Digital Currency Looks to Solve Cannabis Industry’s Cash Problem

Digital currencies may solve some the legal cannabis industry’s

woes by becoming an alternative to cash payments. Despite recent state-level ballot initiatives across the US that legalizes marijuana in one form or another, the drug still remains illegal at the federal level. While it’s unlikely the feds are going to go after legal cannabis dispensaries any time soon, the legal murkiness does create one serious problem.

Cash-only

Banks won’t deal with cannabis dispensaries. Consider the ramifications. No banking means no payment processing, which means customers can’t use credit or debit cards to make purchases. According to a 2016 survey, 75 percent of customers prefer to pay with credit or debit cards, with only 11 percent preferring to pay with cash. Unfortunately, dispensaries can’t give customers what they want – payment methods other than cash – because banks won’t do business with them. Consequently, the customer is inconvenienced and the merchant loses potential sales.

A lack of banking causes even more serious problems. Since the industry is forced to accept only cash for payments, marijuana dispensaries are an excellent target for robbers and thieves due to the large amount of cash they keep on premises. There’s still a larger problem than that, which is perhaps the biggest of all: dispensaries have great difficulty paying their expenses. Utilities, tax assessors and vendors would much rather not be paid in cash, and some vendors may not even accept cash payments. The cost of protecting large sums of cash is prohibitive. The need for armored cars, safes and guards depletes the bottom line. It’s been estimated that cash handling expenses can amount to 10-15 percent of sales.

Changes are coming

Seeing an opportunity to gain access to a $6.7 bln market, the digital currency Dash partnered with Alt Thirty Six in April 2017. The Dash network, through its decentralized self-funding mechanism, is paying the company $496,000 to integrate Dash as a payment option in the cannabis industry’s point of sale (POS) systems. The vendor also has skin in the game, having spent nearly $700,000 of their own money developing the POS platform. As part of this arrangement, Dash will be the only digital currency offered by the point of sale platform. According to the budget proposal submitted to the

Dash network:

“We have three major verticals identified and solidified reseller partnerships that will adopt the Alt Thirty Six + Dash payment solutions:

• Independent Software Vendors (ISV) – Music & celebrity apparel company (100+ online stores), online marketing automation partner (600+ clients), and more.
• Value Added Reseller (VAR) –IBM, Sirius Computer Solutions, Industry Specific point-of-sale (POS) Partners
• Ecommerce Retailers – Sirius Computer Solutions​”

The vendor has been making monthly progress reports to the Dash community and work continues apace. The platform’s initial release is scheduled for December of this year.

Going mainstream

The road to mainstream adoption of digital currency has to begin somewhere, and perhaps no other industry needs cryptocurrency as much as this one. Many have suggested that digital currencies could gain adoption by saving vendors money on credit card fees, and this is certainly possible. But such fees usually amount to no more than three percent.

With the legal marijuana industry, Dash has the potential to save merchants up to 15 percent, which would be a massive boon to their bottom line. Dash is suitable for point of sale use because of its InstantSend feature. Transactions sent via InstantSend are fully confirmed and irreversible in four seconds. Bitcoin transactions, by comparison, usually aren’t considered fully “settled” until six confirmations are received, which can take an hour or more.

Chuck Reynolds

Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-4614

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

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

A blockchain startup focused on know-your-customer (KYC) solutions

has raised $1.6 million in a new seed funding round. Norbloc's round was led by Marathon Venture Capital, a VC firm based in Greece that launched in March. Other participants in the round include Digital Currency Group, Inbox Capital, Back in Black, as well as the founding team of classifieds website Avito, the startup announced today.

The startup is one of a growing number of companies focusing on KYC, or the process by which financial institutions verify the identity of their clients. It's a use case that has attracted the interest of a number of banks (and investors), and has been the subject of a number of enterprise-level pilots to date.

Astyanax Kanakakis, Norbloc's co-founder and CEO, previously worked for parent company of now-defunct bitcoin mining firm KnCMiner and later served as chairman of XBT Provider, which launched a bitcoin-tied investment product on Nasdaq Nordic in 2015. In statements, he said the startup plans to use the new seed funding to expand its existing team.

