51% Attack Explained: The Attack on A Blockchain

Attackers use 51% attacks to reverse transactions that have already taken place, in a blockchain, in what has come to be known as double spend. For instance, one can spend 5 bitcoins to purchase a motorcycle. Once the bike is delivered, logic dictates that Bitcoins are to be transferred to cater for the cost of the bike and can activate the attack.

However, on performing a 51% attack, an attacker would be able to reverse a transaction resulting in all coins used to fund the transaction being refunded. In the end, the attacker will be the owner of the motorcycle as well as the bitcoins used to buy it.

How A 51% Attack Occurs

Whenever a transaction is carried’ out on a blockchain, be it by Bitcoin or any other cryptocurrency, it is usually put in a pool of unconfirmed transactions. Miners in return are allowed to select transactions from the pool to form a block of transactions.

For a transaction to be added into a blockchain, a miner must find a correct answer to a puzzle. Miners find solutions to complex mathematical puzzles by using computational power. The higher the computational power a miner has, the likelihood of him finding the correct answer to be allowed to add a block to a blockchain.

A correct answer to a puzzle has to be broadcasted’ to other miners and can only be accepted if all transactions in a block are valid according to the existing record on a blockchain. Corrupt miners, on the other hand, don’t broadcast solutions to the rest of the network.

What this practice does is that it always results in the formation of two versions of a blockchain. One, which is the original blockchain followed by legitimate miners and a second block chain used entirely by a corrupt miner who is not broadcasting results of a puzzle to the original network.

A corrupt miner will most of the time continue to work on his own version of the blockchain, which in this case is not broadcasted to the rest of the network. With the second blockchain now isolated from the network, the corrupt miner can spend his or her bitcoins on the truthful version of the blockchain, the one that all the miners are following.

Democratic Governance

Blockchain is programmed in such a way that it always follows the longest chain, which is always perceived as the legitimate blockchain. Whoever has the most hashing power/computing power is likely to add blocks to a chain much faster, resulting in the longest blockchain which would end up being seen as the most legitimate.

A corrupt miner will thus try to add blocks to his chain at a much faster rate in a bid to make it longer to be considered as the legitimate chain. Once the corrupted blockchain attains the threshold to be considered the longest one, a corrupt miner, in this case, would broadcast it to the network as part of the 51% attack initiation process.

The rest of the network on detecting the newly corrupted blockchain will cease using the original legitimate blockchain and switch to the new one.

Transaction Reversal

As soon as the corrupted blockchain is considered as the truthful chain, protocol dictates that all transactions not included in it be reversed. In this case, an attacker would end up getting a refund on all his bitcoin spent on the previous blockchain that is now considered’ illegitimate.

This s what is commonly referred to as ‘double spend’ attack or 51% attack, as the attacker ends up owning both the Motorcycle and the Bitcoins used to purchase it.



The probability of 51% Attack Occurring

51% attacks on Bitcoin blockchain are rare because an attacker would need computing power or hashing power superseding that of millions of miners all over the world. To be able to initiate such an attack one would need to spend an enormous amount of money to acquire mining hardware capable of competing with the rest of the network.

The fact that even the most powerful computers in the world cannot compete against a pool of millions of other computers makes it extremely hard to perform such an attack. Electricity costs needed to propagate such an attack would also make the operations unrealistic.

However, that does not mean that there no other ways of initiating 51% attacks.  A bug in the code of a blockchain could in some cases open the door for a miner to produce new blocks at a much faster rate thus is in a position to initiate a 51% attack.

Such attacks are common in smaller blockchains with proof of work system as less computational power is required in this case. Bitcoin blockchain has never suffered a 51% attack in part because it boasts of an active hashing power which is hard to compromise.

Mining Hardware Technology

There have been growing concerns in the recent past over the amount of power that mining hardware companies have accrued in the business. ASIC mining companies have enhanced their mining hardware making them extremely powerful, to the concern of most developers.

There’s growing fear that the powerful mining hardware is set to make certain mining individuals and companies with substantial financial muscle powerful than other groups. Such a move would give them the power to be in control of blockchains to the extent that they would be in a position to initiate 51% attacks if they wish.

Concerned by the threat posed by powerful ASIC mining hardware, capable of commanding high hashing power, Monero recently updated its protocol consequently blocking an ASIC mining.

Bitcoin for Beginners: Three Things to Know Before You Buy

Bitcoin, blockchain technology, and digital currencies as a whole have made such a big splash in the news cycles over the past couple of years, and for newcomers in the space, it can be overwhelming to gain a proper sense of footing. That’s why I wanted to provide three important takeaways for prospective consumers to know before deciding to invest in this rapidly evolving space.

Digital Currencies are Built on Decentralized Technology

Following the financial crisis of 2008, people lost trust in the centralized banking system and began to demand a new currency that was not controlled by a central authority. Shortly thereafter, Bitcoin was born. Capped at a maximum of 21 million coins, Bitcoin’s limited supply means that it is not subject to the same inflation or manipulation that face government-issued currencies.

Furthermore, unlike traditional financial transactions which are verified by a third party, such as a bank, bitcoin transactions are built on blockchain technology, a decentralized database run by a global network of computers that contains a public ledger of all cryptocurrency transactions. Each connected network receives a copy of the blockchain, and transactions are verified by the community as a whole and not a centralized authority.

In an age where data security and privacy is more important than ever, many businesses and tech companies have developed an interest in implementing decentralized technology, including Facebook. “Many people now believe technology only centralizes power rather than decentralizes it. There are important counter-trends to this — like encryption and cryptocurrency — that take power from centralized systems and put it back into people’s hands. But they come with the risk of being harder to control. I’m interested to go deeper and study the positive and negative aspects of these technologies, and how best to use them in our services,” CEO Mark Zuckerberg said earlier this year.

Not all crypto investments are stored the same way

If you decide to buy bitcoin or other digital currencies, there are several different ways in which your investment can be stored.

  1. Online. Often referred to as a “hot wallet”, bitcoin wallets that are kept online and connected to the internet. If you store money with Coinbase, that is an example of a hot wallet. Since they are connected to the internet, hot wallets are more vulnerable to hackings, but on the upside, they are very accessible if you want to buy or sell a small amount of a particular digital currency.
  2. Hardware wallets. Often referred to as offline cold-storage wallets, many cryptocurrency companies store investments in hardware wallets, which can include physical thumb drives such as Trezor and Ledger. While these are less vulnerable to hackings than hot wallets, physical crypto wallets are fragile and at risk of being damaged, lost, or stolen.
  3. BitGo Offline, Digital Cold-Storage Wallets. BitcoinIRA.com has an exclusive relationship with BitGo, the leader in multi-signature encryption and digital security for offline, digital, cold-storage wallets. Security keys are kept with BitGo, BitcoinIRA.com’s custodian Kingdom Trust, as well as with a backup key provider for premium security.

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It can be volatile

Bitcoin is frequently compared with gold: both are decentralized, alternative assets that are removed from government and stock market fluctuations. But unlike gold, which has maintained a relatively consistent price trajectory in recent years, Bitcoin has been rather volatile. However, in my opinion, this is normal for an emerging technology: gold has been around for thousands of years, while Bitcoin and cryptocurrencies as a whole have only been around since 2009.

Furthermore, 2018 has been a year of major regulation for space, which has also been a strong factor in current volatility. “I think institutional investors have gained a lot of interest, and they haven’t really come into crypto yet because there is still some regulatory uncertainty,” said Fundstrat Global Advisors co-founder and bitcoin bull Tom Lee.

However, with much more acceptance from mainstream financial institutions in recent months, as well as increasing clarity from regulators, Lee still believes it is “completely reasonable” that Bitcoin will climb up to  $25,000 by the end of 2018.

Cryptocurrency may be a complex space, but it doesn’t have to be daunting. I hope that these three main points help clarify questions that crypto beginners may have as well as affirm all of the exciting developments and advancements that are happening in the field.

This article was written By Chris Kline, Co-founder, and COO at Bitcoin IRA

When Distributed Ledger Meets Distributed Services: How Blockchain is Disrupting the Sharing Economy

One of the phrases that’s almost impossible to not hear about is the ever-continuing growth of what’s referred to as the “sharing economy.” As the demographics and consumer trends of society shifts, so to do consumers’ needs. Companies like Airbnb, Uber, and Lyft have taken off in recent years as a result of the “sharing” economy. Many consumers find that in their daily routines, they really don’t have as much of a need for car ownership; however, there are still times when they may need the use of a vehicle. On the other hand, there are many car owners who have paid a significant amount for their vehicle, yet find themselves underutilizing the benefits of owning it. That’s exactly where Uber and Lyft have come in to connect both parties together.

While Airbnb, Uber, and Lyft are some of the most obvious cases of this growing trend, there are a variety of smaller industries bringing the same model to the markets for other use-cases. Another booming movement is the “gig economy” and it goes hand-in-hand with the sharing economy. In the gig economy, companies are essentially sharing employees. It’s typically more cost effective for companies to hire freelancers in a wide variety of niches. Freelancers with skills in fields like graphic design, writing, and programming (among others) are now working with multiple companies on specific projects rather than just one company as an employer.

According to a recent study conducted by LinkedIn, in 1989, freelancers made up only 6% of the workforce; fast-forward to today, and freelancers in the gig economy are estimated to represent an estimated 43% of the workforce by the year 2020.

Clearly, the sharing economy is growing in every facet of the global economy. From ride-sharing platforms to housing, and even workforce sharing, it’s clear that the rate is likely to continue growing.

While the sharing economy and gig economy are growing and disrupting traditional industries in age-old markets (hotels, taxi services, etc.), what about the technology powering those services? The gig and sharing economy have both put an emphasis on creating an “agile” economy by distributing the services offered. What if there was a technology that fit the model perfectly? Enter blockchain. Yes, the same technology that lies behind Bitcoin, Ethereum and other cryptocurrencies.

Image Credit: VB

Blockchain: Distributed Ledger Meets a Distributed Economy

With the economy continually shifting in the direction of “sharing” across industries, it only makes sense that these distributed services, which have been disrupting large industries globally, go hand-in-hand with blockchain technology that’s been breaking into various sectors in recent years.

Blockchain technology has been bringing the sharing economy to another level by making massive shifts in the way we think about business. By implementing a decentralized method for solving pain points across the economy, the sharing economy can operate even more effectively. There are many examples of the distributed revolution extending to peer-to-peer (P2P) lending and distributed systems for handling intellectual property and copyright. But there are also cases of blockchain technology being implemented into already-distributed sectors of the economy to disrupt even further.

Industries can look to companies like ShareRing as an example of the two movements coming together. ShareRing is using blockchain technology to further the sharing economy in a big way. They’ve teamed up with GTI Holdings to help bring more providers of goods and services onto the blockchain. With the system, users all over the world will have easier, more efficient access to a variety of distributed goods and services in many different sectors.

