Wednesday, July 25, 2018

Why Is Blockstream Working With Former Spies?

 


Blockstream is working with former national spies. The question is, why on earth would a cryptocurrency company have the need to employ former spies? 

Take a Journey Back in Time if You Would
On October 23, 2014, Blockstream goes public and announces funding and the formation of their company. Shortly after Blockstream was incorporated, they received $50 million in venture capital from AXA, Khosla Ventures, Horizon Ventures, etc., some of the most powerful venture firms in the world. The Blockstream board of directors are all bankers.

In the Summer of 2015, all of the primary Bitcoin communities such as /r/Bitcoin, mailing lists, Bitcoin Talk, wikis, etc., began massive censorship campaigns against any and all topics that had to do with scaling Bitcoin beyond the 1MB limit which, by the way, was temporarily added by Satoshi Nakamoto back in 2010 as a stop-gap measure to prevent spam in the early days.

In December 2015, it quickly became apparent to everyone that Bitcoin was being hot-wired for a settlement system.

As They Say, the Rest is History
So here we are today. Most of what has transpired since the launch of Blockstream remains uncontested to everyone outside of Bitcoin Core (which is why they are perceived as a cult). However, it's a little known fact that they are working with former spies. Clearly they didn't want anyone to know this.

For those unaware, SIGINT and HUMINT still play critical roles for spy agencies across the world as a means to gather and analyze intelligence. In France's 2012 presidential election, it was discovered through WikiLeaks that all major French political parties were targeted for infiltration by the CIA's HUMINT and electronic SIGINT spies in the seven months leading up to the election.

In this short clip from Scannell's Berlin talk, he is talking about being selective in his targeting and "smart spying" techniques. In another lecture, Scannell talks about using spying intelligence to control.

By the way, did you notice the symbol he used as his background for his talk? It's a very subtle but important image to the Bitcoin Core community (Lightning Network).

What Does This Have to Do With Blockstream?
Well, what Bill Scannell and Blockstream don't want the general public to know is that Bill works intimately with Blockstream on their own intelligence. You see, Blockstream is running it's own program in order to push their agenda so that they can control Bitcoin and profit from it.

According to Scannell's own LinkedIn profile, he runs a private consulting firm where he is focused on being a "strategist." Ironically, he also has past work experience listed as an "Evil PR Genius." In one LinkedIn recommendation for Scannell, the person wrote that he is a "Story-teller, fixer, maker." Scannell has setup his own company, called Special Circumstances LLC for his private consulting.

The Anchorage Daily News wrote a piece about Scannell's wife in 2016, regarding a local election in Alaska. In the article, they described Bill Scannell as "a 'media strategist' who has been known for pedaling some outrageous stories and pulling some outrageous stunts to get media attention." One of the advertisements run by Scannell's wife, Michelle, during the election, was a video of her opponent Mia Costello, calling her a chicken.

As it turns out, back in 2008 Scannell had his own controversy, where it came to light that he was attacking opposing groups in another local election. AlaskaReport.com wrote, "Bill Scannell, the man outed Thursday morning by Jake Metcalfe's former campaign manager Dana Krawchuk as the person behind some nasty websites attacking Ethan Berkowitz, has resigned. Krawchuk had overheard Scannell talking about building websites specifically to attack Berkowitz."

When Samson Mow started working for Blockstream in 2017 as the "Chief Strategy Officer", Bill Scannell and Samson Mow began working more closely together, along side Adam Back and others. In April 2017, Scannell and Back both attended the The 21st International Conference on Financial Cryptography and Data Security in Malta, where Scannell helped moderate a panel that Back was speaking on. Blockstream was the sponsor at the event, where others spoke as well, such as Peter Todd.

On Reddit, Bitcoin.com CEO and entrepreneur, Roger Ver, had this to say about Scannell, "This guy was with Samson when I had the debate with him in Seoul. He was clearly Samson's handler at the event."