"We will be drawing on the expertise and experience of our investors and our advisors as we move forward. We will use the funding to continue to build the business and acquire talent across the four markets that we are now active in," he said.

Chuck Reynolds

Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-4614

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

Why former NFL player Sidney Rice
is participating in a cryptocurrency
token sale today

Sidney Rice has been a busy investor

Chuck Reynolds

Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-4614

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

Big Blue is making what could be considered its first public foray

into cryptocurrency. In the kind of unveiling that can only come before one of the biggest events in global finance, IBM is revealing today at Sibos 2017 the results of a partnership with blockchain startup Stellar in which it successfully settled real transactions using the company's custom cryptocurrency, lumens.

While currently limited to cross-border payments involving British pounds and Fijian dollars, the early-stage platform is nonetheless designed to scale to handle seven fiat currencies in the South Pacific – including the Australian dollar, the New Zealand dollar and the Tonga pa'anga.

Perhaps the platform's most distinguishing characteristic, however, is that the project showcases how private and public blockchain technologies are increasingly being used in tandem. While IBM's blockchain solutions are designed to complete much of the workflow around transaction clearing, the actual settlement will be conducted using Stellar's blockchain. In this case, Stellar's lumen serves to digitally connect fiat currencies, allowing for nearly instant exchange without the consumer or buyer ever touching the cryptocurrency itself.

Stellar founder Jed McCaleb told CoinDesk:

"When trading between multiple currencies, it helps to have a bridge currency to reduce the ledgers needed to maintain. Lumen provides that single ledger that can bridge currencies."

New orbit

Taken together, however, this partnership goes beyond just technical implications. Not only is the partnership an outside-the-box move for IBM, which has largely focused on its own blockchain platforms, it's a big win for Stellar, which having emerged from the Ripple founding team hasn't had quite the same growth, perhaps attributing in part to its focus on developing markets. The partnership is also evidence of the extent of collaboration between blockchain firms and the wider financial world. To make the project work, IBM had help from partners including National Australia Bank, TD Bank and Wizdraw (HK) of WorldCom Finance.

The payments themselves are conducted for the Advancement of Pacific Financial Infrastructure for Inclusion (APFII), an organization of member financial institutions founded by the United Nations and Swift, and operated by KlickEx, a privately-held direct clearing provider that specializes in cross-border digital remittances. According to IBM's vice president of global blockchain development, Jesse Lund, getting all these players to work together is just an extension of IBM's mission to collaborate with financial institutions to develop a blockchain ecosystem.

To that end, the platform is already integrated with IBM's Financial Transaction Manager, which itself is integrated with ACH, SEPA and other electronic transaction networks. Going forward, APFII's confirmation receipts are expected to be published as MT103 Swift messages directly to the blockchain. "This in many ways is just an extension of that, wherein we're providing, in collaboration with banks, and in the process developing this blockchain ecosystem," said Lund.

More support

For now, the new project is also a balancing act – at once both a small advancement of early-stage technology and an aspirational advance toward more lofty goals. While the trial with APFII has been ongoing since last week, the CEO of ClickEx, Robert Bell, said it's too early to provide any numbers about transaction volume. But still, he expects as much as 60 percent of the cross-border retail market in the region to be transacting on the platform once all seven currencies are added (the Australian dollar will be the next currency integrated).

"For the first time, blockchain is being used in production to facilitate cross-border payments in multiple integrated currency corridors," Bell said. IBM also sees the demo as one with implications for the digitization of central bank money – a concept that's gotten a significant amount of attention recently as central banks around the world grow more interested in figuring out how the technology could create efficiencies. "Our long game is to support multiple different types of digital assets,"

said Lund, adding:

"And I'm very confident that you will be seeing central banks coming forward with their own digital asset issuances that will be a much more formidable construct of this model."

Today, that future will be discussed in greater detail on stage at Sibos in Toronto, where a panel with representatives from IBM, TD Bank and CLS will discuss the project with the CEOs of both Stellar and KlickEx. "It's going to be a wild ride,"

Lund said, concluding:

"We've got the bankers and the renegades altogether."