The company is also taking advantage of the recent shift in the automobile industry and implementing blockchain technology with it. ShareRing, a company with a lot of experience in blockchain technology and the growingly distributed economy recently joined the Mobility Open Blockchain Initiative (MOBI) consortium and is working with some of the biggest car manufacturers in the industry to bring the disruptive nature of blockchain technology to the automobile industry. MOBI is looking at not only ride-sharing but other facets of distributed ledgers in the industry as well. The group’s goal is to make transportation “safer, more affordable, and more widely accessible using blockchain technology.”

Blockchain technology in the sharing economy is still a new step, so the implications for the movement aren’t known entirely yet. However, it should come as no surprise that these two game-changing disruptors are teaming up as they naturally fit so well together. Bringing a distributed system to a distributed economy just makes sense.

Where is Blockchain Technology Going? An Analysis by Guy Galboiz

In January 2016, most people just knew about one cryptocurrency and that was Bitcoin as it had a valuation of about $1 billion. These days, you can find more than 40 popular cryptocurrencies and more and more are entering the market on a regular basis. As their use becomes more widespread so is blockchain adoption due to what it can offer. In simple terms, this technology refers to a type of distributable ledger comprising of immutable digital data stored in packages that are called blocks. They are piled in a linear chain referred to as ‘blockchain’. Due to the security and anonymity it can offer, blockchain technology has a lot of potentials and people are beginning to realize that.

Suffice it to say, blockchain holds a lot of potential, but where is it going in 2018? We recently had a discussion with Guy Galboiz, an aspiring Tech Entrepreneur, and Investor, who shared with us some of the ways that blockchain will become integrated into the world:

More and more people and institutions are understanding blockchain technology

As mention above, this technology is moving further and further into the mainstream world. Blockchain groups are being formed everywhere, from small cities to college campuses. The concept of blockchain classes is being introduced and taught at universities. The purpose is to discuss cryptocurrencies and have conversations about it that lead to action. The price spikes and use of cryptocurrencies have caught the public eye due to which more and more people are interested in knowing all they can about blockchain technology.

There are some blockchain firms that are creating global solutions for dealing with crypto volatility. Furthermore, ecosystems are also being developed for interested investors in order to allow them to participate in the cryptocurrency market. This involves the development of exchanges, mobile apps and more.

B2B participants and tech giants are emerging

While talking about b2b participants, Guy Galboiz referred to David Marcus, Facebook’s VP of Messaging Products, who became a member of Coinbase’s board in December 2017. Previously, he had also started a mobile payments company that was acquired by his former employer, PayPal. Other than that, Google has also been one of the major corporate investors in blockchain technology and will continue to be the same in this year. Amazon has also jumped on the bandwagon as in December of last year, they announced a partnership with R3’s Corda. As far as the B2B market is concerned, TraDove had raised $30 million in their ICO for expanding their existing social networking platform onto blockchain technology.

There is a rise in smart contract applications

Under certain criteria, having a smart contract ensures an action or payment. This core technology is being leveraged by startups in a variety of ways. For instance, an infrastructure protocol is under development by JoyToken for the gaming industry that uses smart contracts (autonomous, decentralized agents) for safely guaranteeing and auditing game records. Put simply, these are great for eliminating a lot of friction from the gaming ecosystem thereby providing developers a revenue stream that’s easy to use and was untapped previously.

Guy Galboiz talked about another startup called meVu, which is using these smart contracts for becoming the most renowned global platform developed exclusively for players willing to bet anytime, anything and against anyone. With smart contracts, you can be assured of a transparent and safe process. Therefore, it is not surprising to know that smart contracts are becoming quite valuable across a plethora of industries. They don’t just eliminate the need for intermediaries, but also their fees and enable everyday transactions to run smoothly. As the security and regulations behind these smart contracts grow this year, their use will increase.

More and more companies are using the blockchain

Due to a large variety of functions that can be served by the blockchain technology, more and more companies are choosing to enter this space. Some of them include unique ICOs such as Puregold, which is making use of tokens supported by gold. As gold has been around for a long while, it was expected that it would enter the blockchain space and Puregold had its ICO in January of this year. Similarly, there are also other companies such as FarmaTrust that are using this technology for improving life like eliminating counterfeit pharmaceutical drugs.

This technology is reshaping the developed world

One of the biggest advantages of blockchain technology is how it can be used for dealing with global issues and open up access to areas that were unavailable previously. Some of these involve the introduction of an existing service to a whole new market whereas others can be found in more humanitarian forms. For instance, there is a blockchain-built crowdfunding platform called Acorn Collective, which is aimed at bringing crowdfunding to the market by providing access to all legal projects without any charges. This is immensely important because, before that, crowdfunding previously had high barriers to entry.

ExsulCoin is another interesting initiative that’s aimed at helping refugees integrate into their new homes, both economically and socially. Additionally, they are also looking into driving refugee led education and projects. All of this is only being accomplished due to the existence of blockchain technology.

Crypto is being used as a regular payment mechanism

Every day, more companies are declaring that they will accept cryptocurrencies as a payment method. Some of them include Subway, WordPress, Shopify stores and Expedia amongst others. SparkleCoin is offering a cryptocurrency to be used for purchasing from notable e-tailers within their ecosphere of 3 companies. Customers can enjoy a lot of convenience because of this direct transactability for B2B and also B2C purchases. This is becoming widely accepted in 2018. Some companies are accepting Bitcoin and other popular cryptocurrencies (such as Ethereum, Ripple, etc) for media attention while others are incorporating this payment gateway for pleasing their customers.

In a nutshell, blockchain technology is disrupting a number of industries, which means that a number of traditional industries are being changed and developed. Some of these industries include education, healthcare, logistics, media, and finance. Other industries are also expected to undergo change as this technology continues to develop and is adopted by companies.

How Can Bitcoin be used as a Crime Weapon? And How Can this Be Solved?

While the development of bitcoin – and other comparable cryptocurrencies – seems to have provided users with a unique array of benefits, these benefits have not come without corresponding risks and costs. Due to the distinctively unregulated nature of the cryptocurrency market, it has naturally been frequently used by a wide variety of criminal enterprises.

Legislators around the world continually find themselves in a very unique position. While they do not want to interfere with markets that may be able to eventually regulate themselves, they also do not want to willingly stand by and allow for easier conditions for committing crimes. Furthermore, due to the fact that cryptocurrency exchanges are typically much more difficult to monitor than ordinary electronic transactions and the fact that these exchanges often take place on an international level, there ultimately exists an even more complicated regulatory environment.

Though there may not be one clear path forward to a world where cryptocurrency can be both entirely safe and productive, it certainly seems it is worth the effort to consider the possible means of arriving there. This article will briefly examine the existence of bitcoin (and other cryptocurrencies), how bitcoin has become an integral part of many criminal networks, and possible changes that can be made in the future.

What is bitcoin?

Bitcoin – which was initially released in January 2009 – is the world’s first and most widely recognized form of cryptocurrency. Cryptocurrency is a medium of exchange that exists explicitly in the digital world. Using cryptography – the art of protecting information using a complicated code – financial transactions can be made in a secure way. The ownership of a specific cryptocurrency can be identified using a public ledger.

As of June 2018, one bitcoin is worth approximately $6,500. This is significantly less than the peak value that was witnessed in December 2017 ($19, 343), but also significantly more than values reported just one year ago. The market for bitcoin, overall, is less predictable than most other currency markets. However, because of the digital asset’s unique characteristics – decentralization, easy exchanges between peers, and the innovative use of digital technology – there are still many individuals who believe that bitcoin, or cryptocurrency in general, will likely function as an international currency of the future.

What are the non-criminal uses of bitcoin?

In general, there is relatively little belief that bitcoin will replace the use of traditional currencies (such as USD, EURO, etc.), rather, it will function as an alternative that supplements the global currency markets and also makes them significantly more competitive. Like traditional currency, bitcoin’s value is fundamentally determined by whatever people believe it is worth.

Contrary to the primary focus of this article, there are still many legitimate, legal, and highly accessible ways that an individual can use bitcoin in exchange for specific goods or services.

  • Air travel and hotels (using services such as Expedia)
  • Certain applications, videos, movies, games, and electronic services (accepted in the Microsoft app store or the websites of certain artists)
  • A surprisingly large number of merchants and franchises (including Subway)
  • Some gift cards or other electronic gifts
  • Tuition for certain schools, universities, and even preschools
  • Numerous other circumstances where online payments are standard

Clearly, there are many reasons that a well-intentioned person may want to pay for certain things using bitcoin. Because the correlation between the value of bitcoin and the value of most local currencies is relatively limited, some individuals prefer to use bitcoin when the exchange value is particularly high and use traditional currencies when the exchange value is particularly low. Considering that both currency markets fluctuate over time, diversifying your range of available payment options can decrease the risk of your current holdings.

There are many innocent reasons that a vendor may choose to accept bitcoin as well. Not only will they be able to enjoy the same apparent benefits of diversification, but using bitcoin can help reduce the risk of chargebacks and also make it significantly easier for vendors to operate beyond borders and access a generally broader market. Additionally, even if they are not engaged in any illegal activities, individuals on both sides of a given transaction can enjoy the added layer of privacy that only cryptocurrency can offer.

The future of bitcoin – and the cryptocurrency market as a whole – remains relatively unclear. Generally, it seems that there will be a wider range of cryptocurrencies to choose from and that cryptocurrencies will generally be accepted at an increased number of locations. However, bitcoin’s widespread use in illegal markets and its incredibly unregulated nature are both legitimate reasons for the public to be at least somewhat skeptical.

How is bitcoin used for illegal activities?

Unfortunately, the characteristics of bitcoin that many people innocently enjoy – relative privacy, the removal of an intermediary, ease of international transactions, etc. are also the characteristics of bitcoin that happen to benefit criminal enterprises the most. Like the ski mask, bitcoin was not created with the intention of being compatible with criminality, but its increased use by criminals is something that certainly cannot be easily ignored.

Currently, there are many different ways in which bitcoin is being actively used by criminals.

  • The Darknet is a portion of the internet that operates without any active hosts. Activity on the Darkent is difficult to track, difficult to accurately identify, and difficult to even begin to effectively regulate. Naturally, individuals who seek to exchange currency (cryptocurrency) for illegal services can benefit from these features.
  • The Dark Web is related to the Darknet but is structurally different and typically requires specific software.
  • Bitcoin is frequently used as a means for paying for drugs or other illegal goods and services (such as weapons).
  • Bitcoin is also frequently used to hire individuals for malicious hacking. This includes trying to access other individual’s financial information, other personal information, and trying to “take over” a specific computer.
  • Terrorism and widespread criminal activity – such as the international distribution of weapons and other threats to the public – is often organized using bitcoin due to the fact that it is incredibly difficult to pin these activities on a specific individual.

