresses] could be subject to secondary sanctions.

You Can't Blacklist a Bitcoin Address
The addresses in question, 149w62rY42aZBox8fGcmqNsXUzSStKeq8C and 1AjZPMsnmpdK2Rv9KQNfMurTXinscVro9V, have been involved in over 7,000 transactions since 2013 and received close to 6,000 BTC. As of Nov. 28, anyone interacting with these addresses could technically be held liable by the U.S. government and punished in some way. In reality, though, these threats are little more than empty words. No one — not even the U.S. government, with its army of apparatchiks and enforcers — can prevent a specific address from sending or receiving bitcoin. With cryptocurrencies such as EOS or ripple, OFAC would likely have more success, but decentralized assets such as BTC and BCH are uncensorable.

To demonstrate the pointlessness of the blacklisting, both BTC addresses have received transactions in the past 24 hours. In one instance, vanity addresses were used to troll OFAC and to reiterate the futility of its digital currency sanctions. While cryptocurrency exchanges can and do block accounts linked to certain addresses, the Bitcoin protocol remains immune from such interference. Permissionless and stateless, bitcoin can't be blacklisted. That's why it's so valuable.

Canadian Bitcoin Miner Fortress Blockchain Reports $1.16M Loss in Q3


Fortress Blockchain's net loss worsened to $1.16 million (1.55 million Canadian dollars) in the third quarter, from $202,000 in the preceding three-month period, as price pressure continues to mount in the global bitcoin mining industry. The Canadian company said depreciation of $291,600 and listing expenses of $293,700 wiped away mining earnings.

Revenue Falls as Bitcoin Plummets
Fortress Blockchain, which listed shares on the TSX Venture Exchange in August, sold 179.8 BTC for $1.13 million in the three months to September, at an average price of $6,605 per coin. About 83 BCH was sold for $35,300. The Vancouver-based company extracted much less bitcoin and bitcoin cash during the third quarter, however, as global cryptocurrency prices plummeted. It mined 64.5 BTC and 52 BCH at significantly lower prices compared to the previous quarter.

Revenue from its mining operations declined 37 percent to $463,900, from $741,000 in the previous quarter, according to an earnings release published Nov. 28. Revenue from the sale of bitcoin mining equipment coupons reached $267,500 in the three months to the end of September.

It said it had faced challenging conditions due to the "volatility in bitcoin prices." It has also seen a rise in costs related to depreciation, listing and share-based compensation. Gross mining margins came in stronger, however, at 62 percent.

"The industry has gone through a corrective phase where mining difficulties are at an all time high while bitcoin prices have declined," said Aydin Kilic, chief executive officer and co-founder of Fortress. "At press time, we have noticed the mining difficulty for Bitcoin has significantly decreased. However, this has been outpaced by a significant decline in the price of bitcoin."

Miners Continue to Struggle
The global price of bitcoin has plunged more than 70 percent since January, dragging the rest of the cryptocurrency market down with it. Companies involved in mining or selling mining hardware have been hit hard. Reports say some companies have gone bankrupt, with a number of miners in China resorting to selling their equipment as junk to cut losses.

Fortress, which has a market capitalization of $6.40 million, touts itself as a low-cost green energy miner. The company operates about 1,400 S9 application-specific integrated circuit (ASIC) miners at its 2 MW flagship facility in the U.S. state of Washington, with an average operating hash rate of over 18.9 petahash/second.

Fortress has cut staff to achieve cost savings of $26,300 per month, said Kilic, who took a pay cut as part of a broader corporate reorganization exercise. The company also bolstered efficiency by installing Bitmain's Overt ASIC Boost firmware on all of its mining hardware, resulting in a 14 percent average decline in power consumption, he said.

By the end of September, Fortress had cash on hand of $7.98 million and $19,200 of digital currency holdings, compared to $6.90 million in cash and $769,900 in cryptocurrency at the end of June. Its shares closed up 4.4 percent at $0.09 on Nov. 28.

Wednesday, November 21, 2018

KPMG: Institutional Investment Key to Cryptoassets Growth


Auditors KPMG have published a report stressing the need for institutional investors to join the cryptocurrency industry. The report outlines the importance of cryptoassets as an investment alternative and how institutional investors can take part in the process.

Digital Assets Have Potential, Institutionalization Needed to Scale'
In the report, released Nov. 18, the Netherlands-based firm said a new world of finance is emerging in which transacting in digital assets may become standard operation. "Cryptoassets have potential," KPMG wrote, in the report titled 'Institutionalization of Cryptoassets."

"But for them to realize this potential, institutionalization is needed. Institutionalization is the at-scale participation in the crypto market of banks, broker dealers, exchanges, payment providers, fintechs, and other entities in the global financial services ecosystem," it said.

The study comes at a time the use of digital currencies is gaining worldwide adoption, both as a unit in financial transactions and as a store of value.

Christine Lagarde, the managing director of the International Monetary Fund, last week said central banks throughout the world should consider issuing digital currency to make transactions more secure. Lagarde argued that state-backed cryptocurrencies could satisfy public policy goals related to financial inclusion, consumer protection, privacy and fraud prevention.

Although observers point to the risks of central banks' involvement in cryptocurrency, such as the potential to slow down transactions and raise costs through over-regulation, KPMG views the coming on board of financial institutions as crucial to boosting public confidence in digital assets.

"Institutionalization is the necessary next step for crypto and is required to build trust, facilitate scale, increase accessibility, and drive growth," the auditors asserted, adding that it would be prudent for countries in hyperinflation, like Argentina, to adopt cryptocurrencies to preserve value.

