Mark Cuban Backs Former Coinbase Employee’s $20 Million Token Fund

Mark Cuban Backs Former Coinbase Employee's $20 Million Token Fund

A former employee of bitcoin's best-funded startup

is seeking to raise $20 million for a fund that will invest exclusively in cryptographic assets. Headed by one-time Coinbase product manager and Runa Capital principal, Nick Tomaino, the fund, called 1confirmation and launched officially today, already boasts impressive early backers. This includes celebrity investor Mark Cuban, who went so far as to praise the fund and its mission. "I think Nick is one of the sharpest minds in the space, and I'm a big believer that there will be transformational apps built on blockchain," Cuban told CoinDesk.

In interview, Tomaino provided more details about the fund's strategy, including its emphasis on moving computer networks from a centralized state to a distributed architecture so as to make them more robust and resilient against attack.

Or, as Tomaino frames it:

"The most interesting and useful thing about blockchains is their ability to empower people in new ways. Blockchains put power in the hands of people, and take it away from large institutions."

According to documents reviewed by CoinDesk, 1confirmation will make initial investments in the $100,000 to $500,000 range in SAFTs and SAFEs, legal vehicles designed to help investors pre-purchase tokens or equity prior to an ICO. 1confirmation will then seek to provide support similar to a traditional venture capital firm, including business development, legal and engineering assistence.

Philosophy of decentralization

Tomaino's fund follows a broader trend now underway in the space: early advocates starting funds to invest institutional money to cryptocurrency. Already, just shy of $2 billion has been invested in token sales, with recent months setting a string of records, according to the CoinDesk ICO Tracker. Yet, institutional investors have acknowledged the high signal-to-noise ratio in the market that makes it difficult to sort out the best ideas. When asked what specific implementations interesting him the most, Tomaino cited the concept of a "work token" – the idea that blockchain tokens can give users the right to contribute to a decentralized organization.

"I'm looking for projects that use tokens to create new organizational structures and behavioral models," he added When asked for some examples, Tomaino began by framing where he believes the industry is today. "The shift right now is around money. So, the biggest example is bitcoin. Fundamentally, what's interesting about bitcoin is the ability to shift the control of money from centralized institutions to people," he said.

Toward tomorrow

Tomaino also provided a few examples of where blockchain technology may be heading. One type of work that seems a likely candidate for tokens, according to Tomaino, is governance functions. "If token holders can act as governors in organizations they can vote on decisions," he said. Prediction markets, where the work that needs to be done is reporting on the outcomes of events, is another area he believes is ripe for decentralization.

"To do that in a decentralized way you can't use an API, because then you are just relying on centralization. You need tokens. To create a model where you're not relying on a centralized source of truth makes a lot of sense," he said. Taken in total, the recurring theme Tomaino stressed is that blockchains create new organizational structure – and that by financially backing founders who understand how cryptography, he's enabling a reinvention of the way that individuals interact with each other and the organizations that they are connected to. In this way, Tomaino sees 1confirmation as transcending the initial coin offering model and its focus on fundraising,

concluding:

"I'm not interested at all in projects that use tokens as a fundraising mechanism."

Blockchain ID Startup ShoCard Raises $4 Million in New Funding

Blockchain startup ShoCard has raised $4 million in new funding from a range of investors.Co-led by AME Cloud Ventures and Morado Venture Partners, two of the company's existing stakeholders, the round also saw participation from Storm Ventures, Danhua Capital and Correlation Ventures, as well as Recruit Strategic Partners and investor Robert Tinker.The completed round brings ShoCard's total venture funding so far to $5.5 million. In July 2015, the startup raised $1.5m in funding from a group of investors that included AME, Digital Currency Group, Enspire Capital and Morado.

Along with the funding, the startup unveiled a new enterprise-facing product, dubbed ShoBadge. The idea, according to the startup, is to eliminate the use of passwords and usernames by using mobile-based encryption, with blockchain technology being used to preserve an immutable record of who has permission to access accounts.

"ShoBadge will use the ShoCard verification, enrollment and authentication tools that leverage mobile devices along with the blockchain as the next generation of identity management, offering CIOs and CISOs a consolidated approach and more secure identity management for their enterprise," Armin Ebrahimi, the firm's founder and CEO, said in a statement.

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Cryptocurrency Mining – What It Is, How It Works And Who’s Making Money Off It

Cryptocurrency Mining - What It Is, How It Works And Who's Making Money Off It

Cryptocurrency Mining – What It Is, How It Works And Who's Making Money Off It

NVIDIA Corporation's second-quarter earnings released earlier this month, though exceeding expectations, elicited cautionary reaction from the investor as well as analyst communities. Traders bid down the stock by over 5 percent on Aug. 11.

One of the reasons cited for the negative reaction was cryptocurrency contributing to much of the outperformance.

Why should it be a cause for alarm?

Analysts Blayne Curtis and Christopher Hemmelgarn of Barclays believes revenue stream from cryptocurrency is fickle. Therefore, the analysts were not in favor of assigning a multiple to it, as it has the potential to become an eventual headwind.

Rival Advanced Micro Devices, Inc. Also had a similar tale to tell. The company indicated that cryptocurrency demand remains strong, while also suggesting that the demand might not last forever.

What Is Cryptocurrency?

