US Treasury Secretary Addresses Anonymity, Sanctions And Digital Currencies

US Treasury Secretary Addresses Anonymity, Sanctions And Digital Currencies

The US Secretary of the Treasury, Steven Mnuchin,

made a number of statements regarding the international use of digital currencies at a meeting of the Economic Club of Washington on Friday. The Secretary expressed his concern that Bitcoin wallets could potentially become the modern equivalent of the anonymous Swiss bank account. He intends to work with the G20 nations to offer US tracking abilities in order to prevent such misuse from occurring.

He said:

“If you have a wallet to own Bitcoins, that company has the same obligation as a bank to know [you]. We can track those activities. The rest of the world doesn’t have that, so one of the things we will be working very closely with the G-20 is making sure that this doesn’t become the Swiss bank account.”

Mnuchin doesn’t seem to understand that not all wallets are hosted by “companies.”

Industry opinion

Cryptocurrency industry experts, however, aren’t so thrilled about the idea of more regulations. For example, Sergei Sevriugin, CEO and Founder of risk-sharing platform REGA,

told Cointelegraph:

“I think the regulation already exists for cryptocurrency but, regulation by the community not central authorities, which is the best type of regulation that can ever exist. Centralized regulation will kill the idea of crypto currencies; and, without any control from the community, this type of regulation will lead to several problems, including corruption. We can all remember the last crisis, including the mortgage system collapse in 2008, was under full control and regulation. To put cryptocurrency under full control, the authorities must first put the Internet under control.”

Skirting sanctions

Mnuchin also addressed the potential that countries may use digital currencies to skirt existing financial sanctions. He expressed a belief that there’s little risk of such activities, saying that he is ‘not at all’ worried that countries such as Russia and Venezuela would be able to function in that way.

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Blockchain in Logistics Industry Will Improve Transparency, Enhance Process Accountability

Blockchain in Logistics Industry Will Improve Transparency, Enhance Process Accountability

Communication flow and logistics is an essential aspect of human existence

which forms the backbone of the transfer of goods, services and value. As international trade and logistics continues to expand, more efficient methods are being developed to enable effective service delivery and value transfer. However, Blockchain technology is bringing another dimension to disrupt the logistics industry in areas such as transparency and efficient tracking.

A globally significant industry

John Monarch, CEO at Shipchain, notes that the logistics sector employs the most people in the world. He explains that as this sector expanded over millennia, it has required innovation to scale and sustain practicality for the growing human population. This is happening again at the time of writing, with the fourth industrial revolution.

Monarch tells Cointelegraph:

“Connected devices revolving around the Internet of Everything (IoE) need a higher level of security. Blockchain technology is a matchless solution in this regard because it provides the best protection through distributed ledgers, advanced encryption, smart-contracts and reduced intermediaries. As a result, this will tackle corruption, ransomware, theft, premium-fees and tracking issues.”

He concludes that once Blockchain networks begin taking their first steps on a mass-market level, they will save the international trade industry at least $50 billion per year. And upon maturity, Blockchain technology could save the logistics industry a whopping $500 billion annually.

The actual role of Blockchain

Blockchain professional Aleksandar Matanovic tells Cointelegraph that Blockchain technology will indeed work as a tool to improve processes by bringing inherent properties into the industry.

Matanovic says:

“As in many other industries, I don't see Blockchain as a tool to increase efficiency, there are much more efficient systems than Blockchain-based ones. I see it as a way to make systems more transparent, more robust and less dependent on intermediaries.”

The importance of effective tracking

The COO of BitLand, Christopher Bates, explains that one of the main issues with chain of custody is knowing when property changes ownership or custodianship. Bates uses a car’s history

as an example:  

“It is pretty important to know if a car has been in a major accident and has frame/structural damage, he says. “If there was an immutable accessible record that kept track of the car history, there would be no way a car salesman could sell a car that had been extremely damaged.”

Bates also explains that ownership of land has many problems affecting it around the world.  One of the most consistent problems is when a parcel of land is double or triple sold, meaning a person will sell land to multiple people with only one of the sales (if any) actually being legitimate.  In some places, land titles are kept on paper or are tracked by only a single individual.  In these cases, it’s often impossible to truly know the proper chain of custody, and individuals manipulate ownership records for personal gain.  

