Monday, September 5, 2016

Yours Wants to Take Bitcoin Mainstream by Targeting Non-Bitcoin Communities

 

Former Reddit Cryptocurrency Engineer, Ryan X. Charles, is currently working on a new, bitcoin-powered social network, but he isn't focused on creating something that will only be used by the Bitcoin community. In a recent interview on Epicenter Bitcoin, Charles noted that creating an app used by a mainstream audience would have much more value than simply creating /r/Bitcoin with micropayments.

Charles's new platform is called Yours and the main goal is to create a way for content creators to get paid for their digital content directly from their audiences. Although he used to work at Reddit, Charles has noted that Yours is not simply a decentralized version of that social media platform.

Finding a First Non-Bitcoin Community for Yours

During the interview, Charles made it clear that Yours is currently searching for the first key community or demographic that the platform should try to attract. "I'm sort of vague about this now, but who are our core users?" he questioned. "What is community number one here?"

The reason Charles is somewhat vague on this point is because Yours has not yet identified the community that they should target first. Although many people within the Bitcoin community have heard of Yours, this is very much an unknown project among the general public and even among the general tech community.

Some think it would make sense to first focus on the Bitcoin community as a core batch of users, but Charles was quick to dismiss this idea. "If we made Reddit but with Bitcoin, I bet Bitcoin users would use it; however, I don't think it's in anybody's interest that we do this first." said Charles. "Bitcoin users would probably most benefit from it if we create something mainstream."

"Everybody in the Bitcoin space wins if we start servicing people outside the Bitcoin community," Charles added.

Charles's argument is essentially that they'll learn much more about what they're building if they go after a community that is unrelated to Bitcoin. This way, Yours will be better able to understand whether they're solving a real world problem or just creating another Bitcoin community forum. By going this route, Yours will also be able to ensure that their platform is not so complex that it can only be used by bitcoiners.

"I think it's really important that we identify one community to be our core audience [who] are not already Bitcoin users," concluded Charles.

The Manga Example

Manga was the one area of interest that Charles brought up as an example of a community that may be interested in using Yours. "I'm not a big manga fan, but there are a lot of reasons why we think that audience might be good for us," he said. "They're really sort of young, sophisticated people that create manga, which are Japanese comics, and there are huge communities of these people . . . They're creating content. They're not really able to monetize this in any way, but if they had a way to monetize it, they would love to do this full time."

Charles went on to explain that Yours could target the manga community by telling them they can earn real money by creating and discovering new, quality manga. He added that Yours could make sure that their product gave the manga community all of the tools they need to easily post and earn money from their art.

"I don't want to say that manga would necessarily be the first user, but something like that," added Charles. "It's a niche community. It's outside of Bitcoin. Not everyone likes manga, but the people that do like it really like it."

Onboarding New Bitcoin Users via Yours

One last point on the mainstream adoption of Bitcoin and Yours that was discussed on this episode of Epicenter Bitcoin was the issues involved with onboarding new users to this decentralized payment system. "It's still kind of difficult to get [bitcoin]," said Charles. "Wallets have improved a lot over the years, but they're still kind of technically sophisticated."

In the past, traditional online payment options have also had to deal with this onboarding issue. In the case of PayPal, they handled it by literally paying new users to join their platform. "That is not out of the question for us," Charles said, regarding PayPal's strategy. "If we raised a bunch of money, we could do that . . . I don't think we necessarily have to do that though."

It should be noted that those who wish to create or view content do not need to have any bitcoin to use Yours. The use of bitcoin is only required when a user wishes to support someone else's content via a payment.

Charles also mentioned the Coinbase Buy Widget as another easy way to onboard new Bitcoin users. The widget allows users to instantly purchase up to $5 worth of bitcoin per day with limited Know Your Customer restrictions.

"You just have to make it fluid for the users to get on and off," said Charles.

Back to School: Blockchain Education Network to Host Global Bitcoin Airdrop

 

This September, blockchain hubs across North America will be giving out bitcoin to begin the next school year. Over a dozen regions including New York, San Francisco, Chicago and Boston in the United States and Toronto, Montreal, Vancouver and Ottawa, in Canada, are preparing their events. The giveaway, known as a Bitcoin Airdrop, has become a yearly tradition on university campuses.

The bits are to be given to students who come out to their local blockchain club's first meeting. Students will also be introduced to concepts about bitcoin and the blockchain through their peers and a demonstration of a wallet creation and transfer.