Cryptocurrency, as the name suggests, is a form of digital money designed to be secure and anonymous in most cases. It uses a technique called cryptography — a process used to convert legible information into an almost uncrackable code, to help track purchases and transfers.

Giving a simple definition, Blockgeeks says it is just limited entries in a database no one can change without fulfilling specific conditions.

Cryptography is a technique that uses elements of mathematical theory and computer science and was evolved during the World War II to securely transfer data and information. Currently, it is used to secure communications, information and money online.

Cryptocurrencies allow users to make secure payments, without having to go through banks.

Some cryptocurrencies include bitcoin, Bitcoin Cash, Ethereum, DigitalNote, LiteCoin and PotCoin.

Bitcoin has the distinction of being the first cryptocurrency, having been introduced in 2009. Since then, this class of cryptocurrencies mushroomed, with more than 900 currently active.

How Cryptocurrencies Work

A cryptocurrency runs on a blockchain, which is a shared ledger or document duplicated several times across a network of computers. The updated document is distributed and made available to all holders of the cryptocurrency.

Every single transaction made and the ownership of every single cryptocurrency in circulation is recorded in the blockchain.

The blockchain is run by miners, who use powerful computers that tally the transactions. Their function is to update each time a transaction is made and also ensure the authenticity of information, thereby ascertaining that each transaction is secure and is processed properly and safely.

As payment for their services, miners are paid physically minted cryptocurrency as fees by vendors or merchants of each transaction.

The value of the cryptocurrency fluctuates based on demand and supply, although there is no fixed value for it. Buyers and sellers agree on a value, which is fair and is based on the value of the cryptocurrency trading elsewhere.

Since there is no intermediary like bank involved in the transaction, as it is a peer-to-peer transaction, the transaction fee that is associated with credit cards is eliminated. The identity of the buyer and seller are not revealed. However, each and every transaction is made public to all the people in the blockchain network.

One can acquire a cryptocurrency through exchanges found online or trade it for traditional currencies.

Assume X wants to buy an item valued at $10,000 and he realizes that the seller Y accepts cryptocurrency, say bitcoin, as a form of payment. X scouts around to find the prevailing exchange rate, say $1,000 per currency. X gets Y's public Bitcoin address from Y's website, although both parties remain anonymous to each other.

X can now instruct his Bitcoin client or the software installed on his computer to transfer 10 bitcoins from his wallet to Y's address. X's Bitcoin client will electronically sign the transaction request with his private key known only to him. X's public key, which is a public information, can be used for verifying the information.

When X's transaction is broadcast to the Bitcoin network, it would be verified in a few minutes by miners. The 10 bitcoins will now be transferred to Y's address.

Mining

Cryptocurrency mining includes two functions, namely: adding transactions to the blockchain (securing and verifying) and also releasing new currency. Individual blocks added by miners should contain a proof-of-work, or PoW.

Mining needs a computer and a special program, which helps miners compete with their peers in solving complicated mathematical problems. This would need huge computer resources. In regular intervals, miners would attempt to solve a block having the transaction data using cryptographic hash functions.

Hash value is a numeric value of fixed length that uniquely identifies data. Miners use their computer to zero in on a hash value less than the target and whoever is the first to crack it would be considered as the one who mined the block and is eligible to get a rewarded.

The reward for mining a block is now 12.5 bitcoins.

Earlier, only cryptography enthusiasts served as miners. However, as cryptocurrencies gained in popularity and increased in value, mining is now considered a lucrative business. Consequently, several people and enterprises have started investing in warehouses and hardware.

As enterprises jumped into the fray, unable to compete, bitcoin miners have begun to join open pools, combining resources to effectively compete.

Bank of New York Mellon Corp has been running an internal blockchain platform for U.S. Treasury bond settlements since early 2016, a Marketwatch report quoting Morgan Stanley said. The private nature of the platform has kept it out of the regulatory purview. Once the bank decides to roll it out to clients and use it commercially, regulatory oversight might come into the picture.

A complete mining kit consists of graphics cards, a processor, power supply, memory, cabling and a fan, which would cost between $2,400 and $3,800 on Amazon.com, Inc. According to Bloomberg.

The top three mining hardware, according to 99bitcoins.com, are Avalon6, AntMiner S7 and AntMiner S9.

Given that existing GPUs aren't powerful enough, now miners are flocking to application-specific integrated circuits, or ASICs. To circumvent this shortcoming, Nvidia and AMD are said to be working on GPUs, which could be used specifically for the purpose.

The two companies who are dominant in consumer-grade mining hardware are Canaan and Bitmain. Bitmain, based in Beijing, does mining as well as manufactures mining hardware.

Mining Pools And Their Share Of Mining

Mining pools including bitclub network

Mining pools are concentrated in China, which boasts of 81 percent of the network hash rate.

Why Mining Chips Are A Fickle Revenue Stream

For companies such as AMD and Nvidia, which have dominant positions in the gaming chip market, a focus away from their core business may not be a prudent course of action.

As seen, these companies may have to bring out new GPUs designed exclusively for this purpose to pose a real threat to the ASIC chips, which are predominantly manufactured by the Chinese, who are notorious for their low-cost market positioning. How viable is the spend on such exclusive chips is a moot point.

Additionally, national governments and exchanges are mulling over regulation of the whole realm of cryptocurrencies. Japan has recently introduced legislation to protect users after Tokyo-based Bitcoin exchange Mt Gox collapsed in 2014. Similarly, introducing taxation such as capital gains tax on Bitcoin sales may also impede the cryptocurrency industry.