Essentially, if an individual or organization seeks to engage in an illegal activity that can be entirely organized via the internet, then they will have many reasons to use cryptocurrency rather than traditional payment options. On the rare occasion that a law enforcement organization is able to trace these illegal activities to a specific IP address, the burden of the prosecution is still usually not entirely satisfied. The law enforcement agency (depending on the jurisdiction in which these activities are taking place) will still need to prove this activity took place knowingly and was not a consequence of a deliberate digital misdirection.


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How can the use of bitcoin be made safer?

One of the difficult things about regulating bitcoin and the rest of the cryptocurrency market is that now that this technology has been introduced around the world, it is seemingly impossible to permanently get rid of it (or even get rid of just part of it). Even if someone were to take the most extreme stance on the topic imaginable – and advocate for the total international ban of bitcoin – a replacement alternative would inevitably emerge in a matter of days (or possibly even hours).

Typically, most government agencies around the world are “catching up” with the introduction of new technologies. Staying ahead of the innovation curve in the cryptocurrency industry is something that is seemingly impossible. Instead of banning cryptocurrencies outright, it would be much more rational to try to adapt around the existence of current systems.

Fortunately, it seems there are at least some things that can be done in order to decrease the use of bitcoin as a medium of illegal exchanges without destroying the cryptocurrency market as a whole.

  • Increase communications between various governments in order to make it easier to detect certain patterns
  • Increase annual reporting standards from the companies that use bitcoin as a legitimate purpose (Expedia, Microsoft, Subway, etc.)
  • Develop software that can effectively detect when the public ledger is exhibiting any irregularities (and subsidize or offer tax credits for these efforts if necessary)
  • Shift the focus away from digital methods of payment and towards the original, tangible production of illegal goods (drugs, weapons, etc.)
  • Maintain the decentralized nature of bitcoin while simultaneously creating a centralized medium for self-regulation
  • Offer benefits (such as financial rewards) to cryptocurrency users that are able to effectively identify various threats

Unfortunately, there is no clear path forward that will immediately resolve all of the issues associated with bitcoin and other cryptocurrencies. However, due to the fact that the cryptocurrency market itself is still less than a decade old, it seems that nothing is permanently set in stone and there are certainly some useful changes that can be made.

Conclusion

Though it certainly has a wide range of risks associated with it, the many benefits that are exhibited by the cryptocurrency market suggests that this market is one that is here to stay. The fact that bitcoin is frequently used as the primary medium of exchange for criminal enterprises around the world certainly gives the public a legitimate reason to be concerned. But with a concentrated effort that focuses on deterring criminal activity – rather than the simple use of an alternative currency – it seems that progress can certainly be made in an objectively positive direction.

Top Three Trends in Crypto to Watch Right Now

By now, just about everyone has heard of cryptocurrency. The global crypto industry is evolving at a rapid pace and trends are changing constantly. As the co-founder and COO of BitcoinIRA.com, the world’s largest and most secure cryptocurrency IRA platform, I am acutely aware of how quickly space is changing. From changes in regulation to widespread adoption of blockchain technology, here we will explore the top three crypto trends to watch right now.

  1. The regulatory and decentralized technology sectors are working together

2018 has been a year of regulatory measures for the cryptocurrency space. In March, the SEC released a statement requiring all crypto trading platforms to register with the SEC as securities in order to continue operating. Also this year, Facebook, Twitter, and Google all placed bans crypto advertising.

Many crypto enthusiasts, who flocked to this formerly unregulated sector because of its decentralization and anonymity, initially feared that the increase in regulatory measures would infringe upon all they valued about crypto in the first place. But with time, it is becoming clearer that this is not the case: in fact, the regulators and innovators in the decentralized technology space are in fact working together.

In February of this year, Chairman of the CFTC J. Christopher Giancarlo set the precedent for a cooperative relationship between the two sectors when he advocated for a “do no harm” approach to regulating cryptocurrency. “I believe that ‘do no harm’ is the right overarching approach for distributed ledger technology… With the proper balance of sound policy, regulatory oversight and private sector innovation, new technologies will allow American markets to evolve in responsible ways and continue to grow our economy and increase prosperity,” Giancarlo said.

While this may have seemed idealistic at the time, the government’s regard for decentralized, distributed technology has actually stayed relatively consistent over the last several months. Just last week, William Hinman, the director of the division of finance for the Securities and Exchange Commission (SEC) publicly declared that Ethereum is not a security. This came on the heels of a similar statement that SEC chair Jay Clayton made in April. “Based on my understanding of the present state of ether, the Ethereum network, and its decentralized structure, current offers and sales of ether are not securities transactions,” Hinman said. “And, as with Bitcoin, applying the disclosure regime of the federal securities laws to current transactions in ether would seem to add little value.”

In turn, Joe Lubin, co-founder of Ethereum and founder of major Ethereum application company ConsenSys, expressed gratitude for the SEC’s decision. “Ether and other next-generation consumer utility tokens will continue evolving the web towards networks that are more fair, secure, and evenly distributed. ConsenSys looks forward to continuing to engage with regulators around the globe to promote responsible adoption of this transformative technology” Lubin said, demonstrating the decentralized sector’s commitment to cooperation and transparency.

In my opinion, these announcements clear up some of the “regulatory uncertainty” that Tom Lee thought to be contributing to price stagnation in the crypto space and are a big win for the crypto industry as a whole.

  1. ICOs have taken a hit.

According to ICOData.io, ICO funding decreased from roughly $1.48 billion in January to around $288 million so far in June. June isn’t over yet, but that is a huge decline and cannot be ignored.

The SEC still considers most tokens purchased through ICOs to be securities, and that looming threat of regulation has likely discouraged some investors from participating in funding rounds.

Additionally, the SEC has cracked down on fraudulent ICOs in recent months, even going as far as launching its own illegitimate ICO as a warning to potential investors. Moreover, The Wall Street Journal conducted an investigation into ICOs and discovered that investors sank more than $1 billion into 271 ICOs that had clear red flags. All of these factors have likely played a role in the decrease in ICO funding across the industry. It is possible things will pick back up once the dust settles, but for now, launching and promoting a successful ICO is going to be an uphill battle.


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  1. Blockchain technology is on the rise.

There’s a misconception among those that are new to crypto that blockchain technology is only used for decentralized digital payment transactions, and that’s just not true. Blockchain technology can be leveraged for a variety of purposes, tracking transactions of all kinds, and it is soaring in popularity. The size of the global blockchain market is projected to reach $2.3 billion by 2021 and some of the world’s most prominent companies are already leveraging the emerging tech. One particularly exciting example is IBM Blockchain, a platform that enables companies from a wide range of industries – from retail to insurance – to reap the efficiency and transparency benefits that blockchain offers. And just yesterday, retail giant Walmart was awarded three blockchain-related patents. The first is for a medical records system that would enable patient data to be stored in a distributed ledger. The second is for a blockchain-based energy network, and the third is to allow consumers to securely control or limit access to a real or virtual space by leveraging cryptographic keys stored on a blockchain. So why does this matter for crypto? Because blockchain and crypto go hand-in-hand, so increased adoption of blockchain is inherently good for crypto.

These three trends will likely continue impacting the crypto industry in the coming weeks and months, but as with anything in crypto, there’s no telling what will happen next. The only thing we know for certain is that you can’t be certain of anything – and to me, that makes coming to work each day extremely exciting.

This article was written By Chris Kline, Co-founder, and COO at Bitcoin IRA

Social Entertainment will be Revolutionized by Blockchain

Blockchain may have once been considered a fad that would pass, but as time passes, the use of blockchain tech becomes ever more present, as the ever-widening number of industries embracing the concept and the technology.

Social entertainment, same as Bitcoin and other cryptocurrencies, has jumped on the blockchain bandwagon, with You42 being the first to develop a platform that brings games, music, video, sports, news to you in one central social space.

For the fans, the single platform brings them ever closer to the artists and authors, while record labels, studios, artists, authors, and creators are able to maxim their earning potential by cutting out the middlemen that eat away at their respective earnings potentials.

In the music and film industries, streaming has become particularly popular. With the likes of YouTube, Spotify and Netflix taking the mass market share, control has essentially just shifted away from the film production companies and music record labels to the new platforms that have benefited from mass audiences, YouTube alone drawing in over 1 billion users.

With artists becoming ever more conscious of the loss of earnings, the power of the larger social entertainment platforms being similar to the record labels and production companies that are responsible for distributing of product to the mass market. The availability of blockchain technology and the arrival of You42 Platform could not have come at a better time.

You42 is looking to bring an end to the days of the record label executives demanding high fees for recording and distribution, by bringing the artists and their audiences together on the You42 platform.

Musicians will undoubtedly be watching closely to see whether You42 is able to deliver on its promise, the greatest significance from an artist’s perspective being the number of users of the You42 platform and the reach to the mass market. The good news is that You42 is a web application built in HTML5 that can be accessed through a browser on any device.

The You42 initial coin offering is scheduled to kick off on 2nd July 2018, with the pre-sale having already taken place back in April. The Beta version of You42 is already available for select users to get a feel of the platform. The platform go-live date will follow the closing of the initial coin offering.

You42 will be issuing a U42 Token through the ICO, with the token being described as a service token used to purchase advertising in a per-use or per-display model based on a rate set by the platform at the time of the purchase. The token is based on the Ethereum ERC-20 token standard.

U42 Token holders can place advertisements on the You42 Platform by using a compatible Ethereum wallet to access the U42 Token smart contract and transfer tokens for services, with top-ranking content creators on the You42 Platform receiving U42 Tokens as a result of their contributions to the platform.

U42 Tokens can also be used to purchase Ucoins, which can be used within the You42 Platform to interact with other content creators.

The You42 Roadmap can be summarised as follows:

  • Platform planning and early-stage development – 2016
  • Integration of Upload & Search Functionality – 2017
  • Social feed & Messaging Feature Sets – 2017
  • OTT Content (2017)
  • Privacy Policy & TOS Review (2017)
  • Token Infrastructure: design, economy specs and advertising module – 2018
  • Internal Development Team Staffing (2018)
  • Platform Launch & ICO – initial platform release and token sale begin – 2018.

The details of the token sale are

  • Pre-Sale: April 23rd, 2018 (Accredited Investor Sale)
  • Public Sale: 2nd July 2018
  • Ticker: U42
  • ICO Token Price: 1 U42 = 0.50 USD
  • Fundraising Goal: USD50m (USD21m raised to-date)
  • Total Tokens: 525,000,000
  • Available for Token Sale: 60%
  • Know Your Customer (KYC): Yes
  • Token Ineligibility: Mainland China & South Korea
  • Accepts: Ethereum (ETH)
  • Token Issue: Upon Close of the Public Sale.