Thursday, July 19, 2018

Token Assets Are Coming to Bitcoin Cash

 

Two more types of BCH tokenization projects have been announced on July 18, giving the BCH community a wider variety of different ideas that can bring forth the concept of representative tokens into reality on the Bitcoin Cash network.

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

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

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

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

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

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

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

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

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

How Coinmarketcap Incentivizes Exchanges to Report Fake Volume

 


How Coinmarketcap Incentivizes Exchanges to Report Fake Volume
Bitforex, a cryptocurrency exchange that scarcely scraped the top 100 by trading volume until recently, has been accused of generating false trades on a mammoth scale. Crypto Exchange Ranks, which pulls in open source data from exchange APIs, has published a report in which it accuses Bitforex of creating fake volume and Coinmarketcap (CMC) of being complicit in the scam.

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

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

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

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

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

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

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

Thursday, July 12, 2018

A BCH Fueled Version of Patreon is Coming This August

 



Just recently a team of programmers announced the creation of a 'Bitreon.cash,' a platform that aims to be similar to the popular membership application, Patreon. This particular platform, however, will be censorship resistant and powered by bitcoin cash (BCH) payments. In order to fund the protocol, two developers have raised 47 BCH so far out of their 100 BCH goal; the funds will be used for marketing Bitreon.

Bitreon.cash Aims to Launch a Patreon-Like Platform Powered by Bitcoin Cash
A BCH Fueled Version of Patreon is Coming This AugustPatreon is a platform designed by Jack Conte and Sam Yam in 2013, and the membership service provides users with business tools so creators can design a subscription content service. Over the years the service has become very popular and is used by podcasters, Youtubers, artists, musicians, and cryptocurrency luminaries like Andreas Antonopoulos use the service. However, Patreon has its downfalls because it's a centralized service and the web portal has censored things like adult content. Moreover, the protocol does not allow bitcoin payments for reasons tied to filing with the IRS, the Patreon Zendesk details.

So, two developers Jimmy Birer the creator of Cashflow.fm and the React wallet, alongside a front-end engineer named, Maciej Bowkorski, plan to launch a functional Bitreon.cash on August 1. The development team plans to deliver the complete Bitreon application on September 1. Bitreon.cash has also released the project white paper which details how the platform will function in a decentralized fashion and utilize BCH.           

"With Patreon disabling cryptocurrency payments, we see an opportunity to create a Bitcoin Cash membership platform that brings complete freedom and control to content creators and their subscribers," explain the developers of Bitreon. "The security of payments (no fear of chargebacks) alongside the anonymity and the privacy offered by bitcoin cash and the Bitreon platform will make it possible for creators to reach their maximum creative potential and the subscribers to enjoy the best their favorite creators can offer."

We're aiming to make Bitreon.cash the most popular content membership platform on the Internet, making bitcoin cash adoption skyrocket and enable people to earn all over the world.

Zero Censorship, Smart Contracts, Bitcoin Cash Payments and Free Speech
The Bitreon developers say there will be many benefits to using the decentralized application over a centralized service like Patreon. For instance, there will be an Electron Cash plugin so people can get recurring payments. Bitreon will also be smart contract based by utilizing Nchain's new SDK Nakasendo. Additionally, people can register anonymously and be paid without sharing identification.   

"We impose zero censorship and terms for the content you share and will always defend your right to free speech," explains the Bitreon developers.

With 47 BCH ($34,515 USD) the Bitreon team is well on its way to raising the 100 BCH ($72,922 USD) for marketing the project to new users. Once the functional Bitreon application is released into the wild this August, news.Bitcoin.com plans to review the platform after launch.

Malta-Based Company Launches New Euro Backed Stablecoin, EURS

 


Malta-Based Company Launches New Euro Backed Stablecoin, EURS
With all the controversy and mistrust surrounding Tether (USDT) it's no surprise that a multitude of new alternatives have popped up recently. The latest example is from Malta where a company seeking a local crypto license has launched a Euro-backed stablecoin, EURS.