Author: Shanthi Rexaline , Benzinga Staff Writer

August 21, 2017 8:59am

Posted by David Ogden
Entrepreneur

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

US Lawmakers Draft Bill Protecting Cryptocurrencies from Gov Interference

Several members of the US Congress are drafting legislation

that is intended to recognize certain digital currencies and protect them against interference from the federal government. The bill, which will provide protection to cryptocurrencies that comply with certain minimum requirements to prevent them from being used by those engaged in illegal business practices like drug traffickers and terrorists, is expected to be filed in September 2017, according to DailyCaller. ased on a reliable source, at least one Republican senator and two Republican congressmen are working on the draft legislation. The legislators, however, have requested that should not be identified due to the sensitivity of the issue and the complexity of the proposed solution.

Basic features of the bill

According to the source, the bill will focus on how to make the digital currencies as part of the mainstream form of payments being used in the country like the dollar. Among the proposals are to protect the virtual currencies against harassment from the federal government, prevent the currencies from being considered as a form of security or investment and to protect the transactions using the currencies against taxation.

Latest developments in the cryptocurrency market

During trading on Aug. 18, 2017, the price of the new digital currency Bitcoin Cash has increased by 40 percent in the past days. The most popular cryptocurrency, Bitcoin, meanwhile, sustained its phenomenal performance and is now valued at nearly $4,400. The leading virtual currency has already posted an increase of more than 300 percent in 2017.

However, the popularity of Bitcoin has been tainted with some controversies including a claim that a young British model was kidnapped and auctioned off on the underground web market as a “sex slave,” with the criminals asking payment in the form of Bitcoin because the digital currency is allegedly untraceable. Various other cyber crimes have been linked to Bitcoin in the past years, making it extremely important for lawmakers to establish policies and regulations in place for cryptocurrency.

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Reasons Why Central Banks Will Miss the Next Currency Renaissance

Eugéne Etsebeth is an ex-central banker who was employed as a technologist

at the South African Reserve Bank from 2013 to 2017. During his time at the reserve bank, he notably chaired the virtual currency and distributed ledger working group. In this opinion piece, Etsebeth outlines why he believes central banks won't be able to adapt to innovations in cryptocurrency, arguing they simply aren't set up to compete with sea changes in technology.

It's a familiar trend, one that happened in communications (internet), and that is now playing out in energy (solar), manufacturing (3D printing) and finance (cryptocurrency) – power and control are moving into the hands of the individual and away from nation states. This has huge implications for central banks, which today enable nation states to maintain their monopolies over the issuance of notes, coins and sovereign bonds. While communications and manufacturing are not their focus, cryptocurrencies and initial coin offerings (ICOs) fall predominantly in the realm of central banks.

In these systems, central banks don't issue legal tender. Rather, miners and algorithms now control the issuance of tokens – effectively, the money supply. Whereas previously banks were licensed to store, send and spend currency, now wallet providers and exchanges allow the same features. The currency renaissance has arrived and central banks are studying cryptocurrencies, though some central banks are more open to change than others. Singapore has been investigating the notion of using distributed ledger technologies to settle cross-border transactions in real time, and the Bank of England has experimented with Ripple. Central banks are even looking to build their own versions of central bank-issued digital currency (CBDC).

Even still, central banks are not well equipped to deal with the cryptocurrency renaissance. In fact, there are 10 good reasons why most central banks will find cryptocurrencies insurmountable. Sure, a small number of forward-thinking (and acting) central banks will maintain monetary competiveness with the burgeoning cryptocurrencies and ICOs that have reared their decentralized heads. Still, most will succumb to a mix of the following issues:

Workforce of the past

Central banks will need to attract and retain fresh talent that will enable them to deal with the new openness and transparency demands, as well as digital transformation and the increasingly complex global world.

Slow decision-making

Decision-making in central banks is like wading through treacle – decisions take months because of numerous layers of hierarchy. Working groups need to compile voluminous and detailed documents that need to be reviewed and signed by all parties before they can proceed to the heads of departments or the deputy governors.

Too few technologists and innovators

Academics, economists and big-picture thinkers excel in central banks. The academics ponder on conceptual issues and the economists make interpretations from data, whereas the policy makers and regulators mull over the cause and effect of promulgating laws. However, technologists are generally not part of the discussion when it comes to policy and economic decisions for currency.

Fear of experimentation

Although some central banks are engaging in experimentation, there is a fear of going from proof-of-concept to pilot phase. This is natural, should a central bank make an error, it may turn out to be a reputation buster – and reputation is the cornerstone of central banks. There is also some trepidation that the early regulation of cryptocurrencies, and associated new technologies, may legitimize their adoption.

Territorial and siloed thinking

Central banks are similar to conglomerates in that they have a number of different and distinct departments that require diverse skills and outputs. These differences make it difficult to approach a new technology and economic tour de force like cryptocurrency, because it doesn’t fit neatly into any one of the industrial-style conglomerate domains. To highlight the conglomerate type nature of central banks, the core departments and skill sets are listed below:

Bank supervision: mainly supervisors and regulators who manage banking licenses and audit
Currency management: manufacturing and logistical planners
Financial markets: front, middle and back office currency and bond traders
National payments: a combination of regulators for payments and technical resources running the RTGS system
Research: mainly economists who produce statistics based reports and input into repo-rate decisions.