KPMG said: "A globally accessible, decentralized store of value could have a significantly stabilizing impact on the country's economy. Bitcoin could potentially represent such a store of value in the future.

"Interestingly, even though there are large price fluctuations with Bitcoin, it is not inherently volatile. The supply is in fact fixed and algorithmically secured. It is the demand that is fluctuating and this could eventually stabilize as the market matures," it added.

Truly Open Global Financial System
Writing in the same report, Coinbase chief compliance officer, Jeff Horowitz, said cryptoassets are an opportunity to transform the financial industry into a truly open global financial system.

"Regulatory agencies are also beginning to seriously discuss cryptoassets, which could help drive institutional participation, encouraging the marketplace to think about how engagement with these assets fits into both existing rules and regulations and new frameworks that may be needed for crypto," he said.

However, Horowitz noted that the focus on cryptocurrency innovation must not come at the expense of security, compliance, and consumer protection.

"Leaders in the crypto space, including crypto entities and industry partners, have a responsibility to help influence and educate key legislators and regulators to advance the overall governance and enforcement framework," Horowitz detailed.

"In many ways, leading crypto companies should aspire to meet the standards and leading practices established by traditional financial services companies. We believe this will help promote trust and accelerate the adoption of crypto by investors and institutional clients," he added.

Indian Government Expects to Finalize Crypto Bill Next Month


Kind regards,

The Indian government has reportedly filed an affidavit with the country's supreme court detailing its progress on cryptocurrency regulations. "Serious efforts are going on" to prepare the draft crypto bill and report, the government explained. The two are expected to be discussed by the inter-ministerial committee by next month.

Government's Counter-Affidavit
The Indian supreme court has been trying to hear the petitions against the crypto banking ban by the central bank, the Reserve Bank of India (RBI). On Oct. 25, the court directed the government to file a counter-affidavit within two weeks, detailing its crypto regulatory progress. The court specifically asked for a report from the committee set up by the finance ministry to recommend crypto regulations. This committee is headed by Subhash Chandra Garg, the country's Economic Affairs Secretary.

On Tuesday, Quartz reported that the government has filed the counter-affidavit with the supreme court, which the publication claims to have reviewed.

"A finance ministry panel set up in November 2017 could be ready with draft regulations next month," the news outlet wrote. It proceeded to publish the following excerpt from the counter-affidavit:

…currently, serious efforts are going on for preparation of the draft report and the draft bill on virtual currencies, use of distributed ledger technology in (the) financial system and framework for digital currency in India.

The publication continued to explain that "It is expected that the draft report will be placed before the IMC [inter-ministerial committee] by next month." Both the draft report and the bill will be circulated to IMC members and discussed at the next IMC meeting.

According to the counter-affidavit, "The next two meetings of the Garg panel, to be held next month and in January 2019, will deliberate the draft report, and the provisions of the draft bill on virtual currencies," the news outlet conveyed.

Supreme Court Hearing
The central bank issued a circular in April banning financial institutions under its control from providing services to crypto businesses. The ban went into effect in July. A number of petitions have been filed against the ban.

The Indian supreme court scheduled to hear all the petitions against the ban on Sept. 11. However, the hearing has repeatedly been postponed. Then, on Oct. 25, the court directed the government to submit the counter-affidavit before the next hearing is scheduled.

Meanwhile, banks have closed accounts of crypto exchanges, forcing them to come up with their own solutions to provide fiat support to their customers such as through peer-to-peer systems.

Wednesday, November 14, 2018

Chinese Mining Farms Undergo Tax Inspection, Michigan Bans Campaign Donations in Cryptocurrency


 In recent regulatory news, we report on an authorized mining company in China that has had its operations temporarily halted for tax inspection and implementation of real-name registration processes. We also look at the Michigan Secretary of State's ban on crypto-based political donations, as well as the recent certification of X8's stablecoin for Shariah compliance. In addition, we focus on the operator of a fraudulent cryptocurrency scheme who has been punished for misappropriating $601,000 in BTC and LTC from his employer.

Chinese Mining Farms Suspended
According to a statement published by an unidentified cryptocurrency mining company, Chinese state agencies have ordered the suspension of its mining farms in southwestern Guizhou Province and the Xinjiang Uyghur Autonomous Region for tax inspections and to implement real-name registration processes.

"According to the needs of the public security department's network information security work, in the future, our company will implement higher standards for the company's business real-name system according to the work needs of the public security department," the anonymous company said. "For customers with the latest standard real-name systems, the data center will have to suspend reloading, restarting, moving in and out, etc."

Michigan Secretary of State Says 'No' to Crypto
In a letter addressed to William Baker, a recent candidate for the Michigan state legislature, the office of the Michigan Secretary of State has formally barred cryptocurrency donations to political campaigns.

Baker, who lost his bid in the state's Nov. 6 election, had previously sought clarification on how the value of donations in the form of cryptocurrencies should be recorded. He also asked whether virtual currency exchanges would qualify as valid secondary depositories for the storage of crypto assets.

Baker asserted that "it is self-evident that digital currency is a valid way to receive political contributions." However, the state secretary's office responded by stating that "the law does not authorize such a vehicle, and the department has never determined that digital currencies are a valid way to receive political contributions."

The letter also highlighted concerns pertaining to the price volatility of cryptocurrencies. "As with stocks and commodities, bitcoin's worth fluctuates daily," the office said. "There is no way to ascertain the precise monetary value of one bitcoin on any particular day."