Chuck Reynolds

Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-4614

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

Once considered perhaps the largest middleman at risk

of being disrupted by blockchain, Swift took a notable step today toward becoming a disruptor. Revealed on the eve of its largest annual event, Sibos, the inter-bank platform, along with six banks including BNP Paribas, BNY Mellon and Wells Fargo, has deemed its flagship blockchain trial a success from both a technical and business perspective. First announced in January, the proof-of-concept tested whether moving funds stored in nostro-vostro accounts for international transactions to a blockchain could free up those funds to further investment.

But in spite of the PoC achieving multiple objectives, Swift says there's still a long way to go before implementation, primarily since its 11,000 members will not benefit equally from the project In conversation, Swift's head of R&D Damien Vanderveken explained that some banks that have invested heavily in traditional, centralized solutions for nostro-vostro accounts are already experiencing efficiency gains, and as such might not be as keen to invest in a blockchain-based solution.

Vanderveken said:

"The PoC demonstrated that it can fulfill the requirements. The business value depends on the level of automation of the participants. We will need to make sure for the final solution that we take care of the different levels of investment."

As a result, instead of a one-size-fits-all solution, Vanderveken said each Swift member will eventually have to analyze the value offered by blockchain and weigh it against the costs of implementation.

Benefits of blockchain 

Built as part of Swift's Global Payments Innovation initiative (GPI) within its newly revealed DLT sandbox, the PoC uses the open-source Hyperledger Fabric platform to test two main applications. The first used real, anonymized production data from each of the banks to provide "the account owner and the account servicer a complete view of all the nostro-vostro accounts that they own or serve," Vanderveken said.

The second simulated back-office procedures, which gave the participants a node hosted in the cloud to test the benefits of moving funds from multiple accounts to a single distributed ledger. These two applications provided users not only increased visibility of and access to available funds, but also simplified the reconciliation process, which uses Swift's ISO 20022 standard. "The feedback from everybody is unanimous," said Vanderveken. "What we have built in terms of applications actually does meet the requirements."

Technical limitations

While the nostro-vostro blockchain PoC was deemed a success, Swift also noted several limitations. In particular, Vanderveken said Swift is concerned about the possibility that cryptographic security could be hacked with quantum computers. A technology still in the proverbial petri dish, the thought has pushed Swift to create a "hybrid architecture," where some transaction components were distributed on a blockchain, while others were "operated by a neutral third-party."

At the top of the list for the latter was the identification of participants, or as Swift described it earlier this month in a paper jointly written by BCG Financial, "a universally trusted global KYC registry." For businesses like Swift, which operate in permissioned systems, this is considered a crucial security feature.

Vanderveken said:

"If you want to ensure data confidentiality, and you don't want to rely solely on encryption — which is prone to failure in the long run as encryption becomes hacked by technology progress — you need to have solutions where data is then segregated."

Swell for Sibos?

This successful test of Swift's blockchain PoC is particularly notable leading up to the Sibos conference in Toronto, since the financial incumbent has stiff competition with distributed ledger startup Ripple hosting a competing event called Swell. Twice during Sibos, Swift will demo the PoC in front of a live audience. But while participants (of both events) perform their own cost-benefit analysis of blockchain, the second phase of Swift's POC will already be underway.

Since Sept. 27 financial institutions — including ABN Amro, Deutsche Bank and JPMorgan Chase — have been validating the PoC results, with a final decision expected by the end of year. But one thing is certain, Vanderveken said Swift only intends to move forward in implementing the new technology if its members benefit.

He said:

"We need to take care of the differences of the various banks to make sure such a solution is successful."

Chuck Reynolds

Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-4614

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

Looking ahead to next week's annual Sibos conference,

Palatnick takes stock of blockchain technology's progress in transforming the plumbing of global markets, and explains why cooperation is critical for further advancement. While 2016 was referred to as the year of the blockchain proof-of-concept, 2017 has become the year of the blockchain pilot. While the progress has been remarkable, it's important to be mindful of the critical role that industry collaboration has played in accelerating development and advancement.