Blockchain will enable accountability

Given that shipping anything is a sequence of custody handovers, having an immutable record of chain of custody transaction makes it impossible to lose track of who is responsible for a piece of property during each handover.  Existing courier services often track packages along their route, but such methods are imperfect.

Bates says:

“The issue therein is that since they are mutable, shipment records can be hidden or erased completely to the detriment of the people at large. Governments are able to hide their black budget spending by erasing shipping records or preventing records from being issued at all. On the one hand, governments will argue this is for national security, but on the other hand, the taxpayers that are sponsoring these budgets deserve transparency in spending.”  

Blockchain technology combines chain of custody control with the transparency of immutable record-keeping.  This creates an ecosystem that deters malicious actors, as they will eventually become known due to system transparency.  Bates concludes by noting that anyone who claims to be in the decentralization movement should be extremely happy any time a government decides to implement Blockchain tech of any sort.  It means that government is moving towards transparency whether they know it or not.

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Kraken Down Nearly 48 Hours, Gives Engineers Time to ‘Rest’ Before Resuming Service

Kraken Down Nearly 48 Hours, Gives Engineers Time to ‘Rest' Before Resuming Service

Cryptocurrency exchange Kraken is still down nearly 48 hours

after the site initiated a system upgrade. Kraken engineers had estimated the downtime would only be two hours. Much like Gilligan’s three-hour cruise that went horribly wrong, Kraken users all over the Internet are raging over the downtime and asking difficult questions.

Beset by problems

Nearly all digital currency exchanges have faced significant growing pains in the last year, as the interest in cryptocurrencies has grown exponentially. Coinbase and Bitstamp have been overwhelmed with user traffic, leading to delays. Bitfinex has been hit by DDOS attacks and recently had to stop registration for new users because of overwhelming demand. Binance and Bittrex have also halted new user signups.

Still, Kraken has arguably suffered the most problems of all major exchanges. Users, including myself, have experienced multiple connection errors and extraordinary difficulties placing and cancelling orders. It’s sometimes necessary to refresh Kraken’s page 10-15 times before being able to execute an action. Numerous users have complained that Kraken posted their orders multiple times (after telling them their order failed initially), in some cases costing them thousands of dollars.

Upgrade to fix it all?

While many have encouraged users of Kraken to go elsewhere, it’s not always that easy. US users are particularly limited in the exchanges they can use, particularly with Bitfinex ditching them earlier last year. For certain altcoins, US traders may only be able to use Kraken to trade them against fiat. Likewise, Kraken is one of the only markets where US residents can long or short Bitcoin. Such users were delighted when, on December 15, Kraken announced a major upgrade to fix the site’s

usability problems:

“Kraken.com performance is extremely degraded and unreliable.  Clients can expect severe latency and difficulty interacting with all web and API services.  Requests will frequently timeout and fail.  At the moment, the only solution is to wait and try again later.

Next week we will be rolling out a major systems upgrade which should resolve these scaling and load issues.  The upgrade is long overdue and has been substantially delayed by the diversion of resources toward the protracted fire fighting effort required to deal with the last several months of unrelenting growth.”

Two hours, possibly longer

The upgrade scheduled for the third week of December was rescheduled twice, before finally commencing January 10 at 9 PM PST. The status page Kraken set up for the
upgrade stated:

“We are performing a system upgrade on Thursday, January 11 at approximately 5:00 UTC (Wednesday January 10 at 9 pm PT). Kraken services will be offline for about 2 hours during the upgrade, possibly longer.”

Over the next two days, Kraken has continued to update the status page, complaining of late starts and the upgrade progressing more slowly than expected. Finally, they announced that the upgrade was in its final stages, before then posting that “a number of issues” came up in their “final testing.” Kraken is not clear on why this “final testing” was apparently done on production servers. About one day after the two hour upgrade began,

Kraken posted:

“We are making progress on the few remaining issues but don't have a definite launch time yet. We intend to cancel stale (and possibly all) orders and pause liquidations upon resuming service. More details to follow soon. Thank you for your patience.”

It’s unclear exactly how this will work. The price of Bitcoin and altcoins has of course changed over the last two days, and nobody is quite sure how Kraken will keep people from losing money on long and short positions that might have been closed had the exchange been working properly. Most astonishing of all, about 36 hours after the upgrade began, Kraken apparently sent their engineers home to take a nap!