The Michigan Secretary of State raised additional objections to the use of cryptocurrencies as donations. In the letter, the office added that state legislation also "requires that committees deposit funds in an account in a financial institution, which is not an option for cryptocurrency."

X8 Stablecoin Certified as Shariah Compliant
X8C, the stablecoin issued by Swiss fintech company X8 AG, has obtained a certificate showing that its stablecoin is compliant with Shariah law. It received the certification from the Shariyah Review Bureau, an Islamic advisory firm licensed by the Central Bank of Bahrain.

Francesca Greco, director and co-founder of X8, announced that the company will soon establish a regional office in the Middle East. Greco also indicated that X8 plans to launch a Shariah-compliant virtual currency exchange, adding that the company has already met with representatives of exchanges based in Abu Dhabi, Dubai and Bahrain.

"The Gulf region is a really good place for financial technology companies, because they all want to become hubs for fintech," Greco said.

CFTC Fines Crypto Scheme Operator Over $1.14M
The U.S. Commodity Futures Trading Commission (CFTC) has ordered Joseph Kim, a resident of Phoenix, to pay more than $1.14 million for operating a fraudulent cryptocurrency scheme. Kim was also sentenced to 15 months in prison on "related criminal charges" filed in the U.S. District Court for the Northern District of Illinois. According to the court order, Kim pleaded guilty to "orchestrating a fraudulent Bitcoin and Litecoin scheme that led to more than $1 million in losses."

Kim was found to have misappropriated $601,000 worth of BTC and LTC from his employer — described as "a Chicago-based proprietary trading firm" — before attempting to fabricate security-related issues to obfuscate the misappropriation of funds. Despite this, the company fired Kim in November 2017 after the theft of the cryptocurrency was discovered.

Between December 2017 and March 2018, Kim then sought to repay his former employer through profits that he had generated through the operation of a cryptocurrency trading scheme. According to the CFTC, he "falsely told customers that he would invest their funds in a low-risk virtual currency arbitrage strategy, when, in fact, Kim made high-risk, directional bets on the movement of virtual currencies that resulted in Kim losing all $545,000 of his customers' funds."

Bitcoin Group SE Buys Investment Bank Tremmel


Bitcoin Group SE has bought 100 percent shares of investment bank Tremmel for an undisclosed amount. This is the German digital currency exchange operator's second acquisition in 2018. Bitcoin Group, which holds current assets of $40 million, said Tremmel allows it to issue its own cryptocurrency-related products, conduct proprietary trading and operate bitcoin ATMs.

Acquisition to Expand Bitcoin Group Services Portfolio
Bitcoin Group SE Buys Investment Bank Tremmel for Undisclosed Figure

The Frankfurt Stock Exchange-listed company operates, Germany's only regulated digital currency exchange, trading BTC, BCH and ETH. It hopes to use Tremmel's banking license to expand the range of its service portfolio. For example, Bitcoin Group said it is now possible for the trading platform to maintain an order book and even quote prices, while simultaneously ensuring more liquid trading.

"We are very pleased that in Tremmel Wertpapierhandelsbank Gmbh…we have been able to gain an excellently positioned partner with in-depth knowledge of the market," Marco Bodewein, managing director of Bitcoin Group, said in an online statement on Nov. 12. "This will enable us to take the corporate development of Bitcoin Group SE to a new level," he added.

The deal is expected to be completed in the first half of 2019, subject to approval by relevant regulatory authorities. Bitcoin Group did not disclose the actual purchase price, but said "it is in the lower seven-digit euro range."

Rainer Bergmann, the previous sole shareholder and managing director of Tremmel, is to continue working at the investment bank in the same capacity. The bank, which trades shares, bonds and other stock exchange products on behalf of local and foreign banks, insurance companies and asset managers, will be expanded into a deposit-taking institution, Bitcoin Group said.

Digital currency exchanges are looking for growth in new areas or to consolidate existing positions to help boost revenue and minimize risk from an uncertain regulatory environment in their home economies.

In January, Bitcoin Group, which has 753,000 investors actively using its exchange to buy and sell digital assets, bought a 50 percent stake in financial investment broker Sineus Financial Services Gmbh, to diversify risk. "In the future, this will enable the group to offer additional financial services in the cryptocurrency sector," the company said at the time.

For the first six months of this year, Bitcoin Group reported net profit increase of 306 percent to $3.85 million from $0.95 million a year earlier. Revenues tripled to $6.57 million from $2.1 million in the comparable period a year ago. Operating profit climbed 368 percent to $5.64 million. The exchange said about $707.6 million worth of BTC was traded on the platform at the end of last year, when the price of the cryptocurrency peaked at $20,000.

After close Tuesday, shares of Bitcoin Group were down 0.36 percent at $31.41 in Frankfurt trading. Over the past 52 weeks, the stock has reached a low of $28.02 and a high of $97.18.

Wednesday, November 7, 2018

BCH Professional Stress Test scheduled for November 17


After the success of the first Bitcoin BCH stress test on the first of September, the group behind that test have decided to ramp up their efforts to showcase the robustness and reliability of the of the BCH Network.

The group plans a more extensive, more professional stress test on November 17, two days after the scheduled protocol upgrade.

Rather than I tell you about the upcoming stress test, Brenden Lee of has put some words on the page to give some insight into their group, their processes and what everyone can expect come November 17.

The Professional Stress Test

"Our team came together to bring the first stress test to life, and while the test itself was something of a success, the 2.2 million transactions were a far cry from the target we had set for ourselves of 5 million transactions.