Shortly after the blockchain conversation started across the financial services industry in 2014, a number of participants began to realize the value that distributed ledger technology could bring to the financial markets. For DTCC, distributed ledger technology represents a generational opportunity to reimagine the post-trade infrastructure through its potential to harmonize and streamline the costly, burdensome reconciliation process the market currently operates in. By providing a single version of the truth to all parties, DLT can fundamentally alter how financial transactions are entered, stored and shared.

Just three years later, the industry has made significant strides in turning blockchain from a concept to reality. We've seen initiatives move from PoC to pilot, and a number of efforts are underway to operationalize the tech. Although still in the early stages of implementation, the industry has learned that collaboration is critical. The key to reaching the full potential of blockchain technology lies in fostering industry-wide collaboration and aligning the technology with the industry's longstanding core principles of mitigating risk, enhancing operational efficiencies and driving cost efficiencies.

From realization to reality

After all, the underlying technology itself calls for collaboration. Interoperability and standardization in utilizing blockchain can only be achieved when the industry joins in support of a common goal and a single ledger. DTCC believes the core of any distributed ledger solution for the global financial industry must be based on open source, not owned by any single vendor and aligned around best practices and established standards. Until recently, there were no viable open-source models for distributed ledger technology. However, that is quickly changing due to the development we’ve seen this year from organizations like Hyperledger and the Enterprise Ethereum Alliance.

Hyperledger, the first enterprise-oriented open-source collaboration project created to advance cross-industry blockchain technologies, recently gained support from 10 new members, including the Gibraltar Stock Exchange and DLT Labs, bringing its total membership to 18,765 members. The recent release of Hyperledger Fabric 1.0 is an example of what the industry can achieve through community effort, where 159 developers from 28 organizations joined together to incubate the project. The release marked a significant milestone in the evolution of distributed ledger technology, proving the critical need for collaboration.

Having been established just earlier this year, the Enterprise Ethereum Alliance has quickly gained 120 members to its consortium, which has the mission of evolving ethereum into an enterprise-grade technology. The rapid growth in membership and support from major players such as State Street, JPMorgan Chase and BNY Mellon, as well as DTCC, shows the evolving acceptance and deployment of open-source distributed ledger technology in the global marketplace.

DTCC believes this is one of the many ways in which the industry has and will continue to benefit from collective contributions, and is why we're leveraging the Hyperledger network to provide a DLT framework to drive further improvements in derivatives post-trade lifecycle events. Through our work with IBM, Axoni and R3, we're rebuilding our trade information warehouse, which provides processing services for about 98 percent of all credit derivative transactions globally. The initiative is underway and, in 2018, nearly the entire global $11 trillion market for credit default swaps will run on a distributed ledger.

Are you in?

As the adoption of distributed ledger technology grows, as in any open market, many different innovations will be proposed and pursued. The challenge for the financial industry, and for an emergent technology like distributed ledger, is about creating networks that share information and technology, and the need for continued collaboration.

Without collaboration, DLT solutions will leverage proprietary, separate models that will ultimately recreate the many silos and disjointed systems that already exist today. In the financial industry, this could lead to bifurcated markets, reduced liquidity, greater risks and a suboptimal experience for the investing public. It is essential that we work together across industry organizations, technology providers, market participants and market structure providers to develop best practices and interoperability standards for this technology in order for DLT to truly live up to its potential.

Chuck Reynolds

Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-4614

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

Surreptitious cryptocurrency miners hide on Politifact and hundreds of other sites

Politifact is the latest and perhaps most high-profile website

to have hosted code that secretly hijacks visitors’ CPUs to mine cryptocurrency. Driven by a boom in cryptocoin value and a lack of protections against JavaScript routines like this one, this surprising form of audience monetization is now found on hundreds of sites.

(Update: Politifact has removed the code and is looking into how it got there.)