Buy versus build approach

Most central banks do not have substantial software development capability. Therefore any new project will have to buy its technology. There is an acute shortage of central bankers who can explain or use Merkle trees.

Stuck in the status quo

A large portion of central bankers are career central bankers, so the desire and ability to change are not incentivised. Change is often considered a threat to staff, and threats are met with jelly-like stickiness to the status quo.

Incumbent relationships

Banks are licensed to operate by central banks, giving them the ability to create money from customer deposits. The central bank asks the banks to protect depositor's hard-earned money and to serve as many customers as it can: i.e. maximizing financial inclusion. The task of banks is therefore to service a nation's citizens at the behest of the central bank. These relationships and licenses are expensive to buy and will not easily be changed to include new members.

Inter-governmental coordination

Just as the departments within central banks tend to be siloed, so too are the intergovernmental departments that look at currency matters. They cover treasury, financial intelligence (KYC), financial services conduct authority, central bank, tax revenue and secret service units. Each of these units may have different acts and regulations that overlap cryptocurrencies and ICOs.

International coordination

Internationally the nation-state must get guidance from a multitude of organisations like the G20 or G7, International Monetary Fund (IMF), Bank of International Settlements (BIS), Financial Action Task Force (FATF) and INTERPOL. International coordination often requires prolonged diplomacy and mismatched agendas.

Chuck Reynolds

Marketing Dept
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Please click either Link to Learn more about -Bitcoin.

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Cryptocurrency

What is a 'Cryptocurrency'

A cryptocurrency is a digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of this security feature. A defining feature of a cryptocurrency, and arguably its most endearing allure, is its organic nature; it is not issued by any central authority, rendering it theoretically immune to government interference or manipulation.

BREAKING DOWN 'Cryptocurrency'

The anonymous nature of cryptocurrency transactions makes them well-suited for a host of nefarious activities, such as money laundering and tax evasion.The first cryptocurrency to capture the public imagination was Bitcoin, which was launched in 2009 by an individual or group known under the pseudonym Satoshi Nakamoto. As of September 2015, there were over 14.6 million bitcoins in circulation with a total market value of $3.4 billion. Bitcoin's success has spawned a number of competing cryptocurrencies, such as Litecoin, Namecoin and PPCoin.

Cryptocurrency Benefits and Drawbacks

Cryptocurrencies make it easier to transfer funds between two parties in a transaction; these transfers are facilitated through the use of public and private keys for security purposes. These fund transfers are done with minimal processing fees, allowing users to avoid the steep fees charged by most banks and financial institutions for wire transfers.

Central to the genius of Bitcoin is the block chain it uses to store an online ledger of all the transactions that have ever been conducted using bitcoins, providing a data structure for this ledger that is exposed to a limited threat from hackers and can be copied across all computers running Bitcoin software. Many experts see this block chain as having important uses in technologies, such as online voting and crowdfunding, and major financial institutions such as JP Morgan Chase see potential in cryptocurrencies to lower transaction costs by making payment processing more efficient. However, because cryptocurrencies are virtual and do not have a central repository, a digital cryptocurrency balance can be wiped out by a computer crash if a backup copy of the holdings does not exist. Since prices are based on supply and demand, the rate at which a cryptocurrency can be exchanged for another currency can fluctuate widely.

Cryptocurrencies are not immune to the threat of hacking. In Bitcoin's short history, the company has been subject to over 40 thefts, including a few that exceeded $1 million in value. Still, many observers look at cryptocurrencies as hope that a currency can exist that preserves value, facilitates exchange, is more transportable than hard metals, and is outside the influence of central banks and governments. The smallest unit of the bitcoin cryptocurrency. Satoshi is named after Satoshi Nakamoto, the creator of the protocol used in block chains and the bitcoin cryptocurrency.

BREAKING DOWN 'Satoshi'

Unlike the physical versions of global currencies, such as the British pound or U.S. dollar, cryptocurrencies predominately exist in the digital world. Despite this difference, a cryptocurrency can be divided into smaller units, just as the pound is broken into pence and the dollar into cents. In the case of bitcoins, the smallest unit available is called the satoshi.

Digital Copy

A duplicate record of every confirmed Bitcoin transaction that has taken place over a peer-to-peer network. Digital copy is one of the security features of the Bitcoin platform that was implemented in order to tackle the problem of double spending.

BREAKING DOWN 'Digital Copy'

The rise of cryptocurrencies became prominent in 2009 with the introduction of Bitcoin. One of the catalysts behind the creation of Bitcoin was the desire to operate in a currency that could not be controlled by any central authority. Unlike the U.S. dollar, which can have its value adjusted for inflationary measures by the Federal Reserve, the Bitcoin is independent of any controlling body. In fact, no one controls the Bitcoin. The Bitcoin operates through a decentralized system which means a network of independent computers worldwide communicate and transmit Bitcoin transactions and data to each other. However, transacting in digital currency using a decentralized system brought about a problem known as double spending.

Bitcoin Exchange

A bitcoin exchange is a digital marketplace where traders can buy and sell bitcoins using different fiat currencies or altcoins. A bitcoin currency exchange is an online platform that acts as an intermediary between buyers and sellers of the cryptocurrency. The currency ticker used for bitcoin is either BTC or XBT.