Kraken writes:

“We are close but rather than launch immediately ahead of the team passing out, we will push off a bit to get some rest and be able to better monitor systems and react to problems following launch. Unfortunately, this means several more hours of delay.”

At press time, Kraken is still down with no ETA for resumption of trading, and the exchange has not responded to our requests for comment.

Chuck Reynolds


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Florida Bill Would Legally Recognize Blockchain Signatures, Smart Contracts

Florida Bill Would Legally Recognize Blockchain Signatures, Smart Contracts

A lawmaker in Florida has introduced a bill

that, if passed, would create a legal foundation for blockchain data and smart contracts in the U.S. state. House Bill 1357 introduces multiple stipulations that blockchain ledgers and smart contracts be treated as legally-binding methods of data storage – provided that such measures do not break any pre-existing laws or regulations.

Notably, the bill states that a "record or contract that is secured through blockchain technology is in an electronic form and is an electronic record," and confirms that a signature recorded through a blockchain also qualifies as a valid electronic signature. As a result of these qualifications, the bill outlines that, if a person uses a blockchain to secure interstate or foreign commercial ventures, it would not impact ownership rights. In other words, if someone used a blockchain ledger to store information, the bill would legally recognize that person's rights to that information.

Similarly, the bill states:

"A contract may not be denied legal effect or enforceability solely because: 1. An electronic record was used in the formation of the contract [and] 2. The contract contains a smart contract term."

If signed into law, the bill would make Florida the latest state to recognize blockchain records and smart contracts. Last year, Arizona passed a similar measure, with identical notes on confirming blockchain records as electronic records, as well as giving smart contracts legal force. A slightly different bill in Vermont, when passed in 2016, allowed for the use of blockchain-based data as evidence in court.

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Atomic Action: Will 2018 Be the Year of the Cross-Blockchain Swap?

Atomic Action:
Will 2018 Be the Year of the Cross-Blockchain Swap?

What if there were no exchanges to hack?

As a new generation of crypto users begin to invest in the technology, developers are growing concerned about its infrastructure. They've seen this happen before – new users enter the space attracted by big gains, then suddenly, a catastrophic failure, usually at the very exchanges designed to hold and custody those funds.

But out of adversity, inspiration is taking hold, with high-profile coders turning their focus to atomic swaps, a concept that claims to allow for the direct, peer-to-peer transfer of cryptocurrencies across different blockchains. In the place of the vulnerable exchanges we use today, the idea behind atomic swaps is that these large repositories of customer money could be rendered obsolete by code. And seasoned blockchain developers like Alex Bosworth believe this is all too necessary, especially given that users today need to effectively give up custody of their assets if they choose to hold funds on exchanges.

He siad:

"Putting users in control of their own private keys has the best aggregate track record for security despite individual cases of loss. Funds under centralized control on exchanges have led to the most massive security failures we've seen."

Andrew Gazdecki, CEO and co-founder of Altcoin.io, which recently launched a beta wallet for atomic swapping between crypto tokens, describes the problem in similar terms, arguing that users should be empowered to hold their own private keys (the alphanumeric strings that allow users to unlock, access and spend their funds) without relying on others.

"There are literally billions of dollars being held within these digital honeypots, and it's nearly impossible to find the perpetrators," he said. Early examples of atomic swaps technology emerged in various stages in 2017, and while there's disagreement as to the timeline they'll be available to the public, some believe 2018 will be their year. As Jameson Lopp, a BitGo software engineer,

recently tweeted:

"Nearly instant atomic swaps … are coming sooner than everyone thinks. Definitely not a year away, but mere months."

Atomic swaps already?

In some ways, atomic swaps are already here – depending on the kind of atomic swap you're looking to make. For instance, last year saw swaps between different blockchains built on similar code – the cryptocurrencies decred, litecoin and bitcoin – executed. Meanwhile, atomic swaps between cryptocurrency tokens on the same blockchain became more commonplace, with decentralized exchanges such as 0x and, as mentioned above, Altcoin.io, adding instant trades between tokens on ethereum compatible protocols.

Cryptocurrencies running on blockchains with much different codebases, though, must rely on purpose-built tools to facilitate these kinds of transfers today. Toward this goal, a tool for exchanging zcash for bitcoin called ZBXCAT was developed last year. Described by co-developer Jay Graber as the "walkie-talkie of payments," the tool will soon be accompanied by a simplified web interface.