History of the Airdrop

The first airdrop was hosted in 2014 by the MIT Bitcoin Club, after the club raised $500,000 worth of bitcoin to give to each incoming freshman. The event was then replicated in 2015 in Montreal by the McGill Cryptocurrency Club during their school's frosh week, with donations given to the club. The Blockchain Education Network is now expanding the initiative throughout their network of regional hubs.

Why an Airdrop?

An airdrop allows people who would otherwise never have heard about bitcoin to try out using their first bits with their friends in a setting where their questions can be answered. Even if a student downloads a wallet and sells the bitcoin, they discover how easily it can be exchanged for fiat currency and would be more open to receiving bitcoin as payment at a future time.

Focus on Education

The Blockchain Education Network (BEN) believes that the blockchain revolution must happen through education. Most people are still unfamiliar with what digital currencies and the blockchain are, though almost everyone is curious when they first hear about it and want to learn more.

Bitcoin and blockchains are technologies with broad socio-economic impacts, which means that different parts of the world will have a different perspectives on it. BEN organizes as a swarm, a decentralized organizational model, to ensure that the education presented at each meeting is relatable to the region.

A Crucial Grassroots Movement for Students

BEN is comprised primarily of students aged 18-25 and the group believes that it is especially important for this demographic to be able to experiment with these technologies. The world is quickly moving into a sharing economy where people can operate remotely and companies have access to a global talent pool. Students will all enter the workforce after graduating and must be familiar with new technology.

Each year, the leadership from a university club graduates and must be replaced by the incoming class of students. Doing an airdrop at the beginning of each school year ensures a strong interest in blockchain technology and many new students joining the blockchain community in every region that participates.

In addition to the airdrop, BEN has an entire Fall 2016 initiative to bring new students into the blockchain ecosystem including a Blockchain Olympics event in October and a Blockchain Startup Gauntlet in November. BEN also hosts and promotes hackathons for students with a variety of skill sets, and assists students who are interested in attending bitcoin and blockchain conferences.

Future Implications

This initiative has become a tradition that can scale as wide as its reach. 500 students receiving bitcoin this September may not change the world; however, each year showing a new group of motivated university students how this technology works may cause a ripple effect of education that reaches farther than our expectations.

In our view, the "blockchain revolution" isn't so far fetched. This is a technology which better maps to our worldviews after having grown up with the internet. It has taken 25 years for the internet to move from creation to our pockets. Through this historical lens, we see any current shortcomings of blockchain as an opportunity for our generation to solve.

Friday, September 2, 2016

Bitmain Is Launching a Silent Miner and PSU to Bring Mining Back Home

 

Beijing-based Bitmain Technologies Limited, owner of the Antminer series of bitcoin miners, Hashnest,

Antpool and BTC.com, is launching early next week the world’s most silent multi-terahash bitcoin miner

and a silent 2600W PSU specially designed for high-performance mining.

 

The Antminer R4 uses the world’s most power-efficient 16nm BM1387 ASIC chip for bitcoin mining. It can

deliver a hashrate of 8.6TH/s with a power efficiency of 0.1J/GH and a noise level less than 50dB. At an

ambient temperature of 35°C, the R4’s noise level is 52dB.

 

The Antminer R4 has been designed with great care to ensure the least possible sound with the maximum

hashrate. It replaces the traditional miner fan with a rotary blade system inspired by the fan of a silent

split air conditioner. The speed of this unique fan is automatically controlled to ensure that it never

produces more sound than is absolutely necessary. The slim design of the Antminer R4 allows it to be

conveniently placed in a book rack or computer table at home.

 

The APW5 power supply is compatible with the 220V as well as the 110V mains power supply in North

America. On full load, it has a power factor greater than 0.95. With a 220V supply it can deliver an

output of 2600W. It comes with seven 6-pin PCI-e connectors but can easily be fitted with 14 or 20 PCI-e

connectors. It is built for high-power performance and low noise. Like that of the R4, the APW5’s fan is

automatically controlled so it only produces as much sound as is absolutely necessary.

 

For home users who wish to utilize R4’s exceptional noise level with the optimum performance, Bitmain

highly recommends that they use it with Bitmain’s APW5 power supply.

With the release of these products, Bitmain hopes to bring bitcoin mining back to homes and continue

decentralizing the bitcoin mining network.

Thursday, September 1, 2016

'Settlement Coin' is All About Banks, Not Blockchain

 

Why would anyone want to use a coin issued by four large banks bailed out in 2008?

That's a question that many are asking after UBS, Deutsche Bank, Santander, BNY Mellon and ICAP announced last week that they had teamed up with blockchain developer Clearmatics to create a new digital currency. In a joint press release, the new consortium said that the "Utility Settlement Coin" would be used to clear and settle financial market trades on a blockchain.