The Fundamental Differences Between The Banking System And Private Blockchain

The banking system is characterized by central banks which have some degree of control over commercial banks, and as such, they operate in a centralized system. A private blockchain does not have a central authority and therefore the system is decentralized.

In order to understand which one is the ideal one, it is important to look at what the two solutions offer. The banking system has existed for decades and it is therefore tried and tested. However, it also has its downsides such as slow and expensive transactions through services such as Swift. On the flip side, the decentralized nature of a private blockchain means there is very little regulation and thus opening doors for evils such as money laundering, facilitating drug trafficking and funding terrorist activities.

The centralized nature of the banking system and the fact that it relies on databases that create points of weakness making them more susceptible to hacking. The centralization also makes the banking system also increases the potential impact of hard economic times. The decentralization in a private blockchain plus the fact that blockchains are virtually unhackable eliminates some of the problems but the lack of centralization raises governance issues.


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Can private blockchain and the banking system coexist?

It is difficult to choose between the two or determine which one of the two will be the ideal system to power the future of money. However, there are some things that are clear such as the fact that the banking system has been tried and tested and it works despite some issues and problems. Cryptocurrencies have proven to be innovative and a valuable part of the future but did not yet proved to be a reliable banking system.

In short, both the banking system and private blockchains have their strengths and their weaknesses. Rather than looking at them in terms of who is the best, a third option might be possible. This refers to the interdependence between privacy blockchain and the banking system and this is something that has already started happening.

Developers have been working on hybrid blockchains which feature a combination of public and private blockchains that can be used by banks and other financial institutions to deliver financial services. One such example is Ripple’s (XRP) blockchain which facilitates rapid transactions and is also designed to enable cross-border banking.

Public blockchains have been known to be slow and expensive while private blockchains have previously been criticized for encouraging the use of cryptocurrencies for illegal purposes. Hybrid blockchains are designed to overcome these issues while also making it possible for the integration of blockchain technology into the banking system. Cryptocurrencies might, therefore, have a place in the future of the banking industry as banks and other traditional companies become more open-minded about the possibilities of digital currencies.

Blockchain: What comes first? An Opportunity or a Threat

Blockchain, with time, has gained a momentum in the technological debate since 2016. First came Bitcoin (in terms of debate), then came Ethereum, Blockchain followed and now, every other Linkedin update announces an ICO launch or an exchange. So, what allowed these ongoing controversial talks? Performance, and the unexpected promise of decentralized Technology-Power by the people and for the people. However, the world took time to understand that Bitcoin was a cryptocurrency powered by Blockchain, but it did not take time, for the Governments and the Banks to sense the threat; a threat to their decades of established control.

No doubt, Blockchain represents an important opportunity to revolutionize payments, supply chains, and revenue streams but it is also true that there are several unknown risks for both organizations and governments. What business leaders fail to understand is the actual grip of this emerging technology, which, does require an explaining!

Opportunities: Blockchain

The adoption of IoT (Internet of Things):

The blend of physical and digital worlds, IoT has been around some time now; 2017 saw around 31% increase in IoT connected devices, i.e. around 8 billion, according to an analysis firm, Gartner. This is set to reach 20 billion connected devices by the end of 2020. Now, since IoT is not the only serious technology on the run, accounting backbone, blockchain technology is capable to fix one big problem of IoT, i.e. security infrastructure.

In addition to the security fix, IoT can now expand its capabilities, that is ensuring a reliable and fast connection. Means, that in so many ways, Blockchain and IoT are a perfect pair. Blockchain’s inevitable decentralized network and embedded smart contracts are the significant solutions for IoT security concerns. Let’s have a look at the benefits of convergence of IoT and Blockchain:

  1. Flexible and new jobs in organizations
  2. Real-time data analysis and aids
  3. Revised customer experience
  4. Intelligent machines with a capability of automating tasks
  5. Reduction of waste in the supply chain
  6. New jobs in flexible organizations

According to me, Blockchain and IoT will be the best of friends in the coming 5 years.

Streamlining business across borders:

To define Blockchain in terms of business; it is a facilitator of automated tracking of every single transaction. Having a potential of at least partially automating accounting and compliance, Blockchain has opened doors to a more transparent auditing, further connecting industries with new global customers, an aim every industry pledges for.

According to Fay Shong, who is the Oil & Gas Strategy Leader of EnY, quotes: “Blockchain has increasing relevance to the oil and gas industry as a mechanism to reduce operating cost. Even more relevant, however, is blockchain’s ability to transform the contracting process given its aptitude to provide a secure form of collaboration across multiple parties”

He continues to mention: “As the oil and gas industry increasingly leverages sensor technology across upstream and downstream assets, the ability for blockchain to store transactions and accounting data directly on these devices can compress process time by connecting assets directly to services contracts.”

Not only this, Blockchain, which was originally created to power cryptocurrencies, can also forge a system of a brand new foreign exchange which can reduce the additional costs involved in doing cross-border business.

Commerce and Government:

The whole framework of global commerce presents a clean opportunity for blockchain implementation. The blockchain is more convincing in this sector as it has a power to create a borderless network architecture, which can enable cross-border transactions instantly. The best part is that it can remove the now-necessary and tiring steps of several approvals. In short, the whole cost of trust that is now heavy on commerce industry can be dropped. Removal of middlemen, transaction fees of SWIFT and delays can materially diminish.

Moving towards the Governments, which are always charged with a host of duties and responsibilities can be now (finally) be discharged for the benefit of citizens. How? Blockchain can be used for safeguarding state and financial services, also assist in establishing unique identity management systems, enable safe document processing, and secure transmission of sensitive information. Since efficiency is the main problem Governments face, and painfully, all the potential progress is slowed down by bureaucratic red-tape, Blockchain can eliminate countless man hours and create a digital ledger of secured information which will be untouched and uncorrupted.

Threats: Blockchain

Dealing with the consistent Disruption:

Information is power and Blockchain has a huge potential to increase the amount of information available. New leaders will find a way to access this hidden information packed in forms of data and further analyze it, which will always be at a risky game. Since Blockchain disruptions are already happening, no denying in that; it cannot be entirely assured that it is secure and unhackable which means that the probability of a hack and data exploitation is undoubtedly high.

Since Blockchain is still fragile yet powerfully promising at this stage, industry leaders feel their current dominant positions as challenged. Coming to the most plausible part, Blockchain – a provider of an automation system built exclusively for reserving authenticity of businesses, is capable of making many career paths obsolete eventually creating new ones for the generations to come.

Chances of outside attacks are more than half:

Since Blockchain is so far theoretically enduring; meaning, the past records lying on the whole network is incorruptible, the chances of the whole network to increase in size is evidently high. However, not all Blockchain application needs to be established on a large scale network; this alone fact unlocks the probability of an outside attack by a good 51%. Speaking technically, a 51% attack is a situation where a group of nodes that controls a 51% hashing power of the entire Blockchain network; a simple code manipulation can ruin the whole network. The consequence of the same is a recipe for disaster.

Blockchain and Environmental regulation:

The whole Blockchain implementation requires several systems located at different places owing to its decentralized rule, this alone, contributes to the fact that a lot of electricity is required to power it. Since the whole Bitcoin network is already utilizing tons of energy, this burden will eventually become considerable and later debatable. A large-scale implementation of Blockchain will soon invite a lot of opposition from world leaders and that day won’t be far, where ugly politics gets woven in it.

Cryptocurrencies in May – Month in Review

Below you can find an overview of what happened in May in the world of cryptocurrencies – brought to you by SimpleFX CFDs trading platform.

It is always uplifting to see how big impact the cryptocurrencies have on mainstream businesses, whether they distance themselves from it or not. Martina Hund-Mejean, Mastercard CFO reported on the decrease in company’s cross-border transactions volume and attributed it to some banks having banned crypto purchases by credit cards. Conversely, Jen-Hsun Huang, Nvidia’s CEO admitted that an increase in demand for GPUs caused by crypto miners has led to a shortage of the graphics cards. On different occasions, both companies’ representatives stated that they do not model cryptocurrencies in their earnings projections, likely because they find it difficult to predict the pace of the sector’s development. That said, the impact of cryptocurrencies is evident and reflected in the books.

Get Into Cryptocurrency Trading Today

In May we could also witness an interesting turn in terms of how the cryptocurrencies ecosystem is perceived by countries that formerly had mixed feelings about it, to put it mildly. Xi Jinping, the Chinese President mentioned blockchain as one of the technologies shaping the current economic landscape, along with the Internet of Things and Artificial Intelligence, and noted that China should pursue research in this area. One might argue that blockchain and cryptocurrencies are not the same; however, this is Jinping’s virtually first positive opinion about the industry presented in public.

In a similar vein, the new head of South Korea’s Financial Supervisory Service, Yoon Suk-Heun spoke about cryptocurrencies’ positive aspects and possibly loosening the crypto regulations. This view was reiterated by the country’s National Assembly, whose Special Committee of the Fourth Industrial Revolution postulated introducing solutions that will allow for conducting ICOs, provided the investors’ rights are catered for.

On May 22nd we had an eighth anniversary of the famous pizza purchase, which was paid for with Bitcoin – 10k BTC to be exact. In light of how the cryptocurrency’s price has subsequently increased, a programmer Laszlo Hanyecz has definitely gone down in history; however, probably not as he would like to. On the other hand, who knew that the amount spent on two pizzas would equal ca. $77 million in 2018.

Blockchain Technology Is About to Open the pre-IPO Market to Retail Investors

Private companies are staying private for much longer as they continue to find fewer and fewer reasons to conduct an IPO. A recent study has revealed that 18 years ago, companies usually take about 3 to 5 years to transition from being venture-backed to running an IPO. As at 2016, companies typically spend 10 to 12 years in their venture-backed stage before they make the leap for an IPO. (see chart below).

Staying in the pre-IPO venture-backed phase surprisingly provides some benefits to corporations. To begin with, a private company is subject to fewer levels of regulations, scrutiny, and financial reporting in relation to public companies. Secondly, a private company planning an IPO can expect to spend between 5% to 7% of gross proceeds in facilitating the IPO. In fact, a private company can expect to incur as much as $1.5million in annual recurring costs for going public.

Thirdly, a public company is at the risk of a hostile takeover that could water down the influence of the founding team and change the corporate direction. Lastly, many pre-IPO companies have deep-pockets, huge revenues, and strong brand recognition; hence, going public doesn’t necessarily have much value to them. This article provides insights into how a blockchain platform seeks to help pre-IPO companies stay private without frustrating the desire of their early-stage investors to exit.

Here’s why many firms aren’t keen on going public

Choosing to stay private instead of going public births its fair share of disadvantages, to the company, its current investors, and potential investors. Firstly, companies that choose to remain in the pre-IPO stage often wear out their investors with liquidity issues. The shares of a private company are fundamentally illiquid for the most part because such share is often locked down with vesting restrictions.