Indeed, atomic swaps "could always be done manually," Graber said. However, because this requires a degree of technical skill, before atomic swaps see mainstream use, easier to use platforms will need to be developed. At the same time, Lightning Labs, a company devoted to promoting bitcoin's Lightning Network, recently conducted its first off-chain atomic swap on its test blockchain. Completed in November, the transaction saw litecoin and bitcoin swapped on an off-chain payment channel.

Off-chain hurdles

Off-chain atomic swaps of this type are highly anticipated since trading would be automatic, not reliant on the processing times of different blockchains, but the technology needed to implement off-chain atomic swaps – things like the Lightning Network and Raiden Network on ethereum – are still under development. Which is why some, like Lightning Labs CEO Elizabeth Stark, are less optimistic about cross-blockchain atomic swaps. Stark recently discounted the hype, writing on a development channel, "Anyone telling people that Lightning swaps will be ready in months doesn't know what they're talking about."

And in interview with CoinDesk, Stark said:

"There's still a good amount of infrastructure to build."

One website, swapready.net, provides a breakdown of how close each cryptocurrency is to supporting cross-chain atomic swap capabilities – and to date, there's very few that can interoperate. Mirroring Stark's sentiments, Philippe Castonguay, developer relations manager at 0x, which offers on-chain atomic swaps of tokens on ethereum, told CoinDesk that developers looking to create atomic swaps between vastly different protocols are faced with "a lot of challenges." The infrastructure needed to interface between bitcoin and ethereum, for example, is still in development, and "to make it even worse, these cross-chain platforms also need to solve some of the main problems other blockchains are trying to solve, such as scalability," Castonguay said.

Still optimistic

Yet, even with a lot a work still to do, many remain assured advances are close. Bosworth, whose work has focused mostly on developing applications for bitcoin's Lightning Network, for one, made his excitement about a new era public, tweeting: "The atomic age is coming, what cannot be swapped will be left behind." And Castonguay, whose work focuses on ethereum, also remains encouraged by the development happening within that ecosystem. Even if swaps between blockchains with different code bases prove cumbersome, he believes the blockchain could yield other solutions given the expansive capabilities of its code.

"Eventually the ethereum blockchain will be able to communicate with other blockchains," he said. "Once this happens, all the different coins from different blockchains will be representable on the ethereum blockchain." For example, if bitcoin and ethereum blockchains can communicate with each other in a trustless way, then users could have an ERC-20 bitcoin on the ethereum blockchain, pegged one to one with bitcoin on the bitcoin blockchain, he posited. Such short-term solutions, he thinks, could help advance the atomic swaps concept overhaul.

Castonguay concluded:

"I do believe it is possible that some blockchains might be able to interact with one another this year, but I think 2019 through 2021 would be a safer bet."

Chuck Reynolds


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What you should know about North Korea’s new favorite cryptocurrency

What you should know about North Korea’s new favorite cryptocurrency

  • North Korea appears to have taken a liking to monero, the world's 13th largest cryptocurrency by value
  • Researchers found evidence of hackers creating a malicious piece of software that infected computers to mine monero and send it back to North Korea
  • Monero developers claim it's a super anonymous cryptocurrency that can help avoid capital controls

North Korea appears to have taken a liking to monero,

the world's 13th largest cryptocurrency by value. Earlier this week, cybersecurity researchers at U.S. firm AlienVault found evidence of a malicious piece of software that infected computers to mine monero and send it back to North Korea. Mining is the process of solving complex mathematical equations in order to verify a transaction using cryptocurrency; the miner gets rewarded in that cryptocurrency.

What happened?

AlienVault said it found evidence of malware that took over a person's computer and mined monero. The mined currency was then sent back to Kim Il Sung University in Pyongyang. North Korea has been hit by sanctions from the United Nations and by countries including the U.S. "Cryptocurrencies could provide a financial lifeline to a country hit hard by sanctions," the researchers said in a blog post. "Therefore, it's not surprising that universities in North Korea have shown a clear interest in cryptocurrencies." There have been other incidents of North Korean attackers mining monero. A group called Andariel took over a server at a South Korean company last year and used it to mine the cryptocurrency.

What is monero?