The reasons were wide-ranging and included a lack of automated systems for re-starting tests that failed, issues with the way some nodes were managing transaction buffers, and a lack of people to run the testing and manage the system.

After the test, a small group of us came together to look at forming a professional testing group, and the idea of the professional stress test was born.

Dale Dickins is an early Bitcoin activist and the maker of a documentary called "The Bitcoin Doco." She works tirelessly to build networks of people who use Bitcoin, creating small social worlds to achieve great things. She has recently been part of the group who brought the Bitcoin Cash Jeepney to the streets of Manila and is working on forming long-term business relationships in Bitcoin.

Esthon Medeiros is the wizard behind the curtain, building and managing the test machinery, currently being referred to as the 'Satoshi Shotgun,' which has significantly evolved since the first test. We now can create many geographically dispersed nodes using multiple Bitcoin clients (we currently support Bitcoin Unlimited, Bitcoin SV and Bitcoin ABC) and can easily regather funds and send large numbers of transactions for a sustained period. The machine's power will be on display during the upcoming pre-test which we hope will achieve at least one 32MB block.

Brendan Lee is the author of BUIP086 which extends the functionality of Bitcoin QR codes and developed and now sells the patented Safewords system through his company Coin storage Guru, while more recently has been fortunate enough to be part of the team at Tokenized, recently awarded the Coingeek Token prize. His role has been planning the strategy for ensuring money and resources are available on the day as well as acting as a technical interface for customers.

John Goldberg is the creator of the innovative Pixel Wallet (an Android BCH wallet that uses pictures to send cash) and was a significant contributor to the original stress test and one of the core members of the BCH Jeepney team, who were the first to implement Handcash's POP Retail system in a real-world application.

We also have Spark who created some fantastic data visualizations for the first stress test and is working on ways to capture the essence of what happens during this stress test.

And finally, Yobits who was the originator of the Stress Test idea and as webpage master has done a great job putting together a beautiful website.

As for the stress test itself, we want it known that we are not here to break things. We, as a team, are aligned with Satoshi Vision, however, have decided to run the test in such a way that a network supporting current rules, or the ABC ruleset would face minimal disruption.

The test will challenge mempools, and users may have to pay slightly higher fees than usual (test transactions will carry a fee of just 1sat/byte, so transactions with two satoshis/byte should usually be mined in the next block regardless of the state of the mempool) for reliable transaction confirmations. However, we believe that if a network wants to call itself Bitcoin, it must be able to show the world that it is anti-fragile, and this includes withstanding attacks that I would consider relatively cheap (we will spend about 70BCH over the course of the day) for a well-funded state based actor to execute.

We are very strong proponents of scaling Bitcoin and believe that a successful demonstration of a public network processing over a million transactions per hour will send a huge signal to businesses and the broader public that Bitcoin Cash is serious about adoption, and serious about becoming a global cash network. We hope that we can generate enough hype through this test that companies looking at implementing cryptocurrency-based payments will put Bitcoin Cash first, as it forges a path towards being the best money possible.

Following the stress test, the team is working on a business plan to create value-added services around generating large volumes of transactions on the blockchain for things such as advertising, corporate testing, stress testing and more. The team is very much looking forward to announcing these efforts soon. – Brendan Lee

nChain releases statement on protocol upgrade and hash war


nChain has released a public notice intended for cryptocurrency exchanges and bitcoin cash wallet operators. The company is offering its recommendation on how these companies should handle the hash war and the potential of a BCH split.

You can read their statement below in its entirety:
On November 15, 2018, the Bitcoin Cash (BCH) network will undergo a scheduled protocol upgrade. This protocol upgrade has been different to previous upgrades due to differences in opinion as how best to evolve the Bitcoin Cash network to continue to meet the demands of enterprises and consumers who support Bitcoin Cash. We have developed Bitcoin SV, a new full node implementation for Bitcoin Cash, designed to support the original "Satoshi Vision" of Bitcoin. We are asking BCH miners to vote for the Bitcoin SV implementation over competing implementations (such as Bitcoin ABC) using their hash power under Nakamoto consensus rules.
As the November 15 date nears, we provide exchange operators and wallet providers this update about Bitcoin SV and the protocol upgrade's short-term material impact on their operations.

What is Bitcoin SV?
With Bitcoin SV, we are not seeking to create a new Bitcoin variant and we are not intending to create a new Bitcoin SV token. Instead, Bitcoin SV merely gives BCH miners another choice of implementation (competing with Bitcoin ABC and other existing BCH implementations) for miners who want to support the original Satoshi Vision for Bitcoin.   As set forth in the original Bitcoin white paper, it is up to miners' voting with their hash power (the Nakamoto consensus mechanism) to decide rules for the network.

At our website, you can find out more information about the Bitcoin SV implementation, and a link to our GitHub repository where the Bitcoin SV code can be downloaded.

What Will Happen After the November 15 Protocol Upgrade?
A temporary Bitcoin Cash chain split is imminent on November 15th between Bitcoin SV and Bitcoin ABC. (Bitcoin Unlimited, another key BCH implementation, intends to remain neutral and be compatible with both Bitcoin SV and Bitcoin ABC rule sets, as a configurable option.)
There will likely be a period of time before this temporary chain split is resolved, while miners are voting with their hash power.
Significant miner hash power (over 40% of the current BCH hash total) is supporting Bitcoin SV. Therefore, the Bitcoin SV consensus rules stand a very strong chance of becoming the dominant implementation on the BCH blockchain.
No transaction replay protection is in place on Bitcoin ABC or Bitcoin SV.
Which Chain Should be Recognized as Bitcoin Cash?