BREAKING DOWN 'Bitcoin Exchange'

Bitcoin exchange platforms match buyers with sellers. Like a traditional stock exchange, traders can opt to buy and sell bitcoin by inputting either a market order or a limit order. When a market order is selected, the trader is authorizing the exchange to trade his coins for the best available price in the online marketplace. With a limit order set, the trader directs the exchange to trade coins for a price below the current ask or above the current bid, depending on whether s/he is buying or selling.

Bitcoin Unlimited

A proposed upgrade to Bitcoin Core that allows larger block sizes. Bitcoin Unlimited is designed to improve transaction speed through scale.

BREAKING DOWN 'Bitcoin Unlimited'

The development of bitcoin was jumpstarted by Satoshi Nakamoto, who published a paper in 2008 called “Bitcoin: A Peer-to-Peer Electronic Cash System”. The paper described the use of a peer-to-peer network as a solution to the problem of double-spending. The problem – that a digital currency or token can used in more than one transaction – is not found in physical currencies, as a physical bill or coin can, by its nature, only exist in one place at a single time. Since a digital currency does not exist in the physical space, using it in a transaction does not remove it from someone’s possession.

Bitcoin Classic

A fork from Bitcoin Core that proposed increasing the size of blocks. Despite early successes, Bitcoin Classic failed to be adopted by the wider bitcoin community.

BREAKING DOWN 'Bitcoin Classic'

Bitcoin was jumpstarted by Satoshi Nakamoto, who published a paper in 2008 called “Bitcoin: A Peer-to-Peer Electronic Cash System”. The paper described the use of a peer-to-peer network as a solution to the problem of bitcoin for more than one transaction), with transaction details added to the end of block chains. Because of the computational power needed to attack and decode a block chain, bitcoin is able to retain a high level of security. This limited the need for transactions to go through trusted third-parties, such as financial institutions.

Litecoin

Launched in the year 2011, Litecoin is an alternative cryptocurrency based on the model of Bitcoin. Charlie Lee, a MIT graduate and former Google engineer, is Litecoin's creator. Litecoin is based on an open source global payment network that is not controlled by any central authority. Litecoin differs from Bitcoins in aspects like faster block generation rate and use of scrypt as a proof of work scheme.

BREAKING DOWN 'Litecoin'

Litecoins were launched with the aim of being the "silver" to Bitcoin's "gold," and have gained much popularity since the time of inception. Litecoin is a peer-to-peer internet currency. It is a fully decentralized open source, global payment network. Litecoin was developed with the aim to improve on Bitcoin's shortcomings, and has earned industry support along with high trade volume and liquidity over the years. The broader differences between the two cryptocurrencies are listed in the table below.

Altcoin

coins are the alternative cryptocurrencies launched after the success of Bitcoin. Generally, they project themselves as better substitutes to Bitcoin. The success of Bitcoin as the first peer-to-peer digital currency paved the way for many to follow. Many altcoins are trying to target any perceived limitations that Bitcoin has and come up with newer versions with competitive advantages. There is a great variety of altcoins.

BREAKING DOWN 'Altcoin'

"Altcoin" is a combination of two words: "alt" and "coin"; alt is short for alternative and coin signifies currency. Thus together they imply a category of cryptocurrency that is alternative to the digital currency Bitcoin. After the success story of Bitcoin, many other peer-to-peer digital currencies have emerged in an attempt to imitate that success.

Bitcoin XT

A fork from Bitcoin Core that proposed increasing the size of blocks from one megabyte to eight megabytes. Bitcoin XT gained first attention in 2015.

BREAKING DOWN 'Bitcoin XT'

Bitcoin was started by Satoshi Nakamoto in the 2008 paper “Bitcoin: A Peer-to-Peer Electronic Cash System.” The paper described the use of a peer-to-peer network as a solution to the problem of double-spending, with transaction details added to the end of blockchains. Managing the blockchains required substantial computational power in order to maintain security.

Coinjoin

An anonymization strategy that protects the privacy of Bitcoin users when they conduct transactions with each other. Coinjoin requires multiple parties to jointly sign on an agreement to mix their coins when engaging in separate Bitcoin transactions. Also known as Coin Mixing.

BREAKING DOWN 'Coinjoin'

Advancements in technology are introducing digital tools that companies can use to better interact with their customers. A rising shift from traditional platforms to digital platforms has also brought about an abundant supply in data from sources like social media, mobile devices, online retail platforms, etc. Due to technology advancements in the areas of gathering, storing, and sharing data, large sets of data are easily shared among companies in every sector and country for little to no costs. The widespread accessibility of data has also brought about concerns over data privacy of individuals and their online transactions. Because every transaction or activity carried out online leaves a digital trail, individuals are opting for more anonymous ways to use the internet and conduct online transactions. The Bitcoin cryptocurrency was introduced to address the issue of privacy concern.

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Blockchain May Give Rise To Even Smarter B2B Marketplaces

Blockchain May Give Rise To Even Smarter B2B Marketplaces

Does blockchain mean boom or bust for existing B2B networks? On one hand, blockchain — a series of open and global distributed ledgers — promises to smooth and validate the interactions that take place between organizations and their customers, partners and suppliers. On the other, blockchain's value proposition is that it takes out the middlemen in transactions, enabling more autonomous type of engagements.