Monero is a cryptocurrency built on a different blockchain to bitcoin. The blockchain is the underlying technology behind cryptocurrencies. These blockchains are public ledgers of activities that show all the transactions on a network. But monero's blockchain is purposely made to be more obscure. It works by obfuscating the so-called wallet addresses that people are sending monero from, making it more anonymous.

Why is it attractive to North Korea?

The increased anonymity that the developers of monero claim exists could be a reason it has been so favored by North Korean actors. Monero's website also claims that it is "safe from capital controls" or measures that restrict the outflow of traditional currencies, much like the North Korean won. Given that sanctions have hit North Korea, monero could be an alternative currency. Also, the time it takes for a monero transaction to take place is 21 minutes. For bitcoin, this rises to more than an hour and a half, and on any given day could be several hours.

How big is monero?

Monero is the 13th largest cryptocurrency in the world with a market capitalization of $5.9 billion, according to Coinmarketcap.com, which tracks prices of cryptocurrencies. It's worth noting that Coinamarketcap removed some South Korean exchanges from the way it calculates prices on its website, citing the large divergence in price in the country. This caused the price of some coins on its site to show price declines earlier this week. One monero token was worth just over $378 at around 4:15 a.m. ET on Wednesday, Coinmarketcap data showed.

Chuck Reynolds


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Telegram plans multi-billion dollar ICO for chat cryptocurrency

Telegram plans multi-billion dollar
ICO for chat cryptocurrency


Encrypted messaging startup Telegram plans to launch

its own blockchain platform and native cryptocurrency, powering payments on its chat app and beyond. According to multiple sources which have spoken to TechCrunch, the “Telegram Open Network” (TON) will be a new, ‘third generation’ blockchain with superior capabilities, after Bitcoin and, later, Ethereum paved the way. The launch will be funded with an enormous Initial Coin Offering, with forthcoming private pre-sales ranging into the hundreds of millions, potentially making it one of the largest ICOs to date. Demand is driven by the fact that rather than the ICO coming from a fresh startup, Telegram is a well-established messaging platform used around the world.

Adopting a homegrown cryptocurrency could give Telegram’s payment system enormous independence from any government or bank — something Co-founder and CEO Pavel Durov is known to covet after investors took over his last company, Russian social network VK. Durov has not responded to TechCrunch’s several attempts to contact him regarding this story. The potential for a cryptocurrency inside a widely adopted messaging app is enormous. With cryptocurrency powered payments inside Telegram, users could bypass remittance fees when sending funds across international borders, move sums of money privately thanks to the app’s encryption, deliver micropayments that would incur too high of credit card fees, and more. Telegram is already the de facto communication channel for the global cryptocurrency community, making a natural home to its own coin and Blockchain.

Selling a TON of cryptocurrency

Telegram is understood to be considering raising as much as $500 million in the pre-ICO sale at a potential total token value in the range of $3 billion to $5 billion. However, those figures could change before the ICO, which could come as soon as March. Those figures would make it possibly the biggest private crypto raise to date after Tezos, which raised over $230 million in July. A pre-sale in an ICO is a minimum cap on investments (sometimes with discounts) to attract big investors (‘whales’) before a wider token sale to retail investors. The public, retail phase of an ICO tends to raise less because there is a long tail of people investing small sums. But front-loading the ICO with institutional investment inspires confidence for retail investors.

Those pre-sale investors may be required to place a minimum buy-in of $20 million if they’re outside of Durov’s inner circle. Sources say that the ICO will require real fiat currency like US dollars for buy-in, not Bitcoin or Ether as others ICOs have to date. Top-tier institutional investment firms have expressed interest, but Durov is said to be wary of accepting their cash. One firm rumored to have pushed for a pre-sale allocation is Mail.Ru Group (formerly DST), founded by Russian emigre Yuri Milner. A spokesperson for DST did not reply to our inquiry about this story. Interestingly, Mail.Ru Group is the fund that ended up buying Durov’s last company VK.

Understanding Telegram Open Network

Durov’s idea is to launch an entirely new blockchain, using the Telegram’s 180 million users as rocket fuel to power forward into mainstream adoption off cryptocurrency and making Telegram, effectively, a kingmaker of other cryptocurrencies, because of its existing scale. According to Telegram’s white paper that TechCrunch has review portions of, its cryptocurrency will be called “Gram” and could potentially gain immediate mainstream adoption by being tied to Telegram’s chat app. Sources say Durov has decided to combine both a centralized and decentralized infrastructure, since a totally decentralized network doesn’t scale as fast as one which has some elements of centralization, hence why Telegram needs to own its own blockchain.