We believe that exchanges, as well as other BCH business operators, should recognize as Bitcoin Cash (and the ticker symbol BCH) the longest chain with the most legitimate, sustained Proof of Work. The Nakamoto consensus procedure is how Bitcoin's decentralized system is meant to work, rather than leaving the Bitcoin Cash name and BCH ticker symbol forever in the control of any group(s) who may have initiated it or claim to control it.
We do not ask exchanges to pick a side between Bitcoin SV, Bitcoin ABC or other implementations. In fact, exchanges should remain neutral because their function is not to decide the technical roadmap for Bitcoin Cash or choose between implementations of BCH.

Exchanges: What Should They Do Before the November 15 Protocol Upgrade?
Immediately install a Bitcoin SV node: We highly recommend that exchanges immediately install a Bitcoin SV node to be prepared in the case that SV becomes dominant so that exchanges can continue Bitcoin Cash trading with minimal delay and disruption to users.
Consider suspending BCH deposits/withdrawals. Neither Bitcoin SV nor Bitcoin ABC have implemented transaction replay protection, as the intention is for only one chain to survive. We recommend that exchanges evaluate risks and consider, as a precaution, whether to suspend Bitcoin Cash deposits/withdrawals until one chain emerges as dominant. If exchanges continue to operate during this period, it is highly recommended that transactions continue to support existing consensus rules and are broadcast to both chains until such time a dominant chain emerges.
Wallet Operators: What Should They Do for the November 15 Protocol Upgrade?

Immediately install a Bitcoin SV node. We highly recommend that BCH wallet operators also immediately install a Bitcoin SV node to be prepared in the case that SV becomes dominant to avoid disruption to users.
Notify Users of Possible Delays. It would be prudent to notify users that they may experience some delays in sending and receiving BCH after the protocol upgrade and resulting hard fork.
Risks of Wallets Accepting DSV Transactions. has announced intention for its wallet to run the new Bitcoin ABC v 0.18.2 client after the protocol upgrade and before one chain emerges as dominant.  The new Bitcoin ABC client adds a controversial new OP_code (OP_DATASIGVERIFY). has stated that its wallet will add OP_DATASIGVERIFY as a default to all transactions sent from its wallet.  By stating that all transactions will utilise OP_DATASIGVERIFY, there is a real risk of users losing their funds if the chain supporting OP_DATASIGVERIFY does not eventually survive.  This same risk would apply to users of any other wallet that also runs the new Bitcoin ABC 0.18.2 client and includes OP_DATASIGVERIFY in their transactions as default after the protocol upgrade and before one chain emerges as dominant.
The Bitcoin SV project is committed to the success of Bitcoin Cash and fulfilling the original Satoshi vision for Bitcoin. Our team members stand ready to answer any questions you may have. Please email with any questions.

Tuesday, October 30, 2018

UK mulls ban on crypto derivatives


The UK's Financial Conduct Authority (FCA) will be holding consultations on a "potential prohibition" of cryptocurrency-based derivatives, in order to protect consumers from risks posed by digital assets.

"[T]he FCA will consult on a prohibition of the sale to retail consumers of all derivatives referencing exchange tokens such as Bitcoin, including CFDs, futures, options and transferable securities," read the policy paper by the Cryptoassets Taskforce, which is composed of the FCA, HM Treasury, and the Bank of England. Not included under the proposed ban are cryptocurrencies classified as securities, which are then to be regulated by the European Securities and Markets Authority (ESMA).

The paper noted that the FCA has already supported ESMA's restrictions on contracts for difference (CFDs) that reference cryptocurrencies, a measure that took effect last August 1.

The report added that the FCA "will not authorize or approve the listing of a transferable security or a fund that references exchange tokens (for example, exchange-traded funds) unless it has confidence in the integrity of the underlying market and that other regulatory criteria for funds authorization are met."

The consultations have been scheduled for some time before the end of the year.

The task force also called for further clarification of general regulations for the cryptocurrency market, expressing similar concerns as the UK Treasury committee in its report released in September, such as price volatility of many virtual currencies.

While acknowledging the benefits of the use of cryptocurrencies, such as increased efficiency of financial transfers and the capacity to raise funds, the task force said, "Evidence of the current generation of cryptoassets delivering any of these benefits is limited and many use cases are unproven at a large scale," leading it to conclude that "in many cases, the risks posed by the current generation of cryptoassets outweigh any potential benefits."

The task force noted that the UK government itself is exploring the use of blockchain technology apart from financial services, having invested more than £10 million for various distributed ledger projects, and creating a £20-million GovTech Catalyst Fund to study applications of the technology for the public sector.

Last year, the FCA had already warned of the risks in investing in CFDs, but without suggesting a prohibition. It also issued guidelines last April affirming its authority over the trade of derivatives.

Hitachi, State Bank of India to develop ‘future ready’ digital payments platform


Digital payments is coming to India, a country considered to be one of the largest cash dependent nations in the world.

This week, Hitachi Payments announced that it has entered into a joint venture with the State Bank of India (SBI) to establish "a state-of-the-art card acceptance and future ready digital payments platform for India."

Under the deal, Hitachi Payments will invest 26% to SBI Payment Services Pvt. Ltd., and will also provide SBI with innovative solutions using its Internet of Things (IoT) platform Lumada.

Hitachi has been SBI's technology provider for card and digital services since 2011. The new partnership between the two companies is going to oversee the development of a nationwide digital payments platform. The platform will be geared towards solutions for ecommerce and mass transit in India integrated with Point-of-Sale (POS) solutions.