Moving up step by step, with blockchain

As the dot-com boom crested a couple of decades back, we saw a plethora of online B2B exchanges emerge across key industries, promising electronically delivered communications and trading between hubs, suppliers, customers and other involved parties. Some of these key exchanges have become prominent players within their industries. Now, blockchain is entering the enterprise mainstream. Recently, some major tech players including Microsoft and Intel have come together to form what they call the "Coco Framework," which offers enterprises the performance, confidentiality, governance, and required processing power they would seek before trusting their assets and data to an unseen, commonly shared platform.

Blockchain promises to eliminate the middlemen in transactions, thanks to its transparent and immutable “smart contracts” embedded within its worldwide code. I recently had the opportunity to sit down with Marco De Vries, senior director of product marketing for the OpenText Business Network, which now oversees such longstanding industry B2B networks as Covisint and ANX. For his part, De Vries does not see blockchain as a threat to existing B2B networks, just as previous technology revolutions such as XML have often resulted in more complexity, not less. “We’ve seen the stories of the end of EDI and B2B for a long time,” he points out. “Even if blockchain takes off, for certain industries, it probably isn’t right for every part of the supply chain,” De Vries. “Many predicted AS2 standards would replace B2B networks. What we found with AS2 standards is that organizations actually faced more and more complexity. It’s difficult to keep up with all the changes. There are 50 different XML standards, and if I’m in a lot of different industries, how am I going to keep track? I can’t foresee the world managing their own blockchains.”

Blockchains can’t exist entirely in some virtual space, De Vries says. “Even with blockchain, we need to understand where systems of record reside,” he says. “It still has to be hosted somewhere. If you want to send an order, if you want to kick off an alert, how is that done? I can’t honestly see the world with its own blocks — there will be millions, billions of them. And securing them is another matter.”

At the same time, blockchain offers potential for easing and speeding up transactions between trading partners. “It certainly enhances the traceability of high-value items or highly regulated items such as meat, poultry and pharmaceuticals.” While the first application of blockchain has been digital money, “the physical supply chain takes it to a different level,” he continues. “If I’m in retail and I order high-value china — easily breakable stuff – with the Internet of Things, it becomes more relevant, with demand signals along the supply chain, with impact sensors, for example, in different providers, trucks, trains boats. Or, in another example if a certain item has to be kept at a certain temperature, it’s about monitoring the conditions of goods as they move through the supply chain." In current chains of custody for spoiled goods, "you really don’t have insight to what happened along the way,” he adds.

A report from IBM, issued earlier this year, agrees that there is an upside for digital marketplaces. “A blockchain-enabled digital marketplace is the one area where organizations anticipate significant disruption,” the report's authors observe. Two-thirds of executives in digitally advanced companies expect new blockchain-enabled marketplaces to spark significant disruption. "As more organizations anticipate a higher percentage of their revenues shifting into services, digital marketplaces that support blockchain-based peer-to-peer messaging and transactions could be more widely used. Smart contracts could automatically track consumption."

Corporate supply chain executives are seeing the possibilities in blockchain. A recent survey of 42 supply chain managers from Chain Business Insights finds that 43% intend to introduce blockchain into their supply chains over the coming year, and another 20% within the next two years. Advantages seen include improving supply chain visibility and transparency (cited by 46%), while 24% see potential to reduce transaction costs. 80% of respondents indicate that blockchain will play a role in tracking products moving through the supply chain. Another 60% see it as a way to share information with suppliers. A similar number see it as a way to share payment information such as purchase orders.

Adoption hurdles include lack of awareness and understanding, cited by 28%, along with lack of standards an interoperability concerns, also cited by 28%. “There is still a long way to go before the technology gains widespread acceptance,” said Sherree DeCovny, co-founder and principal of Chain Business Insights. “Still, key capabilities such as product tracing and verifying product chain of custody will likely drive to higher levels of awareness in the near to medium term.”

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Forget oil, Russia goes crazy for cryptocurrency

MOSCOW (AFP) – Standing in a warehouse in a Moscow suburb, Dmitry Marinichev tries to speak over the deafening hum of hundreds of computers stacked on shelves hard at work mining for crypto money.

"The form of currency we are used to is about to disappear," predicts the 42-year-old entrepreneur, who also works as President Vladimir Putin's adviser on internet matters.

Marinichev is one of Russia's leading crypto-businessmen at the helm of operations in this facility larger than a football pitch located in a former Soviet-era car factory, which collects virtual money on the accounts of its clients.

Individuals, or firms like Marinichev's, provide the computing power to run the so-called blockchain which records the world's virtual money transactions. In return for providing that service they receive virtual money, of which bitcoin is the most popular, as payment – a process bitcoiners call "mining".

Mining farms like this represent a growing craze in Russia for bitcoin and other virtual currencies not backed by governments or central banks that are increasingly used for goods and services on the internet.

The hunt for virtual currencies is accessible "to anyone who may be hardly familiar with computer science," Marinichev said. "It's no more complicated than buying a cellphone and connecting to a mobile network." The practice has become so popular in Russia that computer stores in the country have run out of graphic and video cards developed for gamers but are used by bitcoin miners to boost the processing power of their home computers.

Marinichev this week unveiled a more sophisticated setup, inviting investors to pitch in US$100 million to join a mining club and develop a Russian mining chip called Multiclet through his startup.