Stasis Launches EURS
Malta-Based Company Launches New Euro Backed Stablecoin, EURSStasis, a financial tokenization platform, has launched EURS, a new stablecoin built on Ethereum's EIP-20 standard and claimed to be backed 1-for-1 by the Euro. The EURS has begun trading on one exchange already, London-based DSX, and the company says that the order volume is projected to reach $500 million by year's end.

The company adds that EURS was specifically developed to satisfy growing demand for cryptocurrencies from European institutional investors. "EURS bridges the gap between traditional finance and the cryptoeconomy," commented Gregory Klumov, Stasis CEO. "While cryptocurrency trading is currently dominated by individual and retail investors, STASIS and EURS will pave the way for institutional investors to enter the game and begin allocating capital – that's what's needed to take the industry to surpass the trillion dollar mark."

Working Towards a Maltese License
Malta-Based Company Launches New Euro Backed Stablecoin, EURS
Stasis is also revealed to be working towards obtaining a license under Malta's recently approved regulatory framework. Last week, the EU member country enacted three bills into law that are meant to encourage the establishment of cryptocurrency businesses on the island. These include a prohibition on insider trading, market manipulation and misleading ads or ICO whitepapers.

"The Government of Malta has been working diligently and progressively to provide legal certainty to an industry that is currently unregulated", said Silvio Schembri, the Maltese minister responsible for Financial Services, Digital Economy and Innovation. "We therefore welcome any blockchain initiatives such as STASIS that while being innovative, will still respect and encourage compliance and we look forward to the company applying for a licence under our DLT regulatory framework. The Government of Malta wants to create an environment conducive to the development of the blockchain ecosystem that will make Malta the natural destination for businesses operating in this field."

Thursday, July 5, 2018

Malta Passes Blockchain Bills Into Law, ‘Confirming Malta as the Blockchain Island’

 


The Parliament of Malta has passed three bills into law that establish a regulatory framework for blockchain technology, local news outlet Malta Today reported July 4. The bills include the Malta Digital Innovation Authority Act, the Innovative Technological Arrangement and Services Act, and the Virtual Financial Asset Act.

Silvio Schembri, Junior Minister for Financial Services, Digital Economy and Innovation within the Office of the Prime Minister of Malta, tweeted about the passing of the bills today, noting that the island nation is a pioneer in providing a solid legal framework for blockchain companies:

"The three Bills that will regulate distributed ledger technology (DLT) have been approved by Parliament and enacted into law. Malta , the first world jurisdiction to provide legal certainty to this space."

Schembri said that the move taken by the Parliament would put investors' minds to rest as companies now have the necessary legal tools to operate in a regulated environment. The Junior Minister also expressed his optimism about companies choosing Malta as their base of operations, saying that the republic now offers a stable system that will "result in further economic growth."

Dr. Jean-Philippe Chetcuti of Maltese law firm Chetcuti Cauchi Advocates, said the passage of the new legislation is "a momentous milestone for Malta as a forward-looking economy, truly confirming Malta as the 'blockchain island.'" Chetcuti noted that companies will feel more comfortable "committing to further investment, and setting up in Malta."

A multitude of blockchain and crypto business have already located to Malta, as the country's officials took regulatory steps to become the "blockchain island." Recently, several cryptocurrency exchanges, including OKex, Binance, and BitBay have set up operations in Malta due to the development of a blockchain and crypto-friendly space within the country. In May, the Transport Minister of Malta announced a partnership with U.K. middleware blockchain startup Omnitude to improve the Maltese Public Transport Service using distributed ledger technology.

Moreover, the Malta Gaming Authority issued a document with guidelines on blockchain and cryptocurrency applications in the gaming industry, aiming to apply standards to games that use cryptocurrencies and blockchain technology. Last year, the government of Malta also announced is was developing a project to test the feasibility of using blockchain for the recording of academic certificates.