Bharat Kaushal, managing director of Hitachi India explains, "India is progressing towards becoming a knowledge economy with technology as the pivot. Hitachi is aiding in the development of India's social infrastructure as well as giving a fillip to the economy. This mutually beneficial partnership with the financial giant SBI will allow us to widen our footprint pan India."

Hitachi's Lumada platform was implemented as the base platform for Mizuho Financial Group, a Japanese firm last year. The Lumada platform functions over a blockchain proof-of-concept (POC) network. Hitachi reportedly has about 55,000 ATMs and 850,000 point of sale (POS) devices under management in India. Hitachi is also a part of the multi-project open source collaborative effort hosted by The Linux Foundation.

On the other hand, SBI is a founding member of BankChain, a blockchain for banking research consortium. SBI has also been developing a blockchain solution since 2017 for managing know-your-customer (KYC) protocols. SBI is the largest commercial bank in India and has a 23% market share of assets market. The bank also serves over 420 million customers and maintains over 6 million POS terminals across the country.

Wednesday, October 24, 2018

Bitcoin Cash Organizations Start Preparing for the November Hard Fork


As the days draw closer to the scheduled Bitcoin Cash upgrade, affiliated organizations are preparing for the hard fork. Data websites like Coin Dance have added statistics for feature support, upgrade voting, and public opinion. Meanwhile, the Nchain-backed SV-Pool has officially announced that its pool is now open to public miners.

SV-Pool Goes Public
The Bitcoin Cash hard fork slated for Nov. 15 is getting closer and network participants are preparing for the upgrade in several ways. On Oct. 22, the mining initiative SV-Pool, supported by Nchain and the firm's chief scientist Craig Wright, announced the pool is now open to the public. This means that Bitcoin Cash miners can direct their hashrate towards the SV-Pool and get paid by an initial pay-per-last-n-shares (PPLNS) system. The pool details it plans to add more payment structures this November. At the time of writing, according to Coin Dance statistics, SV-Pool has been capturing around 2.6 percent of the global BCH hashrate over the last seven days.

According to the pool's recent announcement, SV-Pool says it stands by a "miners' choice, miners first philosophy." reported on the pool's first mined block on Oct. 10 and at the time SV-Pool was using an invitation-only beta period. During that time, the Bitcoin SV team launched its codebase and the Bitcoin Unlimited (BU) team also launched a new client. The latest BU code is prepared for the Bitcoin ABC team's ruleset changes and the team stated on Twitter that SV ruleset compatibility was "pending." BU's plan is to let the miners vote for features by using a system called the BIP135 bits standard.

Explicit Mining Pool Support and Public Opinion
Following the recent announcements concerning new clients and BIP135, the statistical data website Coin Dance has prepared its website for things like explicit mining pool support by proposal and a new politics and public opinion section. The explicit mining pool support section, which seems to incorporate the most important data to most BCH proponents, currently says that "Voting should begin shortly." The politics and public opinion section is a different story as it shows a list of BCH-supporting businesses and organizations revealing specific proposal stances.

As of Oct. 23, there are 15 organizations listed on the page which Coin Dance details is a "weighted community-managed support breakdown by company for each active Bitcoin Cash proposal." The three choices include support for BIP135, Bitcoin SV, and Bitcoin ABC's ruleset proposals. Companies and organizations represented on the list include Bitcoin ABC, Unlimited, XT, Cryptograffiti, Coingeek, Nchain, Coinex, Blockchain Ventures, and more. People visiting this weighted support breakdown can see whether or not each firm supports a certain ruleset proposal. Coin Dance is allowing company submissions and a form can be filled out that requires the organization to be publicly accessible, indicate explicit choices, and source references.

There are only 23 days left until the scheduled hard fork, and so far it is hard to determine how the upgrade will play out, even for those constantly watching and listening to the BCH community. Most BCH supporters are more concerned with the miners' explicit decisions over a weighted community-managed poll system. Miners don't have to run BU in order to vote using the BIP135 bits standard, as they can also set the bits in their block version fields using mining pool software.

CoinGeek-sponsored Bitcoin BCH Miners Choice Summit happens in Hong Kong on November 2


When the August 2017 Bitcoin Cash hard fork took place, it did not really create a new coin. Instead, Bitcoin Cash (BCH) was the rebirth of the original Bitcoin, designed to stay to true to the Satoshi Vision (SV).

With Bitcoin BCH, the roadmap is for massive on-chain scaling by significantly increasing the block size, enabling fast transaction processing, and keeping transaction fees very low. The key BCH developer groups have had some differences about how quickly BCH should scale, and the dangers of developer groups constantly trying to experiment with proposed technical changes to the Bitcoin protocol.

CoinGeek-sponsored Bitcoin BCH Miners Choice Summit happening in Hong Kong

Now we have Bitcoin SV, the new full node implementation for Bitcoin BCH that will restore the original Satoshi protocol, keep it stable, enable it to massively scale, and allow major businesses to confidently build on top of BCH. By trusting the original design of Bitcoin rather than constantly changing it, Bitcoin SV will support global adoption, enterprise-level usage of BCH, and allow miners to earn more longer-term revenue.

To gain more insight about Satoshi Vision, as well as Bitcoin SV and SVPool, miners are invited to attend the CoinGeek-sponsored Bitcoin BCH Miners Choice Summit, taking place at The Harbour Grand Hotel in Hong Kong on November 2.