Some founders, seed stage investors, employees, service providers and some venture capital firms who expecting to get exponential ROI often find out that they can’t cash out of their investment because there’s no exit.

Secondly, potential investors who would love to be a part of the growth story are often locked out because the stock is not on the market. Traditional investors often chase the valuation increment that a company sees prior to its IPO and immediately after its stock reaches the market. However, retail investors often have to wait many years (sometimes until the growth has thinned out, see Snapchat) before the stock is available to them.

Thirdly, there’s a practical limit on the amount of money that a pre-IPO company can rise to pursue aggressive growth, expansion, and consolidate market share. One could argue that the company could raise more money by doing additional rounds of funding, but such rounds often dilute the stocks and investors with low digit stakes often find out that they own lesser and lesser stake in the company as the dilution continues.

A blockchain-based solution that opens the secondary market

The Elephant is a blockchain-based platform that wants to tokenize the equity rights of promising private companies globally by leveraging blockchain technology to create trust and liquidity in an otherwise trustless and illiquid environment. The Elephant provides an avenue to discover and access the stock of pre-IPO growth-stage companies in a pseudo-secondary market environment.

The firm considers itself a bridge between the world of cryptocurrencies and the traditional secondary market for Wall Street investors who are naturally skeptical about crypto. For one, unlike cryptos such as Bitcoin, Ethereum or Ripple, many investments in the tokens listed in ICOs (initial coin offerings) are nothing more than an investment in a landing page and a whitepaper. In many cases, investors need to be hopeful that the team behind the ICO will be able to execute the lofty ideas in their whitepaper.

With The Elephant Platform, cryptocurrency investors get to invest in tokens that are linked to real assets, which are shares of existing real-world pre-IPO companies. Purchasing the equity tokens of a firm listed on The Elephant helps you to technically own a stake in the company and the value of your tokens rise as the value of the underlying company rises.

In turn, private shareowners (founders, employees, service providers) and investors of pre-IPO companies also get an opportunity to unlock the latent value in their stakes by turning such stake to equity tokens and selling the tokens on The Elephant Platform. The Elephant homes to create a win-win situation for all stakeholders because the blockchain-based nature of its platform facilitates a near-instant peer-to-peer transaction in the creation and sales of equity tokens. The best part is that transaction costs are minimal and without the overly burdensome regulatory process of traditional secondary markets.

The best of both worlds

Blockchain-powered equity tokens are shaping up to be a game-changer in the unending rivalry between successful pre-IPO companies who want to maintain the status quo and early-stage investors that want an exit. With equity tokens, pre-IPO companies won’t feel pressured to go public just because early-stage investors can wait to make an exit. Early stage investors will also stop feeling that they are trapped in a deal while missing other potential opportunities – the tokens create a cost-effective and efficiently fast way to exit investments.

Bitcoin Short Term Struggles, while Blockchain finds Friends

Deloitte Issues a Blockchain Report and Significant Warning to Naysayers

Deloitte, the giant accounting, and consulting business have published a report which has essentially warned corporations to investigate and implement the use of blockchain in the coming years or fall behind within their respective industries.

The enthusiasm for blockchain and its potential impact via distributed ledgers is increasing. Passionate businesses which believe they can vastly improve and replace cumbersome and chaotic data records whose systems are prone to mistakes are manifesting across the corporate landscape.

Not only is the financial industry focusing on blockchain because of the growing cryptocurrency trading industry which often endeavors to speculate on the value of the coins but they are intrigued by the promise of a better payments system. And manufacturing, healthcare, and logistical companies are some of the private sectors investigating the use of the technology.

United Nations and the World Food Programme Testing Distributed Ledgers

Charities and government accounting offices within the public domain are also studying the benefits of blockchain and beginning to run pilot programs to test and quantify results. The United Nations announced earlier this year they are intent on implementing a system which helps the likes of the World Food Programme and other NGOs.

The ability to share via a secure network which is transparent a precise record of data via blockchain with traceable entry points, and what the next steps will be – allows users to focus on accurate information and has the capability of decreasing waste while helping quantify a variety of results which will likely produce reduced costs for consumers.


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FedEx and IBM are Two Major Players Using Blockchain Technology

FedEx and IBM are just two of the many global companies which are beginning to initiate pilot blockchain programs. FedEx is intent on allowing blockchain to help its logistic services. IBM is building a platform which will provide its services to other corporations in an effort to create a solid base of communication digitally, which will help them create a history of transactions and accountability.

So while Bitcoin and other cryptocurrencies suffer from their current downturn, investors should also keep their eyes on the blockchain technology which is the foundation of the industry.

Yaron Mazor is a senior analyst at SuperTraderTV.

SuperTraderTV Academy is a leader in investing and stock trading education. Sign up for a class today to learn proven strategies on how to trade smarter.

Google Has Offered work to Ethereum’s Founder, Vitalik Buterin

An interesting offer

The offer is even more interesting than it appears at first glance. Before explaining the basis of this statement, however, it is better to review the information that is publicly available.

vitalik butterin google

In its original tweet, Vitalik did not hide the recruiter’s name, email address or profile image. It was a short e-mail, and a part of it was cropped out of the screenshot he posted. The translated text is: “I hope you’re fine and enjoying the weekend” and in the line below “Google makes sense for you now or in the near future”.  The tweet was then deleted, perhaps because of concerns about the privacy of the recruiter due to the uncensored screenshot.

That being said, only 41% of the survey respondents were in favor of the proposal received from Buterin. I, personally, would be very surprised if this offer was accepted. In particular, because Ethereum is developing rapidly and dynamically and remains among the most promising cryptocurrencies (according to many the most promising) and therefore offers great opportunities to its founder. However, if this proposal were to be accepted, the consequences on the price of ETH would surely not be slight ones. This is because Vitalik is a kind of frontman to the Ethereum project, a guide for the entire community.

Analysis

Recently, however, Google has not shown a positive attitude towards cryptocurrencies and ICOs. In particular, it decided to prevent access to advertisements on its AdWords platform. During the same month, however, news emerged that Google is working on its own blockchain. Its goal is to provide cloud and transactional services.

The blockchain is well suited to improve the security of existing solutions offered such as Google Drive. It would, therefore, make sense to expect the founder of Ethereum to be responsible for the development of such a project. In addition, Google has invested in several other blockchain-based solutions, such as Ripple, LedgerX or Veem. In short, Google has shown great interest in the sector and not without good reason.

Google, in fact, like Facebook (which has created its own team dedicated to the development blockchain, not to mention the fact that they are already the first rumors about a facecoin) is a company that has the ability to make a mainstream cryptocurrency. Actually, thanks to its undoubted influence on the smartphone market, Google could be even more advantaged than Facebook is. In fact, this company has a number of unique possibilities offered by controlling an entire ecosystem of operating systems and services in which it could integrate its blockchain.

Google’s advantages

In fact, Google could not only integrate blockchain authentication within its services or use it for the storage of the most sensitive data (which would be a very advantageous step given the recent scandals regarding Facebook). It would also be possible to integrate a wallet directly into the Android operating system, theoretically also a full node or even formulate specific hardware requirements to ensure efficiency and security. Thus, making all future Android smartphones something similar to what is being designed by Huawei, Sirin Labs or HTC. Such a scenario would make mass adoption much faster

Interview with Franklin Song, Co-Founder & CEO of DATA

How was the idea of DATA born?

DATA was a brainchild of co-founders and college classmates, Franklin Song, Chairman of DATA Foundation and Victor Ye, Lead Engineer. They both studied Computer Science Master’s program in the US and worked in a large enterprise or social networks. Franklin had started three companies including the mobile game development house Soul Game and the mobile video ads optimization provider Yomob. Their interest in blockchain was rooted in the deep understanding of large-scale distributed systems and artificial intelligence and what the decentralized blockchain technology can be applied toward solving numerous shortcomings of known data fraud that exists and costs immensely in the technology world of advertising ecosystem where data has been created, consumed and paid for. According to the recent report, over 45% of the data traffic flowing in all the ads networks up and down the stream is fraudulent.

Thus Franklin assembled a team including experts that have had years of experiences in various advertising technology sectors and developed the DATA project. The central theme of DATA project is to provide a set of open protocols based on blockchain’s decentralized general ledger and powered by AI as well as to establish a data trust alliance.  The alliance is a vehicle with the shared goals to improve the efficiency of cooperation amongst data producers, data processors, and data consumers, benefitting from an effective reduction in data fraud on the entire ecosystem.

Franklin is the founder and chairman of Blockchain DATA Foundation. He held EE and MSEE from Tsinghua University and Yale University respectively and previously worked in MSRA and Oracle in Silicon Valley. Franklin is a serial entrepreneur. He also founded Yomob a service platform aiming at optimizing global mobile monetization. It has more than 2,000 mobile developers and serves 120 million global end users monthly. Yomob’s founding mission is to help mobile developers to succeed. However, during the process of providing advertising monetization optimization services, Franklin learned that fraudulent data flow has caused advertisers and publishers heavy losses and indirectly reduced the income of developers who are doing practical work. While the current Internet technology cannot prevent data falsification from the source. He hopes to find an effective way to solve the problem that “terminal data fraud” has become increasingly common and severe.

“Advertising fraud” refers to activities issued by advertisers, advertising operators, and advertising publishers intentionally make false goods or services during advertising campaigns, or hide the facts, which may cause consumers to make wrong consumption decisions. The White Paper for Anti-Fraud Advertising in AdMaster describes many types of fraud: Non-Human Traffic, content bias, material that hasn’t been shown, false sales leads, multiple activations or repeated conversions, and so on. In 2016, China’s invalid traffic accounted for 30.2% of the total. This is a 100-billion advertising market. Such a high ratio is an unimaginable waste.

Around June 2017, Franklin found his old friend Victor in Silicon Valley. Victor graduated from Tsinghua University and Columbia University and worked for LinkedIn, Twitter, and Snapchat. Since 2013, he has begun to study large-scale distributed system and had a deep research about data encryption and blockchain technology. Victor is making great efforts to explore its application and usage in real life. After several months of communication and research, they believed that Data Authentication is an area in which blockchain technology can really generate value. They decided to build a blockchain team in Silicon Valley and create the DATA project.

  • Can you explain the common people about your product?

DATA is a digital data authentication protocol based on blockchain and powered by AI technology and P2P mobile storage structure. DATA aims at providing an efficient solution for data producers, consumers, and processors, assessing the value of data through technical means, and preventing false data from entering the ecosystem, thereby enhancing the overall efficiency of the industry chain.

DATA Project is the new paradigm for a secured and trusted digital economy, where fraud is proactively detected and prevented much earlier before the damage ripples into the trading chain.  The entire data flow is open, decentralized and cannot be altered.