Moving to a decentralized blockchain platform could kill two birds with one stone for Telegram. As well as creating a full-blown cryptocurrency economy inside the app, it would also insulate it against the attacks and accusations of nation-states such as Iran, where it now accounts for 40% of Iran’s internet traffic but was temporarily blocked amongst nationwide protests against the government. Telegram has played a delicate political balancing act to try and retain its users in the country, shutting down some channels for calling for the downfall of the government, while keeping others open.

WeChat But With Crypto

With TON, Telegram aims to develop cryptocurrency-based utility akin to WeChat, which has blossomed into much more than a chat app and acts as default payment mechanism for many in China. While payments can be made very quickly in WeChat for a variety of services, the system remains very centralized. A decentralized platform such as TON could offer more security and resilience. Sources say that Telegram plans to allow users to hold both Telegram’s currency and fiat currency in a forthcoming wallet. There’s also the existing developer ecosystem Telegram has built up around it, where bots and services are offered by third-party developers. Again, here TON could, in theory, underly everything a developer brings to Telegram.

Inside TON

In a 132 page white paper, Telegram has outlined a four-stage plan:

“TON Services” will be a platform for third-party services of any kind that enables smartphone like friendly interfaces for decentralized apps and smart contracts. “TON DNS” is a service for assigning human-readable names to accounts, smart contracts services and network nodes. With TON DNS, accessing decentralized services could be like “viewing a website on the World Wide Web.” “TON Payments” is a platform for micropayments and a micropayment channel network. It aims to be used for “instant off-chain value transfers between users bots and other services”. Safeguards built into the system are designed to ensure that these transfers “are as secure as on-chain transactions”.

The “TON Blockchain” will consist of a master chain and 2-to-the-power-of-92 accompanying blockchains. Its most notable aspect is that it will have an “Infinite Sharding Paradigm” to achieve scalability. Thus, TON blockchains aim to be able to “automatically split and merge to accommodate changes in load”. This would mean new blocks are generated quickly and “the absence of long queues helps keep transaction costs low, even if some of the services using the platform become massively popular”.

It will also consist of “Instant Hypercube Routing” designed so the blockchain can maintain top speed even as it grows. Its proof of stake approach will reach consensus through a variant of the ‘Byzantine Fault Tolerant’ protocol, again increasing speed and efficiency. And it will also use 2-D Distributed Ledgers. This means the TON can grow new valid blocks on top of any blocks that were proven to be incorrect to avoid any unnecessary forks. In other words, TON aims to be ‘self-healing’.

TON’s third generation blockchain will be based on a dynamic ‘proof of stake’ secured by multiple parties with a high degree of fault tolerance. It will also handle storage of ID, payments and smart contracts. So, instead of relying on proof of work to create its currency, Telegram will rely on a new, less energy-hogging way of mining cryptocurrency than the original Bitcoin method. The claim is that it will be capable of a vastly superior number of transactions, around 1 million per second. In other words, similar to the ambitions of the Polkadot project out of Berlin — but with an installed base of 180 million people. This makes it an ‘interchain’ with so-called ‘dynamic sharding’.

 Keeping Control

The white paper also makes clear that four percent of the supply of Grams (200 million Grams) will be reserved for Telegram’s development team with a four-year vesting period. Telegram also plans to retain “at least 52 percent” of the entire supply of the Grams cryptocurrency to protect it from speculative trading and maintain flexibility. The remaining 44 percent will be sold in both the public and private sale.

The currency will be listed on external exchanges

and used inside the Telegram app. Timing-wise, the first quarter of this year will see the launch of the Telegram External Secure ID, followed by an MVP of TON. The launch of the Telegram Wallet is slated for Q4 2018, and the creation of the TON-based economy could launch in Q1 2019. The rest of the TON Services would follow in Q2 2019. Some in the crypto community remain skeptical of TON. “I just think this is the CEO’s way of monetizing Telegram, basically,” says Jackson Palmer, the founder of early cryptocurrency Dogecoin.