The dynamic half-day conference will feature the industry's most exclusive guest speakers, including nChain Chief Scientist Dr. Craig S. Wright and nChain Group CEO Jimmy Nguyen, along with CoinGeek Mining's Bob Yuan, one of the most respected mining professionals in China. More speakers will be announced soon.

Recently, Dr. Wright launched his personal initiative—the public Bitcoin BCH mining pool SVPool—to all public miners on the Bitcoin BCH network. SVPool represents BCH miners who support the Satoshi Vision and want to generate more long-term revenue. BTC miners who believe in Bitcoin's original vision are also invited to begin mining BCH with SVPool.

Wright explained: "If you believe in Bitcoin's original vision, you believe in Bitcoin SV and SVPool. For too long, developer groups have repeatedly tried changing Bitcoin. The original Satoshi protocol for Bitcoin does not need to be fixed. It has everything BCH needs to massively scale, support tokenization, smart contracts and other advanced features, and become the only global public blockchain. Just like the Internet has a stable protocol, Bitcoin needs a stable protocol so businesses can build upon a rock solid foundation rather than constantly moving sand."

The CoinGeek-sponsored Bitcoin BCH Miners Choice Summit is an event not to be missed. Seats are limited, so best to RSVP now to to confirm your attendance at this iconic event.

Miners are also invited to take part in the CoinGeek Week Miners Day, happening during the CoinGeek Week Conference in London this November. The SVPool and CoinGeek Mining team will be on-hand to discuss how you can do your part in making Bitcoin BCH realize its full potential. Secure your seat today via Eventbrite for the three-day conference that's shaping up to be the essential Bitcoin BCH conference this fall.

The Bitcoin SV project was created at the request of and sponsored by Antiguan-based CoinGeek Mining, with development work initiated by nChain. The project is also owned by the Antiguan-based bComm Association on behalf of the global BCH community, and the Bitcoin SV code is made available under the open source MIT license.

Thursday, October 18, 2018

Security Giant G4S Offers Protected Offline Cryptocurrency Storage


G4S (LSE: GFS), a security services provider with operations in more than 90 countries, guards everything from cash transfers to nuclear power plants and prisons. The London-headquartered company has now started to offer cryptocurrency protection, according to a recent report.

Secure Vault Storage
The company, which has more than 560,000 employees throughout the world, announced on Wednesday that it has developed a new service providing high-security offline cryptocurrency storage, to help to protect assets from criminals and hackers. And the company is already providing the service to an unnamed European exchange, according to the Financial Times. It charges clients based on the number of different offline storage devices they want to use to store their private keys, and reportedly uses its own existing vaults for the service, rather than newly built facilities.

The company's press statement confirmed that cryptocurrency exchanges are already turning to them for help. Dominic MacIver, senior risk analyst at G4S Risk Consulting, commented: "Our clients approach us to discuss solutions to their requirements because of G4S Cash Solutions' experience in protecting high-value items and G4S Risk Consulting's experience in developing bespoke solutions to complex challenges. Working with our clients, we are continuously applying their expert knowledge of crypto-assets and our best practice in physical security to a sector at the cutting edge of financial technology."

Heavily Restricted Access
The service is said to be more secure then other methods because G4S takes the keys offline, breaks them up and stores them in high-security vaults. Moreover, access to the sites in which they are held is said to be heavily restricted, with multiple layers of security. Clients can only gain access when all of the pieces are combined with specific technology.

"Offline storage has become a more established and secure way of storing crypto-assets," MacIver said. "At the same time, violent robberies and kidnappings in recent years have shown that the sector is still exposed to conventional criminal threats. In collaboration with our client, our security solution is built on a foundation of 'vault storage.' We not only take the assets offline, but break them up into fragments that are independently without value and store them securely in our high security vaults, out of reach of cyber criminals and armed robbers alike."

Bitmain predicted to be knocked from relevance; US tariffs of 27.5% now apply


Bitmain's planned initial public offering (IPO) was already facing significant resistance due to the myriad of issues and controversies plaguing the company. However, the future now looks even less bright, thanks to President Donald Trump.

The ongoing trade war between the U.S. and China will undoubtedly impact cryptocurrency mining equipment. This past June, the U.S. changed the classification of the mining rigs from "data processing machines" to "electrical machinery." Electrical machinery is subject to an import tariff of 2.6%—not unreasonable for any product. However, because of the trade war, the tariff schedule has been updated significantly. Instead of 2.6%, mining equipment manufacturers are now looking at the possibility of paying 27.6%.

Competition in the mining equipment manufacturing space is getting more serious. More than half of Bitmain's business relies on overseas sales. With the increased tariffs, the company will have a difficult, if not impossible, time offering products at prices that can beat those of its competitors.

Some of Bitmain's primary competitors, such as Squire, use chips manufactured in South Korea. These are not subject to the tariff schedule, nor are those produced in Taiwan. This will not only give companies that source products from these countries an edge, but it will also give rise to new competitors who will threaten Bitmain's ability to act in the mining space.

The company even recognized in its IPO filing that there existed the possibility it could be impacted by external forces. It said that its revenue could see declines based on tax rates "due to economic and political conditions." As Bitmain is already losing ground to competitors who are now producing mining rigs that are faster and more efficient, the tariffs could be the proverbial nail in the coffin that brings an end to the highly questionable IPO.

CoinGeek was already prepared for this eventuality, which is why the introduction of Antiguan-based bComm Association's Bitcoin SV (developed by nChain) is vital to the mining community. The full-node implementation software is now available and is quickly gaining favor. Don't just take my word for it—come check it out during Miner's Day at the upcoming CoinGeek Week Conference in London next month.