  • As the company accomplished its ICO, what has already been done and what are you going to create with the money collected by the ICO?

DATA only has done institution only private sale in mid-Jan 2018, we have made substantial progress in technology development, strategic partnership, and community building.

For technology development, we work on both the DATA main net and prototype.

The backbone of DATA is based on Ethermint open-source engine, whereas we are able to store extra content in user account system, it’s device level reputation data. Our internal test net is running in a small test suite that’s globally distributed. We plan to launch open test net and contribute code to open source in the second quarter, 2018.

In April, the prototype of DATA integration with Yomob Advertising SDK is successfully completed and tested. The prototype SDK is currently launched on one of Yomob’s developers, Zap Zombies. More selected partners will be introduced in the near future, and the SDK will gradually be rolled out to 2000+ developers and more than 120 million MAUs on Yomob platform. There will be a detailed guide to elaborate how to gain DATA reward soon.

In terms of the strategic partnership, we founded Data Trust Alliance, which is an alliance that aims to build an authentic and trusted data ecosystem. Currently, our members include Blue Focus – the largest communication group in Asia, Kochava – the digital marketing data analysis company and its blockchain based digital marketing platform XCHNG. These partners help expand the application scenarios and use cases by adopting consensus with  DATA protocol.  We have also formed a strategic partnership with blockchain projects such as Distributed Credit Chain (DCC), GIFTO (GTO) and Content Neutrality Network (CNN).

As for community building, DATA has nearly 130K fans all over the world. DTA tokens are held by 160K investors with over 230K total transactions. Last week, DATA’s Korean version whitepaper and official website have been translated by local blockchain marketing & consulting KryptoSeoul.  We will update our official website with the support of Korean language content.

  • How does DATA differ from similar services? How can your innovative service assist the advertising industry?

DATA system is composed of four layers:

  1. P2P mobile metadata management layer (M³), a off-chain storage that was inspired by IPFS but designed especially for mobile devices based on Distributed Hash Table (DHT) and Erasure Code;
  2. Blockchain layer, a standalone public chain built from a fork of Ethereum on Tendermint, the Ethermint project;
  3. SDK management layer, in which AI technologies are used to generate AI models for device level reputation modeling and transfer the reputation and activity logs into M³ for peer verification;
  4. Application process layer consists of protocols and smart contracts to perform fraud detection, micropayment, and other services.

In DATA, App developers are rewarded for integrating into the system while users are rewarded for their attention contribution under proof of attention (PoA) mining rules.

The DATA project’s most innovative edge is to proactively identify and measure the fraudulent user data before being injected into the entire network.  While fraud pattern is detected,  the reward is granted to a true user for his or her attention consuming the advertisements and to the associated device contributing to in the P2P mobile storage sharing.

Storing a large scale of user data on blockchain is challenging. DATA introduces a decentralized Mobile Metadata Management system (M³) to store data in end devices while record user reputation on-chain. M³ can also be applied widely as an open infrastructure in blockchain industry.

  • How can DATA improve trust between players in the digital ecosystem?

DATA Project is designed as an open-source protocol, to disrupt the digital landscape, using the most current and proven blockchain technology and powered by AI, enabling data authentication stacked in the decentralized infrastructure.  Data is highly encrypted, stored on the local device yet updated and shared in real-time.

In this economy, the reward is given to end users and publishers with tokens for the actual consumption. A reputation modeling is applied to determine the right amount of reward.  For example, a zombie device can be immediately detected as the pattern of attention is gathered and analyzed. Advertisers are pleased receiving solid ROI instead of spending on chasing and eliminating fraudulently. Trust amongst all parties is measured, certified and incentivized.

  • How can anyone join DATA?

As end-users, anyone can join DATA by signing up for DATA reward system on any apps that partner with DATA. Once register, users can get DATA points reward based on Proof of Attention (PoA) rules. And then, they can use DATA points to exchange for DATA tokens (DTA). Traditionally, users are not rewarded for watching ads on the Internet but in DATA ecosystem, every user can get a reward after paying attention to ads on partner’s platforms/apps.

As mobile developers or platforms, they can join DATA as publishers. Publishers will get a reward based on the “attention data” generated from end-users through using the apps or platforms.

As qualified companies or institutes, they can join DATA as validator nodes in the system. Rewards for validators are issued on each block creation following DPoS rules.

Here is specific guidance on how to get DATA reward token DTA for different players in DATA ecosystem.

In DPoS systems, validators (like miners in PoW systems) can be rewarded for their contribution to the network. In DATA, users and publishers get most of the reward for their attention and data contribution.

Tokens are to be distributed in the following manner:

Initial Launch:

The supply of DATA Tokens (DTA) at initial launch will be 11.5 billion tokens, out of which no more than 40% will be sold to Token investors, and the rest belongs to team, advisors, and Blockchain Data Foundation, subject to vesting terms.

PoA Mining-like Process:

The same amount of tokens as the supply at the initial launch will be distributed as Attention Reward in the mining-like process.

Each relevant contributor is properly incentivized according to the following principles:

  • Rewards for users and publishers are issued on a daily basis and follow this “Proof of Attention” (PoA) rules.
  • Users daily reward depends on its attention contribution represented by its reputation determined by validators.
  • Rewards for validators are issued on each block creation following DPoS rules.

As a first step when launching DATA prototype, it will allow our community to get reward under Proof of Attention (PoA). This will also enlarge our community and holder token since some no coiners will be converted to coiners by signing up DATA reward system.

The attention reward distribution amount has a halving schedule similar to that of Bitcoins (e.g. halving about every 4 years). And when the newly minted amount diminishes, we expect DATA and DATA Tokens (DTA) to become industry protocol and widely accepted. That is the time when advertisers start to purchase DTA as the currency in the ad flow, and the token flow gradually substitutes current money flow in the digital ads ecosystem. The DTA currency represents the real value of the opportunity cost of user attention, which is highly relevant to the user acquisition cost. Given that the aggregate market value of the Internet is continuously growing while the total cyber attention from humans is limited to, it is expected that the value of DTA will keep increasing as the time goes by.

  • Why did you need Token Sale?

As all technology startups, we need to raise fund for our technology development, user rewards, daily operation, and compensation. For that, we had rather successfully completed the institute-only private sale in January 2018.

For every player that contributes in establishing a healthier eco-system, we want to incentivize end-users, publishers, and validators with utility tokens that facilitate the process of data authentication in the ecosystem where such utility can be of true value.

  • What are your plans for the future?

We have made great progress accelerating our technology development on DATA chain and product.  In the meantime,  we are reaching out to more potential partners to join our Data Trust Alliance.  The latter is a crucial part as we intend to keep the ecosystem open to enable the creation of more application scenarios and expansion of a strong community growth based on the nature of consensus in ensuring fraud reduction and data authentication.

Here is the detailed roadmap for DATA project.

PHASE I: Development and Marketing

2018 Q1 Blockchain Data Foundation founded.

2018 Q1 DATA Project institution-only private token sale as ERC20 token on Ethererum. Marketing strategy formed.

2018 Q2 DATA first prototype initial testing including DTA distribution system and etc.

PHASE II: Internal Release to Test on Yomob

2018 Q3 Alpha launch of DATA Chain and system, integrated inside Yomob’s SDK (DATA version). First Go-to-market strategy executed.

2018 Q3 Finish Closed Alpha test with selected participants from developers on Yomob platform. Distribute DTA with developers, users, and miners.
2018 Q4 Conversion of ERC20 based DATA Token to a native token. Closed Beta launch of DATA on Yomob platform with most of its developers.

2019 Q1 Open Beta launch of DATA on Yomob platform. Release Beta version of DATA SDK Protocol.

PHASE III: Soft Launch to Early Adopters

2019 Q1 Start industry collaboration with initial strategic partners including both ad networks and developers. Start building DATA ecosystem and generate DTA.

2019 Q1 Release Alpha Version of M³ for initial testing.

PHASE IV: Launch for Broader Adoption through Ecosystem

2019 Q2 Fully functional DATA system to include a wallet, micropayment. Provide external APIs / SDK solutions for developers to enable the in-app purchase of virtual goods and services to their end users.

2019 Q2 Release Beta Version of M³.

2019 Q3 Partner with selected industry strategic partners such as mobile SaaS service providers, App Stores, developers, ad networks, DSPs, ad exchanges, SSPs and etc. for utilizing DTA as a currency for more use cases.

2019 Q4 Offical launch of DATA Project and parallel marketing promotion for broad industry adoption. Open invite to engage partners up- and down-stream of the ecosystem.

Overall, the planning in our roadmap is rather conservative, but it guarantees the punctuality of our delivery. We expect our progress to be much faster than that presented in the roadmap. Our goal is to build a large ecosystem and we have to start off with small groups of communities and then grow them into something big and self-sustainable. There is no doubt that we have a long way to go. We hope that, together with our great community, we can move forward step by step and eventually find our position in not only the blockchain world but also the broader society.

Consensus Conference in NYC Drawing Massive Crowd

The event is being attended by many of the top players in the cryptocurrency industry and conditions inside the conference are crowded. The event has sparked has sparked plenty of interesting quotes and is generating a wide audience. However, Ethereum founder, Vitalik Buterin has said he is not attending the event because he believes it is charging too much. Buterin said: “I refuse to personally contribute to that level of rent-seeking.”

But cynics will be quick to point out Buterin has gotten himself plenty of publicity by saying he is not attending.

Blockchain continued to receive good comments during the event. FedEx Chief Executive said: “Blockchain has the potential to completely revolutionize what’s across the border.”


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On Wednesday, Bitcoin was trading in a negative sentiment at $8217, down 5.84%.

Yaron Mazor is a senior analyst at SuperTraderTV.

SuperTraderTV Academy is a leader in investing and stock trading education. Sign up for a class today to learn proven strategies on how to trade smarter.

Gary Cohn: “The World will Have a Global Cryptocurrency at Some Point”

That said, this form of money continues to come under harsh criticism, which is often the case with any disruptive innovation. You only have to look at social media or the internet, they were heavily vilified before they became mainstream. Indeed, we couldn’t imagine life without the internet now.

As such, to my mind, I believe we’ll see the same trend with cryptocurrencies. There are four main ways that I think show how digital currencies have moved into the mainstream over the past year.

First, some of the world’s major technology firms are investing in and using cryptocurrencies. As an example, Microsoft permits customers to use Bitcoin as payment for online gaming and apps. Bitcoin – the world’s largest cryptocurrency – is also accepted by Paypal, amongst others, as a method of payment.

Second, digital currencies are starting to be adopted by established banking groups. Indeed, the ground-breaking blockchain technology underpinning the majority of cryptocurrencies is being used by major banks including Barclays and Santander. A foreign exchange service has recently been launched by Santander that uses blockchain technology developed by digital currency, Ripple to make same-day international money transfers. It is reportedly in negotiations with other major global banks and money transfer groups to develop similar products.