But while it would be easy to see this as an alternative means of settlement using a private currency owned, issued and backstopped by the members of the consortium, that's not what the consortium is planning.

From the press release, here is Clearmatics CEO, Robert Sams:

"Cash is a leg to almost every trade, so this project is key to unlocking the benefits that the industry can gain from distributed automation technology in clearing, settlement and collateral management."

This explanation is less than clear, so let me translate. The consortium aims to speed up central bank settlement processes and reduce the need for banks to maintain expensive collateral to meet short-term liquidity needs in real-world currencies, so that banks can increase the frequency of trading and make better use of capital.

Instead of waiting to receive real-world currency via a central bank real-time gross settlement (RTGS) systems, banks could simply issue Utilities Settlement Coins to meet their obligations and carry on trading.

Of course, as Hyman Minsky said: "Anyone can create a currency, the problem is getting others to accept it."

Not so ambitious

Why would other market participants accept a coin magicked into existence by a large bank in final settlement of an obligation in real-world currency? Well, they wouldn't, of course – unless the coin was issued and backstopped by a central bank.

So, the consortium proclaims that the new coin will be CENTRAL BANK money.

Hyder Jaffrey, head of strategic investment and FinTech innovation at UBS Investment Bank, said:

"Digital cash is a core component of a future financial market fabric based on blockchain technologies. There are several digital cash models being explored across the Street. The Utility Settlement Coin is focussed on facilitating a new model for digital central bank cash."

But which central bank? Could this mean the establishment of an international digital clearing union, with a digital international settlement currency independent of any country, replacing the US dollar and decapitating the global ambitions of the IMF's SDR? Could the Utilities Settlement Coin become Keynes' bancor, in a form of which he never dreamed?

Although, the fact that this new international settlement currency would be native to a private blockchain owned by a consortium of large banks might give us pause for thought. UBS, Deutsche Bank, Santander and BNY Mellon would effectively become the world's central bank.

Sadly, this scheme is not so ambitious.

Buried in the press release is this:

"USC is a series of cash assets, with a version for each of the major currencies (USD, EUR, GBP, CHF, etc.) and USC is convertible at parity with a bank deposit in the corresponding currency. USC is fully backed by cash assets held at a central bank. Spending a USC will be spending its paired real-world currency."

So there would not be one single global Utilities Settlement Coin, but multiple coins. Each real-world currency would have its own Utilities Settlement Coin, with which it would be exchangeable at par.

Banks would deposit real-world currency at central banks and create an equivalent quantity of Utilities Settlement Coins for that currency.

Goodbye, bank reserves; Hello, Utilities Settlement Coin.

The backstop

But this simply replaces one electronic reserve asset with another. So what is the point? This is where the blockchain comes in.

Bank reserves can't be used for settlement on a permissioned blockchain: they can only be used for settlement via a central bank RTGS system. In contrast, our Utilities Settlement coins – we assume – would be used for settlement on a permissioned blockchain collectively owned and managed by the consortium. A private settlement system for real-world currencies, effectively backstopped by central banks.

Now, why would this arrangement be of interest to a bunch of banks? What advantages would it give them over existing central bank RTGS systems?

The first advantage is speed. Since central bank RTGS systems use double-entry accounting, settlement is instantaneous, no blockchain verification protocol could possibly match the speed of a central bank RTGS system where both sending and receiving banks have accounts. But, RTGS systems are merely the core of settlement processes that can take days to complete.

There is a legacy of delays from the days when processes were manually-intensive and banks and brokers could earn interest on money sitting in clearing. Now, they no longer need an army of clerks to process settlements, and in these days of negative interest rates, clearing delays are more likely to cost them money. No wonder they want to speed things up.

However, getting industry-wide agreement on moving to same-day settlement is like pulling teeth (even moving to T + 2 has taken years to implement). So, it looks like our consortium banks want to take matters into their own hands. Blockchain gives them a technical excuse to bypass the existing moribund processes.

There is another reason, too. Reserves and collateral are low-yielding assets that clog up bank balance sheets. Banks would really like to find a means of settling without having to pledge collateral at central banks. In fact, ideally they would like not to have to use central bank money at all.

So, although the Utilities Settlement Coins would be backstopped by central banks, once the majority of banks agreed to accept the Utilities Settlement Coins (aka joined the consortium), the banks could simply dispense with central bank money.