Thursday, October 11, 2018

A Bitcoin Rat Is Occupying Wall Street


Ten years after the financial crisis of 2008, an artist known as Nelson Saiers has placed his latest artwork across the street from the New York Federal Reserve building in the financial district. The piece is a giant sized and menacing-looking inflatable rat covered in Bitcoin code. The former Wall Street hedge fund manager and mathematician dedicates most of his time these days to his artisan loft where he produces visuals depicting the broken financial system.

A Visual Perspective of Finance and Art
Nelson Saiers giant-sized inflatable rat is covered in bitcoin code and is looking directly at the New York Federal Reserve.
There's some new street art located across the street from the New York Federal Reserve building that's been causing some attention. A tall balloon-like white rat covered in bitcoin code is tied to the ground looking like it's about to attack the structure. Nelson Saiers devotes his energy to artistic pieces that shine a light on the traditional finance system we deal with today. Saiers financial artwork has made headlines over the years after he left his trading position in 2014. 

The 8 ft white rat covered in Bitcoin code staged across the street from the central banker's lair represents an interesting time in history, because it is ten years after the 2008 financial crisis. Additionally, Oct. 31, 2018, marks the tenth anniversary of the Bitcoin white paper published by Satoshi Nakamoto. The inflatable white rat's creator, who is also known as the "Warhol of Wall Street," explained in an interview on Oct. 9 with Shreyas Chari his latest artwork does give a representation of these anniversary dates.  

"So this piece is slightly different from the inflatable rats you see around the city. It's loaded with Bitcoin code and a couple related equations," explained Saiers during the interview.

Saiers adds:  
About ten years ago, while TARP was bailing out the economy, Satoshi Nakamoto wrote this code along with the words; '03 Jan 2009 The Times, Chancellor on brink of second bailout for banks,' referencing the equivalent in England — Satoshi seemed pretty opposed to centralization and said it was doomed in the end. I wanted to be true to his views and reflect this in the artwork.

The Infestation of Sewer Rats
Over the last two decades, street art depicting the world's financial inequalities has become a significant movement globally. The prominent and controversial street artist Banksy has brought the art-form to a new height and the use of rats can be seen on lots of walls covered in graffiti throughout the past two decades.

The rat has been used in financial street art for two decades and has been popularized by the anonymous artist Banksy. Andreas Antonopoulos has also referred to Bitcoin as a "sewer rat." 
Banksy himself said the rat is something to look up to because these animals do whatever they want. "If you feel dirty, insignificant or unloved, then rats are a good role model. They exist without permission, they have no respect for the hierarchy of society," the artist explains in his writings. The innovation of cryptocurrency itself has been depicted as an uncaring 'honey badger of money' or anarchistic street rat many times over the years.  

In 2016 the computer scientist Andreas Antonopoulos referred to the Bitcoin protocol as a "sewer rat of currencies."       

"Bitcoin isn't living in a bubble — Bitcoin is a sewer rat," Antonopoulos detailed during his speech. "It's missing a leg. Its snout was badly mangled in an accident last year. It's not allergic to anything — In fact, it's probably got a couple of strains of bubonic plague on it which it treats like a common cold. You have a system that is antifragile and dynamic and robust."

Bitcoin Street Art Isn't Going Away Anytime Soon
Over the last two years or so Bitcoin and street art have melded together and many artists have been using the cryptocurrency for symbolism on walls. In Paris, France there's an artist named Pascal Boyart aka "Pboy," who leaves his cryptocurrency themed art and QR code on buildings throughout the city. The artist Cryptograffiti has made a name for himself as he spreads his Bitcoin-infused art across various cities within the US.

Bitcoin street art by Pascal Boyart aka 'Pboy.'
Saiers latest artwork and the many other artists located around the world shows there's a growing trend of mixing visually entertaining financial and political symbolism with cryptocurrencies. The artist's Bitcoin rat, however, is not permanent and Saiers has plans to remove the inflatable after the display.

Russian crypto exchange YoBit advertises pump scheme


Russia-based cryptocurrency exchange YoBit has announced a scheduled pumping of coins selected at random.

In its tweet, YoBit gave no specific reasons for its action, wherein "we will buy one random coin for 1 btc every 1-2 mins 10 times (total buy amount – 10 btc)." The exchange, which lists thousands of altcoins, also provided a timer 22 hours prior to the trades. As of this writing, there are six hours left before execution of the scheme.

We can only wait to see the effect on whatever coins are selected, but the tweet is notable for its unusual nature. Usually, when an asset is bought in the hopes of spurring demand from other investors, it is done more discreetly, so as to sell at a peak.

Last February, the U.S. Commodity Futures Trading Commission (CFTC), which has classified cryptocurrencies as commodities under its jurisdiction, had already warned the public of pump-and-dump scams, saying, "As with many online frauds, this type of scam is not new-it simply deploys an emerging technology to capitalize on public interest in digital assets." It remains to be seen, however, how regulatory agencies will react, given the forthrightness of the exchange.

Commenters on the YoBit tweet expressed disbelief, amusement, and outrage, as well as cluelessness. Several users on reddit have confirmed the existence of e-mails sent by the company, with address, indicating that the exchange had not been hacked.

Already, trading platform Coinigy has tweeted its plan to delist YoBit from its network of cryptocurrency exchanges, "due to overwhelming negative experiences as documented on social media and forums, among other reasons." However, it said it would be "asking for feedback first. As a popular platform in the crypto trading space, it is essential for us to be diligent and not promote sites that may harm our users."

YoBit has been operating since 2015.