August 2018 – Page 3 – Better Home Based Business

A $153 million ICO in action

A $153 million ICO in action

One of the largest-ever ICOs was a project known as Bancor

which raised $153 million in around three hours. The digital coin issued is called the Bancor network token (BNT) and it was built on the Ethereum platform. A key aspect of Ethereum is the so-called smart contract functionality. Smart contracts are contracts that automatically execute when certain conditions are met from all interested parties. The automation can help to speed the process up, ensuring no mistakes along the way.

Bancor is creating a product that rivals cryptocurrency exchanges based on smart contracts. An exchange matches buyers and sellers and essentially acts as a middleman. But, Bancor’s network allows users to convert one cryptocurrency into another with low conversion costs and without fears of low liquidity. It automatically balances supply and demand and works out the correct conversion price of one coin into another.

It does this through what it calls “smart tokens” which can be generated through the Bancor network. These smart tokens or digital coins hold one or more other cryptocurrencies in reserve which means that it can always be traded. For example, if there was a digital coin that only had a few thousand users, it would be difficult to trade as there would not be a large pool of people wanting to buy and sell it. But if that digital token had a popular and large reserve cryptocurrency like ether then there would always be liquidity to trade. But ICOs are not flawless. As a result of the large demand for BNT, the Ethereum network became congested during the coin offering last year, leading to delays for buyers. CNBC spoke to Galia Benartzi, the co-founder of Bancor, and asked her about the ICO process and the company’s ambitions .

Why was an ICO the right route to go down?

At Bancor we believe the term ICO is actually a misnomer because it implies a similarity to an IPO. ICOs, or as we prefer to call them "Token Generation Events" (TGEs), are fundamentally different than IPOs in that an IPO is conducted by a mature company with a live product and revenue, while a TGE represents the birth of a new currency which powers a network.

We decided to launch a TGE because we had a design for a promising token — BNT, which could connect many tokens into a network — the Bancor Network — and make them instantly interchangeable, without needing to match buyers and sellers, without relying on volume or market makers, and without fees or barriers to listing. During the TGE, more than 10,000 users contributed to the project by purchasing BNT. These 10,000 BNT holders instantly seeded the network in a way that no traditional launch would have been able to do. This momentum is essential for a network's growth and a TGE allowed us to create alignment with early adopters in a way that increases the network's chance of success.

What have you learned along the process?

The industry has matured a great deal since Bancor held its TGE in June, 2017 and yet still has a tremendous way to go. We are learning more every day than ever seemed possible, as seemingly disparate fields from economics, history, psychology, system design, network effects, finance, law, ethics, sustainability and others converge in the blockchain space. Some of the main learnings are actually in areas that the Bancor Protocol aims to shed light on. For example, in today's ecosystem, one of the main jobs of a token issuer is to plan for its liquidity, via costly exchange listings and market makers. We hope that in the future, token creator's will be able to focus on their networks, products and users, when liquidity is fair and free for all.

Where are you in the development of the network?

We are aiming to make cryptocurrencies accessible to a wide array of users, including those who are brand new to crypto. To this end, we launched the Bancor Wallet which allows users to log in from any mobile device or social messaging account (Telegram, WeChat, Messenger or SMS) and instantly buy and sell more than 100 tokens, without having to be matched in an exchange to a buyer or seller.

What will your tokens be used for?

All tokens on the Bancor Network hold an amount of BNT (Bancor’s Network Token) in their smart contracts. This links together each token in the Bancor Network, allowing tokens to be instantly interchangeable for one another at continuously calculated rates. As users buy BNT (or any token in the Bancor Network), it increases the liquidity of each token in relation to the others, creating more predictable and efficient token conversions for all users of the network. BNT is the hub network token for a decentralized global liquidity network that allows anyone to launch a viable currency with continuous liquidity based on its actual usage.

Article Produced By
CNBC

https://www.cnbc.com/2018/07/13/initial-coin-offering-ico-what-are-they-how-do-they-work.html

David https://markethive.com/david-ogden

ICOs Legality, scams and dangers

ICOs Legality, scams and dangers

With any new technology, particularly where large amounts of money is involved,

there will be scrutiny from regulators and scams. ICOs have seen both. But the new nature of these digital token issuances has meant that the regulatory landscape globally is fragmented with each country looking at ICOs in different ways.

Are ICOs legal?

The short answer: it depends where you are. It’ll be hard to go through every single country in the world, but let’s look at the major markets. China, which was once a prolific market for cryptocurrencies, has come down hard on the industry. Last year, the People's Bank of China declared ICOs as illegal, warning people of the risks involved in investing in them. Shortly after, South Korea followed, banning raising money through virtual currencies. In the United States, there are no specific regulations for ICOs, but depending on how the digital coin is classed, it may fall under the jurisdiction of the Securities and Exchange Commission (SEC). The regulator is in charge of overseeing trading in various financial products. If the SEC deems that a coin is a “security,” then the company behind it may have to register with the regulator.