Ripple, CEO Face Another Securities Fraud Lawsuit

 

A third lawsuit, alleging securities fraud, was filed last week against Ripple Labs Inc, XRPII LLC, and its CEO Bradley Glaringhouse. In 28 pages, the class action suit attempts to make the case XRP is a security: issued, maintained, and supported by Ripple in clear violation of US regulatory laws. Ripple has worked extremely hard to distance itself from its cryptocurrency, XRP, in hopes of avoiding just this scenario.   

Ripple Labs Faces Third Securities Fraud Lawsuit
Managing partner of Robbins Arroyo LLP, Brian J. Robbins, filed a class action lawsuit against Ripple Labs Inc, XRPII LLC, and CEO Bradley Glaringhouse on behalf of San Diego college senior David Oconer. Signed by fax late June of this year in the San Mateo, California Superior Court, its more than two dozen pages set about making the case Ripple is in clear violation of the Howey Test.

Mr. Oconer, through his legal team, stresses how Ripple fought to manipulate the XRP price, including placing tens of millions XRP tokens into a kind of escrow, creating an arbitrary scarcity. It was also a way to signal to worried longer term investors the company would not dump the lot all at once. Indeed, XRP mooned to many hundreds of percent, the suit alleges, as a result of such moves.

It's the third such lawsuit filed against the company since early May of this year. A common theme between each suit is the claim XRP is a security as defined under US regulatory statute – which insist Ripple Labs is the token's puppet master indistinguishable from XRP itself. The Oconer version leans heavy on making a case for a Howey Test violation. Ripple isn't taking any of the suits lightly, hiring two former US Securities and Exchange Commission heavies, Andrew Ceresney and Mary Jo White, as lead counsel.

XRP has long been held in a controversial light due in part to its origin story. While leading cryptos were to be mined on chain, ripples appeared ex nihilo with more than 60 percent still held by its parent company. If deemed a security, the company would be most likely ordered to cease all trading, and it's not unusual to presume holders would be given the chance at refunds. Violations of securities law, what's more, can also be prosecuted criminally, though those in the know believe it will not get to that stage.

Sunday, July 1, 2018

RipaEx — DPOS Financial Ecosystem

 


RipaEx is a project build on two pillars:

1.     Ripa Exchange: an open source exchange based on the source code of Peatio (www.peatio.com)

2.     Ripa Blockchain: a DPOS blockchain with its own XPX token that will serve to share liquidity between all Ripa Exchanges in the Ripa network

The development of the project will follow the paradigm:

1.     Ripa Exchange: paid contribution to the community for making a modular, secure and UI responsive exchange starting from the source code of Peatio

2.     Ripa Blockchain: all the latest features of ARK will be merged in our GitHub reposistories, as Ripa Blockchain is an ARK fork we will always entrust ARK as our technology provider and paid contribution will be done for porting ARK features into Ripa codebase (ARK 2.0, libraries, true block weight software, others application…)

To make the return of investment to the investors of the RipaEx project we will proceed on two paths:

1.     Technical/Technological: the XPX token has a purpose as explained in the introduction of chaper "4. The Ripa Blockchain" of the whitepaper, we will push for broader use of the XPX token in our ecosystem and in the ecosystems that find added value to our token.

2.     Economical: XPX tokens not covered by explandeable funding during the Ripa ICO (PreSale and RIPA TEC phases) will be burnt forever to avoid speculation on the token remaining as explained in section "5.3. XPX Ripa Token Distribution" of the whitepaper.

Current exchange phase is:

Phase: PreSale
Phase Ending: Sunday 09/30/2018
Exchange Rate: ₱/€0.10
Accepted Coins: BTC, ETH, ARK, LISK (contact us for more…)
Bonus: 100%
Soft Cap: 25 BTC

Current airdrops are:

1.     ₱125 for first 1,000 users that join our Telegram or Slack channel and like our Facebook or Twitter page

2.     ₱500 for setting up a node

3.     €1,000 in trading fees on the first Ripa Exchange if you invest at least €100.00 in the project

For any doubt, suggestion or if you are just curious I invite you to join our Telegram, Slack or Gitter channels and learn more about our project in the links below:

Websitewww.ripaex.io
Bitcointalk ANNbitcointalk.org/index.php?topic=3759172
Whitepapergithub.com/RipaEx/whitepaper/raw/master/eng/RipaEx_WP_EN.pdf
Facebookwww.facebook.com/ripaex
Twittertwitter.com/ripaex
Telegramt.me/ripaex
Slackripaex.slack.com
Gittergitter.im/RipaEx/RipaEx
GitHubgithub.com/RipaEx/
Mediummedium.com/ripaex


Friday, June 29, 2018

Pornhub Adds New Tokens, Fcoin Defends Trans-Fee, Coinbase Goes Pro

 


Among the interesting stories featured in today's edition of Bitcoin in Brief are the new crypto tokens added by Pornhub, Fcoin founder's defense of the controversial trans-fee mining practice and an update on the upcoming launch of Coinbase Pro.

Bigwigs Talking Bitcoin vs Blockchain
The Daily: Pornhub Adds New Tokens, Fcoin Defends Trans-Fee, Coinbase Goes ProA few well known people who don't routinely speak about Bitcoin and blockchain technology have recently shared their opinions about the subjects. Jack Ma, the Chinese billionaire behind Alibaba Group, opined that "Blockchain technology could change our world more than people imagine. Bitcoin, however, could be a bubble." And he added that "traditional financial institutions serve 20 percent of people and make 80 percent of profits. New financial institutions should service 80 percent of people, and make 20 percent of profit."

Steve Wozniak, the Bitcoin-loving co-founder of Apple, has on the other hand said he feels that all the current hype around blockchain technology is just a bubble akin to the Dot Com one. "If you look now you say all that internet stuff happened, we got it, it just took a while," Wozniak explained. "It doesn't change in a day, a lot of the blockchain ideas that are really good by coming out early they can burn themselves out by not being prepared to be stable in the long run."

And Professor Robert Shiller, who received the 2013 Nobel prize in economics, thinks that Bitcoin is a generational social movement, that might be in a speculative price bubble but it does not mean it is going away any time soon. He said in an interview that: "The East Coast is less into it than the West Coast. Silicon Valley is really into it. It's a social movement. It's an epidemic of enthusiasm. It is a speculative bubble. That doesn't mean that it will go to zero."

EOS to Get a Makeover?
After coming under a lot of criticism lately over centralization, freezing accounts and other issues, EOS might soon get a serious makeover. Daniel Larimer, the creator of EOS, has proposed a major revision to the way its constitution works. He explains that this is because, he just now learned that, "if you give people arbitrary power to resolve arbitrary disputes then everything becomes a dispute and the decisions made are arbitrary. The more power the arbiter has, the more vicious and petty the disputes become and the less predictable the outcome." Better late than never.

Pornhub Adds New Tokens
The Daily: Pornhub Adds New Tokens, Fcoin Defends Trans-Fee, Coinbase Goes ProAdult entertainment video portal, Pornhub, has announced it will accept two new cryptocurrencies, Tron and Zen Cash. As you may recall, a couple of months ago Verge has made a big deal about the site accepting its token. There is no explanation on the way Pornhub selected the few tokens it did, but at least in the case of Verge it is reported it just got paid 75 million XVG for doing so.

"Here at Pornhub, as one of the most viewed websites in the world with over 90 million daily visitors, it's important that we continue to expand our crypto payment options to align with our community's growing payment preferences. Decentralized payment systems have continued to grow in popularity, and cryptocurrency adoption is exploding across a broad economic spectrum. Today, cryptocurrencies are especially viable in the adult entertainment industry because they are privacy-centric and incorporate more anonymity tools than traditional tender," said Corey Price, VP of Pornhub.

Fcoin Founder Defends Trans-Fee Mining
In an interview released in China yesterday, Jian Zhang, founder of Fcoin, faced challenging questions regarding his business and controversial business model of "trans-fee mining." As we previously reported, the practice of rewarding users with exchange issued tokens for generating transactions was called an over-priced backdoor ICO ripe for manipulation by critics including Binance CEO Changpeng Zhao.