Furthermore, banks including Goldman Sachs have moved from almost writing off cryptocurrencies to recently establishing a cryptocurrency trading desk; and Spanish banking group, BBVA, with over 21 billion Euros in annual income, participated in one of the largest investments in the bitcoin industry.

Third, well-known international investors are joining the cryptocurrency party. Billionaire investor, George Soros, who was a previous crypto skeptic, is now investing in digital currencies. Also, the following suit is billionaire hedge fund manager, Alan Howard, and the Rothschild family, to name but a few.

Gary Cohn, a former Goldman Sachs executive who led Donald Trump’s National Economic Council said of cryptocurrencies: “The world will have a global cryptocurrency at some point”.

Cohn also mentioned his belief in the Blockchain technology: “I’m not a big believer in bitcoin, I am a believer in blockchain technology. It will be a more easily understood cryptocurrency. It will probably have some blockchain technology behind it, but it will be much more easily understood how it’s created, how it moves and how people can use it.”

Finally, fourth, a regulatory framework for the crypto sector is now inevitable. You only have to look at the July deadline for suggested cryptocurrency regulation set at the recent G20 summit in Argentina earlier this year.

Apart from Cohn, the Bank of England governor, Mark Carney followed up with statements appealing for more regulation within the cryptocurrency sector. He said in March: “The time has come to hold the crypto asset ecosystem to the same standards as the rest of the financial system. Being part of the financial system brings enormous privileges but with them great responsibilities…In my view, holding crypto asset exchanges to the same rigorous standards as those that trade securities would address a major underlap in the regulatory approach.”

One such example of this is the upbeat approach taken by Japan, which I believe should be championed. Indeed, Japan is one of the very first countries to adopt a regulatory framework to oversee trading on registered exchanges.

To my mind, interest in digital currencies will continue to grow exponentially as demand rockets in what is an increasingly digitalized and globalized world.

However, crypto isn’t without its critics. That said, I believe much of this skepticism is based on the misunderstanding. Even legendary investor, Warren Buffett said: “I get into enough trouble with the things I think I know something about. Why in the world should I take a long or short position in something I don’t know about?”

It is therefore essential that financial traditionalists, such as Mr. Buffett, set their sights further afield from the old centralized system of money and keep an open mind about cryptocurrencies.

After all, cryptocurrencies are the future, and whether crypto cynics like it or not, they are here to stay.

Bitcoin’s Lightning Network Complete Guide: How Can it Solve Bitcoin’s Biggest Problem?

Bitcoin scalability Issue

Scalability is one of the biggest issues that has made Bitcoin mainstream adoption difficult. The issue relates to the number of transactions that the bitcoin network can process at any given time.

Bitcoin ecosystem has evolved from what it used to be in the early years when it paid host to only a few dozen passionate enthusiasts. The network has grown to a point where it attracts over 10 million users a day.

An increase in the number of users, while a good thing, has resulted in an increase in the number of daily transactions carried out through the blockchain, believed to be hundreds of thousands. Increased numbers of transactions has led to delays, with some transactions taking hours to be added in the blockchain.

Despite being the biggest cryptocurrency by market cap, Bitcoin lags behind when it comes to transaction processing speeds compared to other blockchain projects. Ripple leads the pack as its blockchain processes transactions in seconds.

Hefty transaction fees is another issue that continues to dent bitcoin sentiments in the crypto sector. Transactions fees can hit highs of $28, something that is unacceptable given that the network is expected to be an improved version of online payment systems.

Concerned by the scalability menace, some developers appear to have found a solution that could address the high transaction fees as well as slow transaction speeds once and for all.

Bitcoin Lightning network is the new protocol, touted as the ultimate solution to Bitcoin’s havoc causing an issue.

What Is Bitcoin Lightning Network?

Simply put, Lightning Network is a new payment protocol that will be added on top of bitcoin to enable instant transactions between nodes in a blockchain. It is seen as the answer to bitcoin’s persistent scaling issue as it will reduce transaction fees while making it easy for people to send and receive instant payments.

Thaddeus Dryja proposed, and Joseph Poon proposed the new protocol in a white paper published in 2015. The proposed protocol consists of user-generated channels able to send payments back and forth, in a secure and trustless fashion

How Bitcoin Lightning Network Works?

For Lightning Network to operate, there must be two people looking to transact with each other using Bitcoin. In that case, the two will have to set up a multiSig wallet, which is to be used as a storage facility for bitcoins transacted.

Once a wallet address is saved on a bitcoin blockchain, a setup payment channel is opened through which the two parties can conduct an unlimited number of transactions without touching information stored on the blockchain.

It is important to note that it is not a must to set up a channel to be able to carry out a transaction with the new network. Lightning Network is designed in such a way that it can send payments to the desired node, using the shortest route possible.

With the completion of each transaction, each party involved must sign an updated balance sheet to indicate how much of the bitcoins stored in the wallet belongs to them. The channel is only closed when the two parties are done transacting.

The resulting balance on completion of the transaction would only be reflected in the blockchain on the closure of the channel. Information stored in the blockchain can be used in the event of a dispute.


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How Can Lightning Network Solve Bitcoin’s Problem?

Even though Lightning Network is yet to be fully implemented on Bitcoin Blockchain, some people have shared their experiences of using it. The experiences so far have been good with a good number of people confirming fast transaction speeds as well as reduced transaction fees.

A Reddit user claims to have used the new protocol to purchase a VPN router through a payment channel provided by TorGuard, a proxy service provider that claims to accept Lightning network. Michael Landau, a Twitter user, also claims to have made a Lightning payment on Bitcoin testnet with the transactions being confirmed in under 2 seconds. Transaction fee, in this case, was 0.000001.

Amidst the positive remarks, Lightning network may not be the ultimate cure for Bitcoins scalability issue. The protocol is only expected to phase out a good chunk of the issues. First and foremost, Lightning pre-funded channels tie up funds that could as well be used for other purposes. Because of this, people may opt to keep low balances in the channels and top them from time to time when the need arises.

The second challenge that could grip Lightning Network has to do with the fact that people could end up funding their channels at the same time. Soon after funding, the balance could diminish considerably on payments being made. Such a move could trigger liquidity issues on the network. In such a case, it could be difficult to find a payment route for large payments in some cases.

However, the illiquid problem could be solved through the creation of a large payment channel that would be left open and fully funded all the time. By doing so, there will always be a route for making payments regardless of the amount being transacted.

Benefits of Lightning Network

Earn Interest on Providing Liquidity

Using Lightning Node promises to be a win-win situation for parties, on both sides of a transaction. The network will reward users who provide liquidity by lending bitcoins to be used in the channels. It is still unclear the amount of interest Lightning Node will pay.

However, it is expected to be something exciting sure to keep people running the lightning node. For a start, the interest for lending bitcoins is expected to be high as Lightning Network looks to get its way into most people accounts.

The rate could drop as the technology is adopted’ by more people. The profits on the Lightning node can be perceived as transactions fees for using the network.

Fast Transaction Speeds

The new protocol offers the best scaling solution to a problem that has plagued Bitcoin for months. With Lightning Network, people will no longer have to wait hours for transactions to be completed.

The added layer on bitcoin will enable the processing of millions of transactions per second. The network will also allow users to enjoy the security of decentralized blockchain without having to increase the size of a blockchain

Nearly free Bitcoin Fees

Bitcoin widespread adoption has been disrupted by growing concerns over transaction fees. Transaction costs have been known to clock highs of $28, regardless of the amount one is transferring. That said, fees incurred in transacting through Bitcoin Lightning Network should be much lower than when a transaction is carried out through Bitcoin blockchain. In some cases, some people may end up being paid for using the new protocol.

The fact that Lightning fees are not paid to miners all but mean it will be a cheaper way of sending money on the network. Lightning transaction fees will end up to users on the system that stake money. The owners are expected to charge a small fee for microloans

Lightning transaction fees are expected to keep dropping as more Bitcoins hit the network. People who wish to send money also stand a chance to select custom routes, if more privacy is needed, but at extra costs.

Smaller Micropayments

The smallest amount of bitcoin that one can send now is 0.00000001 BTC. However, with Lightning Network, people will be able to send much smaller bitcoins thereby enabling micro-payments.

People in some of the world’s poorest nations cannot transact using bitcoins, but with Lightning Network, they will be able to afford transactions in the popular cryptocurrency.

Increased Decentralization

There has been growing concerns that Bitcoin blockchains could become bigger and get out of control. With the implementation of Lightning network, bitcoin blocks are expected to be smaller which will allow people to run a full node.

In addition, it will be much easier to self-authenticate bitcoin transactions and enforce bitcoin rules thereby making Bitcoins Network more decentralized.

Increase Security

The use of channels with Lightning Network will make it nearly impossible for hackers to steal people bitcoins. For example, if an exchange has open channels with each user who has a wallet, a hacker will not be able to simply take coins held in LN channels.

The only thing that hackers will be able to do with the new protocol in place, is close channels to be able to access the portion of the balance belonging to an exchange. While the same can be done without user consent, they will still have to wait for the lock-time built into the channel. During this time, an exchange would have ample time to regain control and advice users to close channels from their side.

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How Can Anyone Join Lightning Network?

Lighting Network is Off-Chain, which means it is not part of Bitcoin Record now. That said, there are a number of ways one can be able to enjoy fast bitcoin transactions at low costs via the new protocol

Using A web Wallet

The simplest way to access and enjoy the benefits of Lightning Network is to use a web wallet such as HTLC.me. The web-based lightning wallet makes it possible to start making Bitcoin payments using the protocol without any configuration.

All you need to do in this case is ask the person you would wish to transact with, to as open a Lightning wallet on the HTLC.me to be able to send them some Bitcoins

Using Desktop Wallets

There are two desktop wallets that’ make it possible to use the new bitcoin protocol. Lightning-ape wallet and Zap use Lightning Network Daemon LND as the back-end client to use balance and channels. To be able to set up the Lightning app, you will have to go to Github page and download the latest version of the app for installation. To install Zap wallet, you will have to visit its official webpage Zap.jackmallers.com to learn more

Phone Wallet

Currently, there are three phone wallet, LND, Éclair and C-Lightning designed to enable transactions through Lightning Network. Éclair is the first Android Lightning Network enabled-app that one can download on Google Play store and be able to carry out low-cost bitcoin transactions.

Lightning Network Releases

It is still unclear when lightning Network will be part and parcel of Bitcoin blockchain in addition to the third party apps that people can use, to access it. The network’s developer’s team recently released a beta version of Lightning Network Daemon that allows people to access the Bitcoin’s Lightning Network which is still in development.

The release comes after more than a year extensive research. However, there are still a number of implementations, which Lightning Network labs team is still working on, ahead of the official launch. It appears’, the official launch could happen soon, given the milestone the developer’s team has achieved so far.