The SEC has been very vocal however on warning people about the dangers of investing in ICOs. “As with any other type of potential investment, if a promoter guarantees returns, if an opportunity sounds too good to be true, or if you are pressured to act quickly, please exercise extreme caution and be aware of the risk that your investment may be lost,” the SEC says on its website. The watchdog also issued a warning last year to celebrities who endorse ICOs saying that they may need to disclose information about the relationship with the company if the digital coin is deemed to be a security.

Elsewhere, in Europe, the European Securities and Markets Authority (ESMA) released guidance on ICOs last year. The regulator said that ICOs that qualify as financial instruments could fall under the relevant laws to do with anti-money laundering or investment legislati Some countries are attempting to actually create new rules in order to bring ICOs into the regulatory fold. For example, the government in Malta recently approved three new bills related to cryptocurrencies and blockchain technology. One of those new laws aims to bring a regulatory regime to ICOs.

Similarly, in Abu Dhabi, the capital of the United Arab Emirates, the regulator has published guidelines on launching ICOs. Under the guidelines, companies wishing to execute an ICO must approach the Financial Services Regulatory Authority to see whether it will fall under the body's regulation. Companies will also have to publish a prospectus, just like a firm would for an initial public offering (IPO) on the stock market. Any market intermediaries, or secondary market operators dealing with ICOs must be approved by the FSRA.

“If you put a regulator’s lens on, regulators are saying ‘oh my gosh there is a concentration of crypto capital that is in these ICOs, these people aren’t in the financial system, what is happening to the money’,” Lawrence Wintermeyer, a principal at advisory business Capstone, told CNBC. “There is a huge concern retail people might be exposed to this.” Many countries are looking into how to regulate ICOs but there’s clearly a disparity around the world. The lack of regulation however is a factor behind major scams — one of the biggest issues right now with ICOs.

Scams and dangers

Investing in ICOs is risky business for a number of reasons. Often people are putting money into products that don’t exist yet. While this may not sound too dissimilar to say very early stage investing in other start-ups, the people placing bets on ICOs are usually unsophisticated investors. These projects have high failure rates too. Already, hundreds of coins are dead, meaning the projects behind them were scams, a joke or didn’t materialize. Dead Coins is a website that lists all the cryptocurrencies that fall into those categories. So far, it has identified just over 800 digital tokens that it considers dead. These coins are worthless and trade at less than 1 cent.

And because of the lack of regulation, scams are rife in the industry. One example uncovered by CNBC earlier this year was a project called Giza which claimed to be developing a super-secure device that would allow people to store cryptocurrencies. Scammers in this case managed to raise more than $2 million in an ICO, and eventually run off with the funds without delivering any product. A bad actor or actors used a fake LinkedIn profile and copied pictures from another user's Instagram to create a false persona — and successfully drew more than 1,000 investors into the ICO project.“Are there fraudulent projects? Yes. Are there ill conceived sales that have not thought through potential regulatory issues? Yes. Are there poor projects that will ultimately fail? Naturally.”

Investors are still trying to get their money back but because of the lack of regulation, there is very little consumer protection in the space. Another high-profile scam involved a company called Centra Tech Inc. It was an ICO backed by champion boxer Floyd Mayweather. The U.S. Securities and Exchange Commission (SEC) charged the founders with carrying out a fraudulent ICO. Even successful ICOs have their problems. Bancor, whose coin offering we detailed above, suffered a security breach that saw $13.5 million worth of digital tokens stolen. Many experts in the field however have predicted that ICOs are here to stay and that they will become professional.

“Are there fraudulent projects? Yes. Are there ill-conceived sales that have not thought through potential regulatory issues? Yes. Are there poor projects that will ultimately fail? Naturally. However, amongst these there are many, many deeply innovative projects amongst which a handful will be gamechangers,” Richard Muirhead, founding partner at Fabric Ventures, an investment fund focused on blockchain projects, told CNBC. “If 2017 was the year of ICO hype, then 2018-2020 will be the years of decentralized networks development which will be focused on shipping working code and building communities.”

Article Produced By
CNBS

https://www.cnbc.com/2018/07/13/initial-coin-offering-ico-what-are-they-how-do-they-work.html

David https://markethive.com/david-ogden

NYSE parent launches digital currency exchange

Bitcoin is coming to the Big Board — sort of.

The parent company of the New York Stock Exchange is pushing for digital currencies to reach the investing mainstream through a new marketplace backed by some of Wall Street’s biggest investors.

The InterContinental Exchange said Friday it had formed Bakkt, a new exchange-like company for investors to trade bitcoin and other digital assets.