FCoin Founder Jian Zhang
Zhang said: "With respect to the accusations of pyramid selling, currency manipulation, and being a stock maker – I won't be answering these questions directly. You can refer to the notion and history of Bitcoin, and see how many people have been wronged this way. Are there still people who think Bitcoin is pyramid selling? If so, you are not rejecting Fcoin, you are actually denying the economic value of the cryptocurrency in general."

"The accusation of an expensive ICO is the most funny and ridiculous. First of all, Binance grew from an ICO, some people must be out of their mind when criticizing the ICO of others while raising no money by themselves. Second of all, it's wrong in the first place for some people to calculate our market value using the total amount of Fcoin token yet to be issued by us. Those unissued FT [Fcoin token] cannot be regarded as transaction, nor can they be a part of any distribution of dividend. They actually don't exist until after issued. Therefore, the miscalculation is just wrong. In no cryptocurrency exchange is market value calculated this way. Lastly, our valuation is actually very low, given our transaction amount, dividend ratio, number of active traders and growth rate."

Coinbase Switches to Pro
If you are a GDAX user, this is a kindly reminder that the platform will be switching over to Coinbase Pro tomorrow, Friday June 29, and you will not be able to access the old domain anymore. According to the developers, the redesigned platform is meant to make the trading experience easier and more intuitive, with a simplified deposit and withdrawal processes, improved charts that will allow customers to easily scroll and access historical data and a new consolidated portfolio view called "My Wallets" that lets customers see an overview of their account orders and balances.

Japanese Economist Explains Why Another Bitcoin Price Surge Is Unlikel

 


Yukio Noguchi, a famous economist in Japan and an advisor to Waseda University's Business and Finance Research Center argues we can't expect Bitcoin's prices to rapidly surge again. In his books and in recent articles, Noguchi makes his case eloquently. He wrote a recent article in Diamond Weekly clarifying his position but has been making his case since January of this year and published a book last December.

"Because It's Now Possible to Trade on Bitcoin Futures You'll Never See a Rapid Surge Again"
Noguchi points out that the price of BTC is now almost a third of what it was in December of last year. He believes that because it's now possible to trade on Bitcoin futures people will never see a rapid surge again.

On one hand, he says that because the price of bitcoin has gone down, the costs of sending bitcoin are now back to a level that makes it cheaper than doing bank transactions and this is welcome.

Bitcoin won't surge, Japanese economist says
He argues that the introduction of the futures market has driven down the price considerably. This year in January he persuasively argued that the cause of Bitcoin price collapse was the start of the selling of bitcoin futures. "Bitcoin prices were a bubble, to begin with, and now we're seeing a return to normal values. The San Francisco Federal Bank, in a report, also suggested that the introduction of Bitcoin futures trading caused a price drop.

Additionally, the market is heading towards a situation in which it will be possible to short-sell bitcoin futures and that will also contribute to keeping the prices down.

Noguchi points to a paper published on May 7 by the Federal Reserve Bank of San Francisco, "How Futures Trading Changed Bitcoin Prices", authored by Galina Hale, Arvind Krishnamurthy, Marianna Kudlyak, and Patrick Shultz. Here is the key passage:

"From Bitcoin's inception in 2009 through mid-2017, its price remained under US$4,000. In the second half of 2017, it climbed dramatically to nearly US $20,000, but descended rapidly starting in mid-December. The peak price coincided with the introduction of bitcoin futures trading on the Chicago Mercantile Exchange. The rapid run-up and subsequent fall in the price after the introduction of futures does not appear to be a coincidence. Rather, it is consistent with trading behavior that typically accompanies the introduction of futures markets for an asset."

Waseda University, Japan
Noguchi insists that actually, the majority of investors are predicting that prices of bitcoin will continue to fall, especially when some are able to make money from short-selling the cryptocurrency.