As Matt Irvine at Bloomberg points out:

"But for many purposes – for example, just doing more transactions with other banks – the pseudo-dollars are just as good as dollars. If every bank signs on for this, then they can go out and buy more securities with their pseudo-dollars, and rarely need to bother with the Fed."

Until, that is, everything started to go wrong, when banks would once again claim the Fed's backing.

After all, these are central bank coins, aren't they? And by that time there would be FAR more of them in existence than cash assets backing them. This is how fractional reserve banking develops.

So, this is not fundamentally a story of cool blockchain technology superseding ancient creaking central bank processes. No, it is a story of banks trying to circumvent the capital and liquidity regulation that aim to prevent market freezes and bailouts such as happened in 2008.


Blockchain Startup Symbiont Adds Ex-Morgan Stanley Director

 

Former Morgan Stanley managing director Caitlin Long has joined blockchain startup Symbiont as president and chairman of the board.

The New York-based blockchain firm, which is seeking to advance capital markets blockchain applications in syndicated loans and OTC derivatives, announced the hiring today. With the move, Long brings expertise honed during tenures at both Morgan Stanley and Credit Suisse, including time spent on the former firm's distributed ledger working group.

In statements, Long revealed she has also completed an undisclosed investment in Symbiont as part of its still-ongoing Series A, first rumored in early 2016. Further, she used the platform to promote what she believes are the strengths of the company's technology.

Long wrote:

"Ours is the only smart contracts platform that was purpose­built for institutional financial markets. We're ahead of our peers in the race to build production-­ready software, because it's already going into production."

Overall, Long sought to position the company as one that is currently able to offer a working smart contracts platform, scalable blockchain technology and a team that is capable of executing on strategies in line with those of enterprise firms.

Founded in 2014 by CEO Mark Smith and Counterparty creators Adam Krellenstein and Evan Wagner, Symbiont has so far raised more than $1.25m in funding and boasts more than 10 employees.

Its most notable announcement came in May of this year, when it revealed it was working on a pilot project with the state of Delaware.

Wednesday, August 31, 2016

US Health Department Selects 15 Blockchain Research Contest Winners

 

 HHS, Health and Human Services

The Office of the National Coordinator for Health IT (ONC), a division within the US Department of Health and Human Services (HHS), has announced the winners of a blockchain research paper contest.

The "Use of Blockchain in Health IT and Health-related Research Challenge", announced last month, solicited white papers that would explore how the technology can be potentially used in healthcare settings.

The ONC said that it received over 70 submissions, and that it ultimately chose just 15 to spotlight.

National coordinator Vindell Washington said in a statement:

    "We are thrilled by the incredible amount of interest in this challenge. While many know about Blockchain technology's uses for digital currency purposes, the challenge submissions show its exciting potential for new, innovative uses in health care."

At the time it announced the contest, HHS indicated that it was weighing blockchain tech as part of a broader push for interoperability in the country's healthcare IT systems. The ONC has been pursuing this line of inquiry for the past several years, releasing a report last October on this goal.

HHS, along with the Department of Defense and the Department of Homeland Security, are among the major US agencies looking into the technology.

The ONC is set to host a blockchain-focused workshop to be held at the National Institute of Standards and Technology (NIST) between 26th and 27th September.

UNTRACEABLE CRYPTOCURRENCY MONERO IS BOOMING

 

The value of Monero has more than tripled in the last ten days moving from around $2.47 to $8.10 as at the time of this publication.

Described as the new digital currency that online drug-dealers have started to adopt because it enables them to conduct business with more anonymity, the price of two-year-old Monero skyrocketed lately, driven by the announcement of several darknet markets to accept Monero as payment.

 

AlphaBay, one of the most popular sites for buying drugs like liquid LSD and hybrid cannabis, said last week it has partnered Oasis to begin accepting Monero on September 1. This led to increased media coverage, attracting more speculators towards the currency.

Whether the factor behind the quick rise is solely due to darknet markets’ adoption is unknown. However, with the report by RAND Europe that says illegal drug transactions on cryptomarkets have tripled since 2013, with revenues doubling, it couldn’t be far from being a major factor.

 

The research institute names vendors who indicated they were operating from the U.S. as having the highest market share of drugs (35.9 percent of total drug revenues) followed closely by the U.K. (16.1 percent), Australia (10.6 percent), Germany ( 8.4 percent) and The Netherlands (7.1 percent) revenue share. Another factor that could have contributed to the rise is the growing efforts to decriminalize Bitcoin use which may have shifted attention from the top cryptocurrency. A group of researchers two weeks ago announced the creation of an analysis tool for US law enforcement that can be used to overcome the challenges of criminals using Bitcoin for transactions. Sandia‘s work focused on law enforcement’s most immediate need to reduce the time and resources necessary to trace illicit commerce.