The Brothers Durov

Durov and his brother Nikolai Durov, a mathematical genius, were behind the creation of VK, “Russia’s Facebook”, worth an estimated $3 billion, but were effectively forced to sell their stake in the company by oligarch shareholders deeply connected to the Putin-led government. Although Pavel managed to negotiate an exit with a large payoff, he’s known to have harbored a resentment against outside investors ever since. Pavel reportedly left Russia with $300 million and 2,000 Bitcoins and, after buying a citizenship in St. Kitts and Nevis, splits his time between London, Dubai and, where possible, Russia. Telegram’s move into crypto could give him another shot at a massive fortune, while potentially turning the chat app into a vast payment network protected from government interference.

Chuck Reynolds


Marketing Dept
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Exponential Growth: Cryptocurrency Exchanges Are Adding 100,000+ Users Per Day

Exponential Growth:
Cryptocurrency Exchanges Are Adding 100,000+ Users Per Day

Major Bitcoin and cryptocurrency trading platforms

within the global market have been adding more than 100,000 users per day. Many of the leading cryptocurrency exchanges such as Coinbase (GDAX), Binance, Bittrex, Bitstamp and Kraken have struggled in dealing with the abrupt surge in demand for cryptocurrencies. Some exchanges have overhauled their systems to improve their scalability, while others have temporarily stopped opening new user accounts.

Unexpected growth rate

This week, Changpeng Zhao, the founder and CEO of Binance, the global market’s largest cryptocurrency exchange with a staggering $9.5 bln daily trading volume, revealed that it has added more than 250,000 users on a single day.

“Sorry guys, servicing existing members is higher priority at this point. Full team working around the clock. Both tech and support. Just too much demand. Added 250,000 new users in the last 24 hours,” said Zhao, referencing the official statement released by the company. On Jan. 4, Binance stated, “due to the overwhelming surge in popularity, Binance will have to temporarily disable new user registrations to allow for an infrastructure upgrade. We apologize for any inconvenience caused.”

In December, both Kraken and Coinbase allocated a significant portion of their resources and capital in improving customer support and the scalability of their platforms. On Dec. 23, Kraken, which has found difficulty in processing account verifications, disclosed that it has implemented major system upgrades and improvements in performance and will continue to develop its trading platform to support new users. The Kraken development team admitted that its current infrastructure is “degraded and unreliable,” and vowed to improve it throughout January.

The company said:

“We have made significant progress in the last week with the system upgrades and have realized moderate improvement in performance. Unfortunately, we were not able to complete all of the upgrades and the most impactful measures are yet to come. For the time being, systems should still be considered degraded and unreliable.”

Regional exchanges such as South Korea’s Bithumb, the world’s second largest cryptocurrency exchange in terms of daily trading volume, have also stopped accepting new users.

Why are large exchanges struggling?

In late 2017, South Korea’s third-largest cryptocurrency exchange Korbit was acquired at a valuation of $140 mln by a $10 bln gaming giant in Nexon. Given the size and the market valuation of Korbit, major exchanges like Bithumb, Bitstamp, Kraken and Binance could be worth more than $1 bln, as Coinbase was valued at $1.6 bln in its latest funding round.

Even with such large market valuation, high-profit margins, and many resources, cryptocurrency exchanges are struggling to address the exponentially increasing demand from investors because of the strict Know Your Customer (KYC) and Anti-Money Laundering (AML) systems the companies were forced to implement by the authorities. Each user application must be manually approved and verified. The failure to segregate fraudulent accounts from legitimate users could result in large fines and lawsuits for exchanges. Consequently, the vetting process of users is rigorous and requires significant efforts from the employees of exchanges.

Given that exchanges are adding more than 100,000 users per day, it is likely that exchanges are also receiving more than one mln trading account approval requests per month, at least. That is, if the approval process of accounts take around 10 minutes per account, 166,666 hours on a monthly basis that employees have to cover manually. In the next few months, global cryptocurrency exchanges will make drastic changes to their systems. Until then, users, especially newcomers, will find it difficult to open approved trading accounts.

Chuck Reynolds


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Use of Tor in Iran Is at an All-Time High Amid Political Struggles

Use of Tor in Iran Is at an All-Time High Amid Political Struggles

More and more consumers need to start taking their privacy seriously.