He also feels that allowing cryptocurrency to branch off, it makes people feel like they can get new cryptocurrency for free and that also drives down price.

Does he see that as resulting in a decline in the popularity of Bitcoin?
Surprisingly, Noguchi believes it's a good thing. As the price of bitcoin drops, it becomes a more attractive means of sending money. He calculated that at current prices, if you had to use Mitsubishi UFJ Bank to send money, it costs you 432 yen for any amount above 30,000 yen. But with the current value of Bitcoin, it's cheaper to send via a regular bank transfer than BTC, unless the value of BTC falls to 675,000 yen. When BTC returns to that level, it will finally be trading at what should be a normal value.

Thursday, June 21, 2018

What Is a Decentralized Autonomous Organization?

 


A key topic of discussion within the cryptocurrency space is the ultimate implications of cryptocurrency and the underlying blockchain technology. One of the first transformational possibilities shared among the community was the idea of the Decentralized Autonomous Organization (DAO). 

What Is a DAO?
A Decentralized Autonomous Organization represents an environment that handles some function or output in a manner that is entirely self-governing, self-sustaining, and self-fulfilling. The term was first coined in 2013 by Daniel Larimer, creator of BitShares, perhaps the first working example of a DAO. The famous early example was given by former Bitcoin contributor Mike Hearn, who described a future DAO as an autonomous vehicle that seeks out and picks up a passenger, drops them off at their destination, and uses the Bitcoin received from the passenger to recharge at an electricity station, before finding its next passenger.

To put it more broadly, a DAO can represent any form of production or protocol in which the mechanisms for its purpose are carried out automatically, through the use of algorithms and machinery, made possible through an integration of blockchain technology. In contrast to real-world methods of production, a DAO looks like a business in which the job of manager/CEO is replaced completely with an automatic process, and business decisions are left entirely up to the token-holding participants who make up the ecosystem within and around the business.

Current Instances
Perhaps the most widely known Decentralized Autonomous Organization is The DAO, a failed autonomous investment fund launched on the Ethereum network. Due to insecurity, The DAO was hacked soon after its launch, and resulted in the Ethereum Classic fork.

Besides The DAO, there are a number of Decentralized Autonomous Organizations that populate the cryptocurrency space. Alongside BitShares, DASH's development protocol is a DAO. DASH holders vote on projects for the development team to pursue, and the developers are funded via a development pool of DASH that a portion of each block mined goes towards. DigixDAO and Maker are two more examples. Both provide autonomous ecosystems that create and govern stablecoins. Digix's DGD represents digital grams of gold, while Maker's Dai is a tokenized US dollar.

Recent Developments
While the first plans for DAOs utilized the distributed financial ledgers of Bitcoin and other altcoins, the introduction of Ethereum's smart contracts completely expanded the possibilities for DAO structures and entities. Smart contracts enable the algorithm-backed system to encapsulate exponentially more than what was previously imagined.

Finance, medicine, and insurance are three industries that will likely be transformed by such platforms. Each of them faces major externalities that are addressed by an autonomous organization of capital and labor, and initiatives within the cryptocurrency space are already beginning to take on these three sectors.

Future Implications
Several academics and economic theorists are beginning to view Decentralized Autonomous Organizations as capable of enabling a global transition to a post-capitalist society. When implemented correctly, a DAO unifies many of the elements beginning to emerge amidst what many theorists suggest is an ongoing evolution beyond capitalism. These elements include the programmable economy, the token economy, and the sharing economy.

The automation of an entire component of the production function in any output (the manager/CEO organizer) indicates that the DAO can potentially be superior in terms of efficiency when competing with firms in any industry, as the DAO eliminates a major input cost entirely. Perhaps within the next few decades, the DAO could pioneer a transition from a worker/manager relationship to a participant/algorithm one.