"The explosion of virtual currency value has made mining profitable enough to make it a professional activity," said Sergei, a 29-year-old computer scientist who runs half a dozen graphics cards plugged into the electrical grid of the company where he works.

He launched his mining operation in March, when the value of bitcoin and its main competitor ethereum, created by Russian-Canadian Vitalik Buterin, reached record heights on the currency's exchange.

Since the beginning of 2017, bitcoin has quadrupled in value, surpassing US$4,000 at the weekend, while ethereum experienced a rise of 4,500 per cent to hit a record of US$374 in June, later falling to US$268 in August.

While the assembly of a mining operation is easy enough, it consumes a large amount of electricity, which can reach the equivalent of several households' needs.

"All my friends who were interested in Bitcoin or ethereum built their devices and plugged them into their corporate networks, and I did the same," Sergei said. "Others cut into the municipal electrical cables."

Russia has a competitive advantage as an environment for mining, as Marinichev points out in a brochure for prospective investors: electricity here costs just 1.3 US cents per kilowatt hour while long winters save money on cooling systems.

Authorities in Russia were long suspicious of virtual money but have now come to recognise it as a force. A new bill is set to be debated this autumn which aims to regulate the possession and creation of crypto currency in the country.

The legal foundation for virtual money has so far been non-existent in Russia and it is associated with illicit activities like hacking and used to purchase drugs on the dark web.

"There is now an understanding at the highest level in the country that virtual currencies are not an absolute evil but a possible good, especially for the economy," said Marinichev.

Putin in early June even held a meeting at an economic forum with Buterin, the 23-year-old creator of ethereum, who lobbied the Russian president to expand the currency's use in Russia.

Last year, Russia's largest banks tested the platform for some of their transactions. The country's central bank even pondered development of a "national virtual currency".

Though at all-time-high in August at US$116 billion, the global cryptocurrency market is still quite young, volatile and prone to speculation.

Bitcoin, for example, lost almost a third of its value between mid-June and mid-July, before gaining it back over the course of a week. Since then, it has been regularly breaking records.

"The rush to virtual money is not a fad or a fleeting phenomenon. The virtualisation of our lives is a market process that has gone on and will continue," Marinichev said.

In a sign of the times, several cafes and restaurants in Moscow this summer began to accept payments in virtual currencies.

David Ogden
Entrepreneur

Source: The Straits Times

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

What Would Happen if Cryptocurrency Became More Popular Than Cash

What Would Happen if Cryptocurrency Became More Popular Than Cash?

t's not outlandish to think that our current financial system will soon be replaced by cryptocurrency, and the shift will bring about some big changes to the global economy.

THE FLIPPENING

For a time, Bitcoin seemed unassailable in its dominance of the cryptocurrency market, being the first digital currency to really take root and establish itself in the mainstream. Since then, a host of worthy competitors have emerged, and there’s a real possibility that the balance of power could flip.

Many who have been regularly following developments in the cryptocurrency market refer to the tipping point where one digital currency supersedes another as “the flippening” We almost saw this occur in May 2017, when Ethereum’s market cap approached Bitcoin’s amid a surge in popularity.

When individuals have significant amounts of money invested in one cryptocurrency over another, it’s no surprise that tensions run high when they go head to head. However, these squabbles over which coin is best might be distracting us from a more pressing issue.

Some observers would argue that the true flippening isn’t a case of competition between two different forms of cryptocurrency at all. The sea of change yet to come could have more far reaching consequences, if and when digital currency as a whole becomes more popular than conventional fiat currency.

NEW MONEY

There would be some major advantages to an all-cryptocurrency future: its value can’t be manipulated as easy as fiat currency, and it lends itself to the concept of universal basic income. In fact, several different programs, such as uCoin and Cicada, are already using cryptocurrency to distribute UBI.

In a future where our transactions with shops and services are likely to be handled by automated systems, cryptocurrency removes many of the intermediaries that would take their own cut. There are many benefits for the individual, but the flippening stands to pose some major challenges for the global economy in its current form.

Should cryptocurrency manage to jump ahead of fiat money in terms of usage, cash won’t be able to close the gap. That’s the trick to the flippening — once changeover takes place, the losing party loses value and can’t do anything about it.

If everyone begins using cryptocurrency, infrastructure would need to be developed with that in mind. It might not take too long for cash to become incompatible. At this point, it remains to be seen whether established financial institutions could pivot to that new status quo in time.

At the highest level, governments will be hit hard, as they will no longer exercise the same level of control over the country’s currency. The idea of printing more money has been raised time and time again in response to financial turmoil, but that option disappears once currency has to be mined.

The flip from fiat money to cryptocurrency is a very real prospect, and it could well change the face of how our society spends and saves.

David Ogden
Entrepreneur

David Ogden Cryptocurrency Entrepreneur

Author: Brad Jones

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

NEO Co-Founder Banks On Blockchain To Build A Smart Economy

The financial world, ecommerce, and other industries that witness millions of transactions each day, should prepare for fast-moving changes in order to stay ahead of competition and facilitate the rise of new solutions as well as accommodate the growing needs of businesses and consumers alike.