The company, led by Kelly Loeffler, the wife of ICE Chief Executive Jeff Sprecher, plans to start trading bitcoin futures in November via its app, it said.

Bakkt has partnered with Starbucks, which hopes the seamless bitcoin app will easily convert the digital asset to dollars — that can be used to buy its products.

Like leaders of other cryptocurrency firms, Loeffler has a lofty goal for Bakkt — nothing less than replacing credit cards with her bitcoin app.

Bakkt’s investors are “expected” to include Microsoft’s venture capital arm, Fortress Investment Group, and Michael Novogratz’s Galaxy Digital.

Author Kevin Dugan

David https://markethive.com/david-ogden

Telegram Tech Promised In ICO Vulnerable to Attack, Researchers Say

Telegram Tech Promised In ICO Vulnerable to Attack, Researchers Say

With $1.7 billion in the bank following its initial coin offering (ICO),

Telegram has released its first crypto-friendly feature – but security researchers are skeptical. As detailed in a blog post published today, Virgil Security, a U.S.-based startup, has identified several weaknesses in the new identity verification app, called Passport. While the company praised Telegram for publishing the application's API as open source, allowing the code to be checked by other experts, Virgil Security detailed two problems with the app: how it encrypts data and how it protects stored data. "Their commitment to openness gives security practitioners the opportunity to review their implementation and, ideally, help improve it," Virgil Security's Alexey Ermishkin wrote on the company's blog,

adding:

"Unfortunately Passport's security disappoints in several key ways."

Telegram has never publicly announced or verified the existence of its billion-dollar ICO. But as documents started to leak earlier this year, it became clear that the company, more widely known for its chat app, aimed to compete with many of the services – from filesharing to encrypted browsing – that crypto startups had already proposed.

Plus, it wanted to bring blockchain-based payments to the Telegram chat app, which in recent years has become popular among the crypto community. Payments and identity verification go hand-in-hand, making Passport a natural early offering from the company. Plus, disrupting the digital ID incumbents like Equifax, which keep data in centralized databases vulnerable to breach and abuse, has long been a shared goal of the cryptocurrency community, so it's is a fitting place for Telegram to start.

In its blog post about the new product, Telegram promises that "your identity documents and personal data will be stored in the Telegram cloud using end-to-end encryption. It is encrypted with a password that only you know, so Telegram has no access to the data you store in your Telegram passport." It goes on to promise that, eventually, this data will be stored in a decentralized fashion, Identity was one of the components of the ambitious blockchain-based system that Telegram promised in its ICO technical whitepaper. But from the looks of Virgil Security's findings, Telegram needs to go back to the drawing board.

Brute force

Virgil Security's chief critique of Passport's security is the way it encrypts its passwords. In announcing Passport, Telegram released a considerable amount of information about how the system works. In particular, Virgil Security focuses on the fact that Telegram uses SHA-512 to hash passwords. "It's 2018 and one top-level GPU can brute-force check about 1.5 billion SHA-512 hashes per second," they write.

It goes on to estimate that with enough computers, these passwords could be busted for anywhere from $135 to $5 each, depending on the strength of the passwords users chose. However, before an attacker could begin its attack, it would need to first breach Telegram itself, as Virgil acknowledges.

"To access the password hashes, the attack would have to be internal to Telegram. The ways that could happen are numerous — insider threat, spearphish, one rogue USB stick, etc," Virgil Security co-founder Dmitry Dain told CoinDesk. And if lots of users begin using and in turn loading this data into Telegram's Passport, it will make the company a very attractive target. Telegram has long been criticized for taking its own approach to cryptography, rather than relying on established standards. That said, Telegram's model has not been known to have been broken so far.

Unsigned data

The other danger to users Virgil Security critiques is a bit more nuanced: the fact that the data uploaded to Passport isn't signed. By cryptographically signing data (an integral part of blockchain architecture broadly), users can quickly verify the data was loaded there by the person who claimed to have loaded it and it hasn't been changed. Without a cryptographic signature, an attacker could change some part of the data and no one would know.

The Virgil Security post argues:

"Now, when people see 'end-to-end encrypted,' they believe that their data will safely be sent to a third party without worries of it being decrypted or tampered with. Unfortunately, Passport users will have a false sense of confidence."

Yet, with Virgil Security's critiques and the newness of the product, it should be relatively simple for Telegram to harden its security (Virgil Security is one provider of end-to-end encryption). Telegram did not immediately reply to a request for comment.

Article Produced By
Brady Dale

Brady Dale is a reporter who has previously written for Fortune, Technical.ly Brooklyn, Next City and Motherboard, among others. He grew up in Kansas and lives in Brooklyn.

https://www.coindesk.com/telegrams-post-ico-id-app-vulnerable-to-attack-researchers-say/

David https://markethive.com/david-ogden