 

Trading in Monero has also increased with exchanges such Poloniex recording more than 1,300 Bitcoin worth of its trade in 24 hours.

The growing interest has also drawn the attention of wallets. Bitwala recently added it to the list of accepted Altcoins and Cryptocurrencies for its users to pay bills, send out international bank transfers and use it to top up their debit card.

Monero aims to be a secure, private and untraceable cryptocurrency. It was created in April 2014 as an open source project and is currently maintained by seven core developers, the most prominent fabulously calling himself “Fluffy Pony”.

The main differences between Monero and Bitcoin are its default use of stealth addresses and ring signatures, obfuscating most transaction data like sender, recipient and payment amount. By implementing these features, the currency offers its users full transaction anonymity.

 

Unlike Bitcoin forks, Monero is based on the CryptoNote protocol whose transactions cannot be traced through the blockchain to reveal its sender or receiver.

Bitcoin has its pseudonymity which enables its users not to be obliged to disclose ownership of bitcoins. However, given the transaction history and data that Bitcoin users have disclosed about themselves, it may be possible to recover information about particular bitcoins.

 

The market values of Bitcoin and Monero are also different. Despite its spike in price, the low rate of Monero is still affordable for interested users when compared to Bitcoin’s which has gone large scale and pierced into conventional financial system to be eyed by investors.

Monero may not be able to sustain the momentum when compared to bitcoin which has outgrown several phases. A  further growth in the adoption of Monero may draw greater regulatory measures that won’t augur well for the future of cryptocurrencies in general.

EU Parliament Rep Seeks €1 Million for Blockchain Research

 

A member of the European Parliament is proposing that €1m ($1.1m) be spent on a task force that would focus on studying digital currencies and blockchain technology.

The push for funding comes months after the legislative arm of the European Union (EU) first approved the task force, proposed by MEP Jakob von Weizsäcker earlier this year.

Legislative records indicate that von Weisäcker is now asking for financial support for the measure. In notes, he said that support should be approved in order to position the European Commission – the economic bloc's executive branch – at the forefront of an emerging technology.

 

The MEP wrote:

"This pilot project aims at creating a Task Force, staffed with regulatory and technical experts, in order to build up technical expertise, regulators capacity and develop use cases, especially for governmental applications, in the field of distributed ledger technology (DLT) as proposed in the Resolution of the European Parliament on virtual currencies."

 

The task force initiative is one of the more notable legislative efforts to emerge from Europe on the subject of blockchain, as it is expected to focus on the developing government use cases.

In legislative records, von Weisäcker reiterated past statements about the task force's potential role in creating a balanced regulatory environment.

"Too early hard regulatory measures would stifle innovation and hamper its potential," he wrote. "Waiting too long might lead to a materialization of (systemic) risks."

 

Wednesday, August 17, 2016

 
Bitcoin has certainly been one of the most audacious financial experiments in the last century. While governments have tried everything from pegging currencies to Gold, a basket of foreign countries and repeatedly meddling with monetary policies, none of them have been able to perfect sustaining base unit value and continuous growth. Additionally, although globalization has bought the world together and helped us interact far faster in terms of trade and investments we have barely been able to brings its benefits to people from all walks of life. Bitcoin, for the first time was able to remove government set barriers and empower individuals to trade and remit money without middle men eating through the fruits of their labour. During its meteoric rise from hacker currency to the love child of innovators, inventors and investors alike the coin has undergone a turbulent period with its founder eventually disappearing from the public. A coin that was once traded by the pennies soared upto thousand+ dollars then crashed to as low as 180.

For all the benefits Bitcoin bought along with it - it bought along paranoia, hysteria, volatility, market manipulation, losses and for an elite few- massive profit. Bitcoin's rise has been meteoric but it does not solve all the monetary problems we face in the 21st century. There have been a number of similar currencies launched in the recent past in order to solve various issues through the Blockchain. Ethereum - the second most common currency on a blockchain permits smart contracts or programmable currency in simpler words. There are other currencies that permit storage of files, reward prediction markets or even possess stakes on the potential profits of a gambling house.