For instance, Lightning network has surpassed 1000 active nodes milestone on its Bitcoin Mainnet. Since its launch in testnet and mainnet, it has continued to achieve significant growth seen by the number of bitcoin nodes joining the network.

However, there has been growing concerns about the robustness of the network’s protocol, which is important if it is to stand any chance of handling thousands of transactions on a daily basis. It is also unclear whether the protocol is super tight to ensure users don’t lose their funds in the long run.

Security considerations as well as lack of understanding of how the protocol works have been the biggest headwind that has prevented fast roll-out of the protocol.

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Blockchain and the Law: Is It Safe and Legal to Trade Cryptocurrencies?

Blockchain-based cryptocurrencies like Bitcoin are all the rage at the moment. Their unregulated and decentralized nature means they are potentially disruptive when it comes to how global currency is handled. Without having to be associated with a geopolitical force like a national government or a central bank, digital currency is likely to have a big impact on the fintech sector. However, because of the unclear nature of cryptocurrency, the legal status of Bitcoin and other altcoins is most certainly in flux. Some countries regulate crypto heavily, some not so much; in some cases, it’s banned outright. It can be difficult keeping things straight, so here are some important facts you need to know about the safety and legality of the blockchain.

No Consumer Protection Makes Jurisdictions Wary

Cryptocurrencies are iconoclastic in the extreme – these borderless virtual currencies are universal and are completely untroubled by jurisdiction or regulation. As long as you’ve got an internet connection, you’ve got access to Bitcoin and other crypto coins, or at least you should according to crypto enthusiasts everywhere. This is, however, not true universally, thanks to governments worldwide taking steps to limit the scope of crypto in their jurisdictions, with the usual rationale being that there are no consumer protections in place.

There are no comprehensive laws on the books when it comes to cryptocurrencies, though. Whether it’s differences from country to country or from one US state to another, there are no hard and fast rules when it comes to the legality of dealing with crypto wherever you live. This can make user security for cryptocurrency an issue if you’re unsure of the laws in your region or if you do business overseas. The most useful way to rectify this, therefore, is to provide as detailed information as possible depending on your specific geographic location.

North America

The United States

The US has one of the most confusing approaches to cryptocurrency. Federal approaches to digital currencies are mostly concerned with whether they can be considered taxable income, with the US Securities and Exchange Commission investigating if classifying crypto assets as securities are appropriate. On the individual state level, though, there are few states that have crypto regulations in place. Some jurisdictions, such as New York, have taken steps to require crypto businesses to comply specific regulations. A good example of this is how Coinbase had to seek licensing under NY’s BitLicense law to function within the state.

Canada

Canada doesn’t acknowledge crypto as legal tender within its borders. At the same time, the country has said that, under certain circumstances, crypto transactions may be taxable. Additional requirements for crypto companies operating within the nation include being in compliance with anti-money laundering laws, but crypto is otherwise permitted in Canada.

Europe

The European Union

Caution is the watchword in the European Union. The EU’s Central Bank has gone on record about the possibility of using crypto in money laundering, but by the same token, there’s simply not enough information on hand to make a ruling. The president of the ECB, Mario Draghi, has said as much in recent interviews.

The UK

The United Kingdom’s Financial Conduct Agency has said that it’s leaning towards classifying cryptocurrencies as commodities. There’s no movement on implementing regulation as yet, however, which means the UK is a safe place to conduct crypto-related business for now.

Asia

Australia

The Australian government requires crypto exchanges operating within its borders to be properly registered. Additionally, there are anti-money laundering regulations being written that once implemented, will require these same exchanges to be in compliance. For now, that’s all Australia has in store for crypto enthusiasts as far as regulation goes.

China

China is certainly taking crypto seriously. Crypto exchanges have been under fire, and so have bitcoin miners who up until now were being provided tax deductions and inexpensive electricity. While there’s no outright ban in place, the Chinese government is likely to crack down more in the future. The legality of cryptocurrencies remains unclear.

India

The Indian government doesn’t accept crypto as legal tender. At the same time, there are no plans to ban or regulate blockchain-based currencies. The government has, however, made it clear that cryptocurrency’s volatility and unpredictable nature can be dangerous.

Japan

Unlike the rest of the world, Japan has been at the forefront of accepting digital currencies. Bitcoin is well on its way to be considered legal tender in the country, but this also means that crypto businesses within Japan’s borders are going to be heavily regulated as a result.

Malaysia

There haven’t been any announcements yet as to their nature, but the Malaysian government – and its central bank – are hard at work on national regulations for cryptocurrency within its borders.

Russia

Vladimir Putin, Russia’s president, has been clear that he’s a proponent of cryptocurrency. There are likely regulations in the works within the country, much as is the case with Malaysia.

South Korea

South Korea is taking a hard-line approach to crypto fraud and has already made it illegal to hold an anonymous cryptocurrency account. Cryptocurrency exchanges operating within the country are also likely to come under regulatory fire soon.

Singapore

Singapore has no plans to regulate crypto quite yet. In the future, the sovereign city plans to create a regulatory framework to facilitate payments made in bitcoin, though.

Thailand

As of 2014, Thailand declared cryptocurrency not legal tender. However, this decision lifted a previous ban on the virtual currency that was in place up to that point.


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Central and South America

Argentina

Argentina’s central bank has sounded the alarm when it comes to unregulated currencies and their possible dangers. Despite that, the Argentinian government has not passed any laws in an attempt to control cryptocurrency within its borders.

Bolivia

Cryptocurrencies, and in fact any type of currency not specifically cleared by its government, have been illegal in Bolivia since 2014.

Ecuador

Bitcoin and other digital currencies have been illegal in Ecuador from 2014 as well, with the National Assembly taking steps to ensure its ban.

Mexico

Mexico’s central bank has the legal authority to regulate any crypto service company that operates within the country, thanks to a 2017 law. The country has, meanwhile, taken a page from Canada’s approach by requiring Mexico-based companies to implement anti-money laundering rules.

Africa

Morocco

Foreign exchange laws in Morocco changed in late 2017, making it illegal to conduct any business with digital currencies. Violating this rule can net you some rather steep penalties if caught.

Namibia

Namibia, like Morocco, has taken a hard-line approach to crypto assets. The country has unequivocally declared blockchain-based digital assets as completely illegal.

Nigeria

There are no specific regulations that ban people living inside the borders of Nigeria from owning cryptocurrency, as the country is still working on an official response. At the same time, the country’s banks are not permitted to handle any virtual currency of any kind.

South Africa

The South Africa Reserve bank made a decision in 2017 to partner with blockchain service provider Bankymoon to experiment with whether regulating cryptocurrency is feasible within the country. This sandbox approach means there will be no official regulations passed until research has concluded.

Zimbabwe

Zimbabwe’s central bank has declared that cryptocurrencies aren’t considered legal within the country. At the same time, there have been no rules set in stone for regulating or banning digital currencies at this time, leaving things up in the air until the government makes a more definitive ruling.

This article was written by Catherine Tims, a freelance writer

SEC Causing Some Worries for Crypto Speculators, Ripple Bull Run Continues

Worries Grow Regarding Ethereum’s Status as a Cryptocurrency

Chatter is increasing in the digital asset community about concerns the Security Exchange Commission may be taking a hard-line approach regarding its definition of tokens, which would have to be regulated like securities. Ethereum is at the center of this discussion, because its cryptocurrency which is known as Ether may be viewed as a token by the SEC under its current definitions. Tokens are generally assets which are generated via open source Blockchains. However, this is a subject which is being widely debated – and no firm decision has been handed down.

Ripple Almost Doubles it Mid-April Value

Ripple is trading close to eighty-five U.S cents per its XRT coin this morning. Ripple-like the broad crypto market made substantial gains in April. And its price action is a fair reflection of speculative sentiment. The price of XRT clearly shows volatility remains a prevalent feature within digital assets. As of the 11th of April, Ripple was trading near forty-five cents per coin, and its current price value after coming off highs late last week are nearly double that amount.

Ripple Daily Chart
Ripple Daily Chart

No Clear Timetable in Sight for SEC Decision on Tokens

The great debate regarding what constitutes a pure cryptocurrency and what is a token is sure to increase in fervor. The question for speculators is what will happen to Ethereum short term if it is hit with a token status. Ethereum is the second most widely traded digital asset. Speculators will certainly want to keep their eyes on the SEC which is being waited on for a decision with no clear timetable in place.

Singapore Digital Assets Event Last Through Tomorrow

The World Digital Assets Summit in Singapore continues today and will last through tomorrow.

  • May 2nd – 3rd, Singapore, World Digital Assets Summit

Yaron Mazor is a senior analyst at SuperTraderTV.

SuperTraderTV Academy is a leader in investing and stock trading education. Sign up for a class today to learn proven strategies on how to trade smarter.

Digital Assets Starts A New Month in Red, Bitcoin’s Next Move is the Question

Use of Cryptocurrencies by Organized Crime Doubted in Hong Kong

A report from Hong Kong’s Financial Services and Treasury agency has raised doubts about the use of cryptocurrency’s used by organized crime. Digital assets have been accused of being a major vehicle for criminals to hide their illicit money worldwide. However, the Hong Kong report states via an investigation of financial transactions from the past six years, that cryptocurrencies have had little to do with criminal activity – except for the use of ransomware.

Bitcoin Relative Stable but its Next Move is the Question

Bitcoin has retreated early this week and is trading near 9000.00 U.S Dollars per coin. The digital asset remains relatively stable and its lack of volatility will certainly attract interested speculators. Having seemingly fought off the three-month bear trend, Bitcoin turned in a solid month of gains for April. A high of 9700.00 Dollars was achieved early last week. And the question is if Bitcoin will resume its run upwards, or if it will run out of buyers and succumb to downward pressure? Resistance to Bitcoin appears to be the 9700.00 juncture, while short-term support appears to be around 8400.00 Dollars.

Bitcoin Daily Chart
Bitcoin Daily Chart

Are Cryptocurrencies Used as Safe Havens?

An interesting trading correlation has been raised by cryptocurrency analysts. Digital assets definitely saw a boost in value in April. And some analysts suggest one possible reason was the geopolitical crisis, which ensued when the United States took military action in Syria. It is being claimed cryptocurrencies raised in value because they are perceived as a safe haven. However, this viewpoint remains hard to prove and open for debate.

Dubai Futurama Blockchain Event for 3 Days

Dubai will host the Futurama Blockchain Innovators Summit starting on Thursday of this week and it will be a three-day event.

  • May 3rd – 6th, UAE, Futurama Blockchain Innovators Summit

Yaron Mazor is a senior analyst at SuperTraderTV.

SuperTraderTV Academy is a leader in investing and stock trading education. Sign up for a class today to learn proven strategies on how to trade smarter.