Bitcoin Businesses Denied Banking Services in Ireland

 


Leading companies from the crypto sector in Ireland have complained they are being denied services by some of the country's major financial institutions. Among the affected businesses are bitcoin exchange Bitcove, winner of the bank-sponsored "Best Business Startup" award, and Ireland's "longest running" bitcoin broker, Eircoin.  

Banks Close Accounts of Award-Winning Startup
Several Irish businesses have been forced to either stop trading cryptocurrencies or seek partners abroad after local financial institutions refused to offer them banking services. Some of them have lost their bank accounts, while others have never been allowed to open one in the country, the local press reported.

Bitcoin exchange Bitcove, which has been operating since 2014 and had previously worked with Allied Irish Banks (AIB), Permanent TSB and Bank of Ireland, is one of the affected companies, The Irish Times reported. One of its co-founders, Peter Nagle, told the newspaper the banks closed its accounts stating they do not support companies offering cryptocurrency exchange facilities. The trading platform has since been using the services of "a more progressive banking partner" in Europe.

"Particularly disappointing was Bank of Ireland. We were participants on the Ignite startup program, which is backed by the bank. Our business and its progress were reviewed monthly by a panel which included Bank of Ireland representatives. At the end of the incubator Bitcove won the award, but then just a few months later our accounts were frozen and eventually closed," Nagle explained.

One of Ireland's First Bitcoin Brokers Also Hit
Bitcoin Businesses Denied Banking Services in IrelandAnother crypto firm that has suffered from the clampdown is Eircoin, one of Ireland's oldest bitcoin brokers, which closed a couple of months ago. An affiliated consulting business was also refused banking services. "We are being shuttered due to a negligent and defensive banking system," Eircoin's cofounder Dave Fleming said, quoted by the Irish daily. He added that his company, along with other cryptocurrency sellers, had previously consulted with the Central Bank of Ireland which told them that as long as they were abiding by the regulations their operations were in line with the law.

Bank of Ireland, one of the four largest Irish commercial banks, admitted in a statement it was not providing banking services to virtual currency exchange platforms, but noted that its customers were not prevented from transacting cryptocurrency. AIB Group, another "Big Four" bank, denied it was refusing services to companies from the crypto sector. A spokesman was quoted as saying, "We don't discriminate in relation to providing banking services to cryptocurrency companies nor have we been systematically exiting such companies." According to the official, some of these businesses are unable to comply with the anti-money laundering and know your customer requirements that the bank is obliged to adhere to.

Bitcoin Businesses Denied Banking Services in IrelandThe Banking and Payments Federation of Ireland (BPFI) stated that it wasn't aware of any policy to close accounts of companies trading cryptocurrencies. However, the organization presenting 70 traditional financial institutions noted that Irish lenders are expected to take measures to minimize the risk of facilitating "financial crimes which are enabled by cryptocurrencies," such as money laundering and terrorism financing.

Sharp Contrast
The negative attitude of the legacy financial institutions towards crypto businesses sharply contrasts with the view of Ireland as a crypto-friendly jurisdiction in general. Recently, it was reported that a new government-backed platform will promote the country as a hub for developers of applications based on the technology behind cryptocurrencies. Blockchain Ireland was launched by the Irish Blockchain Expert Group in partnership with a young company called Consensys. The initiative is supported by Enterprise Ireland, the Department of Finance, members of the industry and representatives of academic institutions. The agency promoting foreign investment in the country, IDA Ireland, has also backed blockchain and crypto projects.

Bitcoin Businesses Denied Banking Services in Ireland

Cryptocurrencies and the related economic activities received another recognition by authorities in Dublin with the decision of the Irish revenue service to issue guidelines on the taxation of crypto transactions. The new "Tax and Duty Manual" clarifies related matters and confirms that in most cases the existing tax regulations apply to the crypto sector. According to the advisory, crypto incomes and profits are subject to direct taxes such as corporate tax, income tax, and capital gains tax. Officials have also stated that for VAT purposes bitcoin constitutes a currency. The Irish tax agency regards cryptocurrencies as "negotiable instruments" and exempts them from the value added tax.