Xaurum a coin that has been recently launched aims to solve one of the most crucial economic problems through a smart approach. To put it in simple terms - the coin like some others in the industry (digix)  permits you to hold rights to Gold on a blockchain. The organization behind the coin - Auresco Institute aims to hold gold as a commonwealth or a conglomerate of holders at a secure location in Europe. This is a rather logical approach to financial security as the tokens one purchases on this blockchain will be physically backed at a central location in Europe and the gold that is under the organization’s holding would be verifiable and shippable as and per requested. The coin will be able to witness an increase in its price as the base value increases and thereby will witness an upward slope in price without being heavily dependent on user adoption alone  This is a revolutionary value of store in economies where conventional forms of banking do not offer security due to the national monetary policies and hoarding large amounts of gold becomes unsafe due to lack of security. This opens a whole new world of opportunities for individuals willing to take the risk of acquiring Bitcoin from local resources.

There are a number of perks to this approach.

  1. Limited Coinage

    Since the number of coins that will be released will be limited to the amount of gold that can be held, there will be anti-inflationary nature to the coin from day 1. Additionally, since the coin is anti-inflationary in nature, as more and more individuals buy into the coin, the price will slowly rise in value
  2. Utility

    While bitcoin itself is a token subject to market fluctuation and commonly agreed notions of what its price should be, the coin offering here is relatively less volatile as its offering is with Gold. This means, a traditional business seeking payments in heavy amounts could hedge its position with gold while being able to access the quick and easy remittance availability on a blockchain. While Bitcoin start-ups have struggled with adoption, this currency could rather easily pick up steam

  3. Seignorage

    The founders of the organization believe the only true way for  a monetary system to actually be beneficial to all parties is through seigniorage and this lies at the crux of what the organization does. Instead of permitting banks to be the sole players benefitting from the issuance of currencies and their base value, the organization is paving ways for this to be a more democratic process - one that is accessible to anyone with access to the internet. Additionally it is a major socio-economic experiment that is being run for a while now with a strong user group backing it.


Capital flight has been at the crux of a large number of political debates ni the recent past. Even Brexit could be attributed towards the currency outflow from Britain towards Europe. During the world war, it is believed Gold retrieved from the jaws of the jews were molted and made into bars and saved in order to insure the nation’s economy from a potential decline. Rules and empires have been built on top of gold and in order to question their authoritarian regime  an economic system scripted to question their very basics are needed. I believe Xaurum is positioned to provide exactly this. For a migrant labourer in the middle east looking to save his income from taxation, or an individual in Africa risking loss of his currency to thugs in the streets - xaurum offers a safe alternative. In a way, I see it being the Swiss bank of the 21st century.
Xaurum is a unit on the golden blockchain. It represents an increasing value in gold and is exchangeable for it. The main function of Xaurum is the storage and increase of value, it is founded on the assumption, that the most important systemic function of money is a fair distribution of the profit of money creation - seigniorage. For this reason Xaurum was the first cryptocurrency that has its commonwealth, the store of value for all its users. Commonwealth value is stored in gold reserves of 1g, so that every user of Xaurum can exchange his or her xaurum for gold at any time. While similar, in gold standard the ratio between the representation of gold and gold is fixed, this makes the currency inelastic and bad for the economy in a recession. Xaurum makes this ratio dynamic, so that it can increase, but can not decrease increasing the buying power of each Xaurum and uses the elastic difference between its gold base and market price to adjust to current supply and demand.


Xaurum's ratio to gold is not fixed, but can only increase, this enables that its price and base value are both different and known (perhaps BTC should be seen as a combination of BTC the digital commodity and BTC the currency, two distinct things, connected in a system in a way only the latter is known and determined on the market, while the costs of mining are at least partly obscured). This difference between price and base value is used for profitable inflation, that at the same time increases the gold reserves and consequently the base value of all existing xaurum and the individual creating new money supply. For example, 1 xau = 500$, and backed with 2g (100$ in value), the miner/minter pays more than 100$ in gold to the commonwealth and creates a new xaurum for less than 500$, the commonwealth profits in gold, he profits in price difference. This would soon collapse the value to the value of the base value, if there were no counter-measures. To prevent this Xaurum uses artificial scarcity and the consideration of past market demand (if for example, new xaurum were coined when price was 400$, they would not be coined for less, as we take the lower price to mean the demand was over-represented).

What I loved about Xaurum was their transparency in conversation and their long history within the community. I could sense a strong sense of belongingness by people towards the coin. Additionally the people behind the coin have been open towards rectifiying their mistakes from past learnings. A good proof of this is their willingness to make the coin divisible by 8000 and the change of their ticker. This move makes the coin more inclusive of possible new users. The team’s sound understanding of the economics behind the project and professionalism in their communication stood out throughout my interaction with them.