It’s not quite an ad, and it’s not quite malware, nor is it strictly speaking a virus or exploit. JavaScript is used for all kinds of things in the background of practically every major website, from tracking users to displaying custom fonts. Generally speaking, these apps are running code hosted on another server that the end user can’t inspect, and often doesn’t even realize their browser is executing.

In recent months, several JavaScript-based cryptocurrency miners have appeared. The idea, supposedly, is that instead of showing your visitors ads, you have their CPU run the calculations necessary to mine a currency like Bitcoin. As the administrator, you could control the CPU load and reap any resulting coins. CoinHive is a new business that offers this as a service. Predictably, this already questionable approach to monetization has already been repurposed by malicious actors. Injecting a bit of JavaScript into the front page of a website is often simpler to do than penetrate its databases or phish its admins; and once it’s in, it runs itself — all you have to do is give it a wallet to put the coins in.

That seems to be what happened at Politifact; my blocker registers a CoinHive instance on the main pages of the site, with new requests coming in multiple times a second. Inspecting the site’s JavaScript shows an enormous chunk of CoinHive miner code sitting amongst the ordinary scripts. It’s pretty hard to miss, and if not blocked it takes over the whole CPU until the tab is closed. With a few million users mining for a minute or two each while they check out the latest political shenanigans, those cycles add up quick.

I’ve contacted the site’s team to ask what the story is; someone there told The Register that they’re looking into it, but I’ll update if I hear back with more details. The site is far from alone: a study by ad blocker company AdGuard showed that hundreds of sites, most of them on the shady site (porn and torrent sites, for instance) are running CoinHive code, or some other JavaScript-based miner.

What can you do? Well, this is a great reason to install an ad blocker, if you haven’t already: in addition to getting rid of intrusive ads and trackers, some of them block unknown scripts or have a blacklist of known malicious ones. I use uBlock Origin, which also makes it easy to whitelist sites (like this one) that only feature organic, free-range advertisements. But you could also use NoScript, AdBlock or any one of the many out there, depending on your platform and browser.

Chuck Reynolds

Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-4614

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

China may not recognize bitcoin as a legal currency,

but it seems to have a clear vision for a state-issued alternative. At a meeting hosted by the International Telecommunication Union this week, Yao Qian, the Director of the Digital Currency Research Institute under the People's Bank of China, reportedly boasted about the potential of a state-owned digital currency, while suggesting that there is an inherent lack of value anchoring public cryptocurrencies like bitcoin.

According to a report by Yicai, Yao also framed a state-issued digital currency as a way to stabilize domestic fiat currency, while better securing country's financial status. Although the publication made clear Yao's comments reflected his own opinions, the remarks nonetheless reveal how the country may choose to direct the future development of digital currency.

Yao told attendees:

"The value of cryptocurrencies such as bitcoin primarily comes from the market speculation. It will be a disaster to recoganize it as a real currency. And the lack of a value anchroing inherently determines that bitcoin can never be a real one."

Launched by China's central bank in June this year, the Digital Currency Research Institute focuses on R&D related to blockchain-based digital currency. Currently head of the institute, Yao also served as the deputy director of PBoC's technology department.

Pointed barbs

Elsewhere, Qian had more criticism for public cryptocurrencies. In yet another statement, he was quoted as saying that the deflationary nature of economic systems utilizing the technology could be a hinderance to their success. "A total cap of 21 million like bitcoin whose current supply also halves every four years is actually driving backward along the currency evolution," he said. Yao went on to argue that a state-owned digital currency, however, creates tangible economic values and helps stabilize the market position of fiat currencies.

"The nature of a state-owned digital currency is a government liability issued to the public," he said. "And it's backed by the sovereign credibility." Yet, Yao takes a different approach from current trials of other central banks' cryptocurrency projects that focus on the distributed ledger technology. Citing the RSCoin design concept by the Bank of England as a promising example, Yao argued that such state-owned digital currency should not be confined by the ideology of the blockchain and DLT. "RSCoin pictures a system that is controlled by the central bank," he said. "The role of central banks may not just be deciding how much to supply but also designing the rule of the supplying algorithm."

Chuck Reynolds

Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-4614

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

Chuck Reynolds

Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-4614

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