Especially when it comes to using the internet, there’s no reason to expose sensitive and personal information to third parties. With the use of VPNs and Tor on the rise, an interesting trend is created. Especially in Iran, reliance on Tor is skyrocketing as we speak. Given the political turmoil in that part of the world, this is no real surprise.

Iran Starts Flocking to Tor for Political Reasons

There are many reasons why people would start using Tor or a VPN connection to mask their online activity. While some people may think this always has to do with illegal activity, that is far from the case. In fact, the number-one reason for using such tools is simply to ensure privacy for all online activities and keep information away from prying eyes such as the government and internet service providers. After all, we should never give up such information either willingly or unwillingly.

At the same time, governments all over the world are cracking down on such tools. Especially in countries with oppressive regimes, there is a growing concern over the use of Tor and VPN connections. After all, such governments don’t want their residents to have any freedom of speech whatsoever, even though it is a basic human right in the eyes of most internet users. Restricting access to specific websites and platform has become the new normal in some places. China is a good example of such political interference.

It seems things are slowly evolving in this direction in Iran as well. More specifically, the public has protested against some decisions made by their country’s government in recent months. When such turmoil comes to light, the first step oppressive governments tend to take is ensuring no one can voice any public concerns over the situation. That often involves restricting access to social media and other platforms on which anyone can share their opinions on these sensitive topics.  

However, restricting access to platforms such as Instagram, Telegram, and a few others is almost never the answer (though one would expect the Iranian government to know better by now). Furthermore, the government started blocking access to Tor in August 2016, even though its efforts seem to have been less successful than originally anticipated. In fact, they have backfired.

Whereas the number of people connecting to Tor was relatively low in December 2016, it increased significantly starting in March 2017. A spike appeared on the charts in December 2017, and the current protests will only make more people flock to tools such as Tor. That is only normal, as people want to access the blocked social networks first and foremost.

Whether or not we will see a further increase in Tor usage across Iran remains to be seen. It is evident the government will not be too pleased with the way things are unfolding right now, especially considering that it tried to block Tor in the past without much success. It seems unlikely that it will crack down on this tool any further, although anything is possible at this point. Even so, there is still the option to connect through a bridge if needed, which would bypass most restrictions.

Chuck Reynolds


Marketing Dept
Contributor

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‘Blockchain’ Mentions in Press Releases Have Soared This Year

‘Blockchain’ Mentions in Press Releases Have Soared This Year

 

 
  • Word appeared in 110 releases in 2018, up from five a year ago
  • It’s part of the frenzy surrounding all things cryptocurrency

If you want to create the next hot stock, just say the magic word: blockchain. In the four days since the start of the year, there have been more than 110 corporate releases that contain the word “blockchain,” data compiled by Bloomberg shows. That’s up from five in the same span last year. The surge in citations comes amid a frenzy surrounding cryptocurrencies following bitcoin’s 1,400 percent gain last year. Companies mentioning the term often see their stock jump, with some even renaming themselves despite having no ties to blockchain in their businesses.

Long Island Iced Tea Corp., for instance, soared as much as 289 percent Dec. 21 after rebranding itself Long Blockchain Corp., while Hooters franchisee Chanticleer Holdings Inc. rose 41 percent Tuesday after announcing plans to start a blockchain-based customer loyalty program. However, there is a question over how much longer this can last, and analysts and investors continue to warn of a bubble in bitcoin. Warren Buffett, GMO’s Jeremy Grantham and even bitcoin-bull Mike Novogratz have urged caution.

Government Think Tank to Trial Blockchain Verification in India

An Indian government policymaking body is eyeing the potential applications of blockchain technology across various sectors.As part of that process, the National Institution for Transforming India, known as NITI Aayog, is developing a proof-of-concept to explore blockchain in key sectors including education, health and agriculture, the Economic Times says. An anonymous senior government official reportedly said that blockchain's promise in secure document verification is the primary reason for potential adoption of the tech.

The move comes after the think tank conducted a hackathon in November 2017 on the use of blockchain technology – an event jointly organised with Harvard-based blockchain startup Proffer. While India's government has been largely skeptical on cryptocurrencies, it has looked on blockchain technology more favorably. In June 2017, several regional governments in India, including Andhra Pradesh, revealed they were looking into applications of blockchain technology in land registries – systems used to keep track of who owns which properties. Further, in September of last year, India's central bank research group announced plans to launch a new blockchain platform to build and support a range of banking-related services.

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