Today, ecommerce and the financial sector are being thoroughly shaken up by blockchain – a distributed ledger technology built to power bitcoin. It’s changing the financial services sector with banks scrambling to claim their piece of the pie. The technology itself has introduced new payment methods, smart contracts, and even new ways to verify digital identity. I spoke with Da Hongfei, co-founder of blockchain group NEO – formerly AntShares – who views blockchain as the key to a new “smart economy” where a comprehensive blockchain ecosystem could create better ways of managing financial transactions. The emergence of these new technologies is set to change every industry.

Da Hongfei, co-founder of blockchain group "NEO"

– formerly known as AntShares, which made headlines as a top 10 Cryptocurrency by market cap, on August 8th, 2017.Let’s look at a number of examples to illustrate the pace and nature of this ongoing disruption.

Smart contracts

New blockchain platforms are now able to handle smart contracts. Smart contracts are software that can track and automate the fulfillment of agreements over the blockchain. Certain actions can be triggered if a term in the contract is met. This allows developers to create a variety of blockchain-powered services. NEO is one of the platforms that offers smart contracts. It dubs its smart contracts “Smart Contracts 2.0.” These smart contracts can be built using a variety of programming languages in order to lower

the barriers to developer adoption.

“NEO developers can write smart contract code in .NET and Java/Kotlinm, and we are currently testing integration with Go, JS, and Python for a rollout in the future. This will allow a great number of developers globally to build smart contracts on NEO,” Da mentions.

The technology offers interesting opportunities for business-to-business (B2B) enterprises. B2B agreements can be made and fulfilled over the blockchain. For example, businesses could leverage smart contracts for use with suppliers and distributors in automating supply chain. This even promises consumers the possibility of making big-ticket purchases such as real estate and automobiles over the blockchain.

Cryptocurrencies

Blockchain has brought us cryptocurrencies. Bitcoin, the most popular cryptocurrency, is now worth almost three times the price of gold. It’s also gaining acceptance in more markets as countries have started to put up regulations for its use. Japan, in a bold move, declared bitcoin a legal payment method which compelled retailers to adopt solutions to be able to accept bitcoin even for brick-and-mortar establishments. As for ecommerce, accepting cryptocurrencies such as bitcoin is relatively simpler. Bitcoin wallet services such as BitPay allow users to accept bitcoin through buttons and, for more advanced users, APIs. For instance, bitcoin services now provide merchant services to enable ecommerce companies to accept bitcoin. Through such a service, merchants would also be able to exchange it for fiat currency and vice versa giving them flexibility in which currency to use.

New blockchain platforms have also allowed the creation of more cryptocurrencies. Ether (from the Ethereum blockchain) and bitcoin cash (the new fork of the bitcoin blockchain) are the next two top cryptocurrencies priced at $300 and $320 as of writing. NEO’s own token is now among the top 10 cryptocurrencies with a market cap of more than $1.4 billion thanks to the company introducing new products, as well as its rebranding efforts.This material should not be construed as an offer to sell or the solicitation of an offer to buy any security in any jurisdiction. I have no positions in any of the securities mentioned above.

Cross-border transactions

Blockchain and cryptocurrencies are now widely used in payments and remittance. Since transactions occur in the blockchain, cross-border payments still have cheaper rates than other solutions. In contrast, traditional payments and remittances often have to be routed through several institutions and can undergo several clearing processes for transactions to complete. Newer blockchain platforms can offer quicker confirmations of transactions. Payments and remittances done even when done cross-border over blockchain can be completed in real-time. Because of this, cryptocurrencies are finding increased use for remittances in developing countries. If cryptocurrencies become preferred modes of payment in these markets then ecommerce companies would have little choice but to provide support for such payment methods much like how cash on delivery became an in-demand service for emergent markets.

Fraud prevention

Fraud continues to be a major concern for businesses. US retailers lost $32 billion from fraud in 2014. Because of this, fraud prevention has become a segment on its own with payment gateways and card processors offering transaction filters and identity verification services to merchants. Blockchain actually has applications in security and fraud prevention as well. For example, blockchain startup Civic combines blockchain and cryptographic hashing to create an encrypted digital fingerprint for users while leveraging decentralization and avoiding storing personal information anywhere.

In a similar effort, NEO is also incorporating digital identity in its platform.

“We believe blockchain usage will eventually integrate real world applications, such as digital assets based on digital identity. This would allow for better anti-money laundering and know your customer capabilities in blockchain, of which there is a paucity in the modern blockchain ecosystem,” Da said.

Such mechanisms offer the potential for more accurate means to prove identity in ecommerce transactions. For merchants, this means less instances of chargebacks or rejected transactions since users are properly verified.

Ecommerce in a “smart economy”

Much like how mobile changed the way people behave, blockchain has the potential to redefine how commerce is done. For ecommerce, the potential effects of these new developments are multifaceted. The increasing acceptance of cryptocurrencies may give rise to new preferred payment methods. Developments in smart contracts would also allow businesses to automate fulfillment of agreements thus speeding up transactions. Enhanced security would also inspire increased confidence among businesses and consumers.

For businesses, it helps keep a watchful eye to these developments in blockchain. As behaviors shift, ecommerce must be ready to adapt and offer better experiences that create a faster, more secure, and convenient ways to do business. It pays to be ready to participate as the world moves towards a smart economy.This material should not be construed as an offer to sell or the solicitation of an offer to buy any security in any jurisdiction. I have no positions in any of the securities mentioned above.

Chuck Reynolds

Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.

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