However, in light of the number of Scam ICO”s the community has seen in the recent past it becomes imminent to tread with caution. While the underlying technology, economic brilliance and pragmatism makes sense and does offer the average man from any corner of the gold access to Gold on a ledger, its implementation can be tricky. For instance, the total reserve of gold held by the institute is not verifiable as it is now. Additionally, the project fails to take into account the laws and legal procedures involved in shipping gold internationally. Customs, verification requirements and additional legal scrutiny in the event of someone looking to do a withdrawal could add delays to the process and make buying gold the conventional way seem more appealing.  

A possible solution for the organization is to set up hubs around the globe from where gold could be shipped easier and much faster.  While this would mean the organization has to take the added strain of finding reliable centers around the globe it offers a certain level of globalization and quicker access to the individual’s gold. Additionally, services that certify the amount of gold held in reserve and their purity in real time could be implemented into the project. With a strong advisory and increased transparency the project has the potential to question how we wee monetary systems.

Tangibility of gold and the transparency and speed of a blockchain coming together is just about every economist’s dream and Xaurum is taking us one step closer to that grand vision. While the system has its own bit of inherent flaws, all of them are the kind that can be worked out over time. The bright side is, the team behind the coin has worked on it for a fair amount of time and has the power to implement changes as and when required. As long as they hold true to their promises, things could change for the better. I have my eyes on the coin simply because of the economic understanding behind it and look forward to covering it further in the near future.


CCEDK Exchange

 

The launch of Bitcoin in 2008 was more than just an experiment in the financial realm. It was a
silent outcry against the injustices committed by the financial elite leading to the recession,
scripted in code. Satoshi’s creation laid the foundation for what would soon be the world’s
financial future. Unlike earlier, it wasn’t restricted to royalty or the elite to decide how this new
financial system would work. Rather, emperors of the new world, the innovators, entrepreneurs
and developers with the know how to build upon the blockchain were the ones that pushed this
new system to the frontier. Inspite of the massive attention given to it by the media, Bitcoin is
predicted to only have around 5 million users, by 2019. Considering a global population of 7
billion, and an unbanked population of 5.5 billion, this level of penetration will barely make a
dent in the financial realm. With an intent to solve these problems of market penetration and
creating products that are user friendly on the blockchain a new generation of entrepreneurs
have come forth with solutions that work faster, cheaper and at better levels of scale.

CCEDK in collaboration with Beyond Bitcoin have launched btstip.io with the intent of bringing
expriences on the blockchain to the average retail user. The company’s goal is to create product
offerings that are easy to use for internet consumers around the globe. Leveraging the speed of
Bitshares Blockchain which is able to process transactions at 60,000 transactions per second
and the relatively low transaction fees, which runs at 1/4th the fee of Bitcoin, the new system is
able to empower users and enterprises to experience what it feels like to remit via the
blockchain without having to go through the nuances of utilizing a bank or a bitcoin exchange. In
the first iteration of the product, the Tip Bot empowers existing users of the cryptocurrency
community to disperse digital tokens to individual contributors or groups on varying platforms
such as forums, reddit, twitter and facebook. In comparison with Bitcoin confirmation times that
take anywhere between ten to thirty minutes, the new system paves way for a large amount of
user cases by confirming transactions in a matter of seconds.

By creating active integrations with various social media platforms and empowering enterprises
to disperse digital tokens to the retail consumer, brands will now be able to reward consumers
directly for certain behaviour. The platform intends to bring the power of sharing economies and
social media into the age of digital, decentralized currency. While social media has empowered
people around the globe to share their thoughts, photos and lifestyles with anyone across the
globe, it is yet to help us come closer financially. Systems are still largely restricted, either due
to lack of an infrastructure or stringent fees imposed by banks upon international remittance.
The new platform, allows anyone with say, a facebook, reddit or twitter account, finding a post to
be valid to tip the author without having to go through a bank at a fraction of the cost. Similarly,
instead of paying advertisers hefty amounts, the new system allows enterprises to issue tokens
or financial rewards directly to the end user for following certain behaviour.

The core system at btstip.io will be drastically different from existing tipping systems as a result
of its close integration with CCEDK and it Nanocard. As a result of the nanocard, users will now
be able to “withdraw” the amounts they have received in terms of tips at any local ATM across
USA and Europe. This further enables the company to create a dent (albeit minor initially) in the
remittance market as freelancers, artists and individuals will now be able to charge money for
their work and withdraw it from their banks without having to go through multiple loops and third
parties. The system itself is built upon one of the most transparent exchanges in the world,
touted to be a “truly” decentralized system, open and auditable to anyone in the world openledger.
info

Although, the short term implications of the product are largely focused on empowering the
average user to experience the blockchain, the long term goals of the company are to create a
dent in the way money in itself is remitted around the globe. With a key focus on
microtransactions
and remittance, CCEDK, the banking partner for the project is working
towards creating a global banking infrastructure to enable individuals to convert their digital
takens to fiat and vice versa. The company intends to go beyond just tipping and evolve into pay
gateways, mobile remittance, ingame
economies and music.

In an age that believes money is power, digital currencies have lead the frontier when it comes
to giving it back to the people. While democracy and free speech have empowered individuals
to practice their rights and choices, restrictions in the financial realm have largely stopped
capital inflow to places that could truly use it. The founders of the system, believe, they can
change the situation by slowly building upon the product. While looking at any of the innovations
that truly changed the globe, it becomes evident that they were able to make a dent, solely
because they were created to be of use to the retail consumer. Projects like these, are an
attempt to truly take the power of decentralized currency to the average joe.

Friday, August 12, 2016

Anti-Money Laundering Software to Help Banks Prevent Illicit Transfers

 

A pair of entrepreneurs has developed a solution to help banks reduce the risks involved in remittances. Route Trading Ltd., launched by Musa Jammeh and Taimoor Iqbal, will introduce Money Router, a software solution, to London, U.K. banks to prevent illicit money transfers.

Money Router, to be introduced in September, is designed to improve the safety of global payments, enabling financial institutions to set parameters in accordance with anti-money laundering and anti-terrorism financing regulations.

Developed in London by a team led by a compliance officer employed at a major U.K. bank, and a tech entrepreneur with a background in money transfer, Money Router is designed for both banks and money service businesses (MSBs).

The banks need to monitor the money coming into their accounts from the MSBs customers. By integrating the bank accounts with the money transfer system, banks can manage the end-to-end anti-money laundering (AML) compliance of the money transfer transactions in one place. They can achieve this by using regularly updated and compressive AML databases and regulatory registers such as the FCA Payment Services and HMRC Money Services Business registers.

Overseas workers often transfer part of their earnings to families abroad. As migration has increased worldwide, the total value of these "home remittances" to emerging economies has doubled that of direct foreign aid. But since much of the sector is unregulated, it has been linked to money laundering and terrorism.

Banks Are Constrained
Banks, fearful of fines, have been missing out on significant revenues and contributing to financial exclusion by exiting the remittance sector for the following reasons:
1) Inadequate visibility over MSB activities of transferring money on behalf of their customers;
2) Lack of anti-money laundering (AML) monitoring systems to deal with MSB on-boarding and real-time transaction monitoring;
3) Increased regulatory emphasis on the risk-based approach to AML monitoring;
4) Lack of awareness among MSBs about money laundering regulations and techniques used by criminals to launder money in the remittance industry;
5) Terrorist attacks by returning Islamic State fighters.

R3, 15 Consortium Members Complete Prototypes on Using Smart Contracts for Trade Finance

 

The R3 consortium has disclosed that it has worked with over 15 of its member banks to complete two distributed ledger technology prototypes. They demonstrate how the technology can address the key challenges facing the $45 billion global trade finance industry.

R3 is a financial innovation firm that leads a consortium partnership with over 50 of the world's leading financial institutions. These prototypes validate distributed and shared ledger technology as a faster, more reliable, and cost-effective digital alternative for trade financing.

Participating banks designed and utilized smart contracts on R3's Corda distributed ledger platform to process accounts receivable (AR) purchase transactions (or invoice financing or factoring) and letter of credit (LOC) transactions.

The banks involved in the trials include Barclays, BBVA, BNP Paribas, Commonwealth Bank of Australia, Danske Bank and ING Bank. Others are Intesa Sanpaolo, Natixis, Nordea, Scotiabank, UBS, UniCredit, U.S. Bank and Wells Fargo.

According to R3, the Corda platform does not allow unnecessary global sharing of data. Rather, only parties with a legitimate need to know can see the data within an agreement. It choreographs workflow between firms without a central controller and achieves consensus at the level of individual deals between businesses.

Other features of Corda are that it directly enables supervisory and regulatory observer nodes. It records an explicit link between smart contract code and human language legal documents. Its transactions are validated by the parties to the transaction rather than a broader pool of independent validators. Yet, it has no native cryptocurrency.

The CEO of R3, David Rutter, points to the transformational approach that the initiative will bring to the trade financing sector.