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The President of Uganda is announced to lead the 2019 Africa Blockchain Conference on the “fourth industrial revolution.”
According to the report, The 2019 Africa Blockchain Conference — not to be confused with The Blockchain Africa Conference 2019 which occurred in April — will be held from July 3 to July 4, and the theme is ’Africa 4.0: Preparing Africa for the 4th Industrial Revolution.’ The conference topics will reportedly include fintech, payment systems, and the future of education.
President Museveni reportedly supported the use of blockchain technology in Uganda during his inaugural speech. Museveni is said to have cited four economic areas that he believes should be supported by blockchain technology: agriculture, manufacturing and processing, services, and the ICT sector.
Blockchain tech firm CryptoSavannah will reportedly be one of the organizers for the 2019 conference. The company’s director, Noah Baalesanvu, commented on the maturation of cryptocurrencies in Africa, saying:
“While initially being marred by scams and cons, significant value has moved to cryptos with major markets like Nigeria, Kenya and South Africa with significant crypto holdings also trading activity.”
In 2018, CryptoSavannah partnered with the major cryptocurrency exchange Binance to gain financial support for blockchain growth in Uganda. Binance CEO Changpeng Zhao claimed that his organization would create thousands of jobs in the country, tweeting:
“@binance will partner with @cryptosavannah @AggieKonde @HelenHaiyu to support Uganda's economic transformation and youth employment through blockchain, embracing the 4th industrial revolution. We will do this by creating thousands of jobs and bringing investments to Uganda.”
As previously reported by Cointelegraph, Binance Charity Foundation signed a Memorandum of Understanding with a non-governmental organization based out of Uganda this April. The MoU aims to bolster the educational system of Kampala by providing a variety of supplies, ranging from solar panels to sanitary pads.
Crypto exchange Bitfinex’s chief technology officer, Paolo Ardoino, hinted at the maximum leverage for the exchange’s upcoming derivatives trading.
In the tweet, Ardoino purportedly indicated the maximum leverage for Bitfinex’ forthcoming derivatives trading, which resulted in a heated discussion between community members.
In response to the answer whether it will be an isolated leverage, Ardoino said that it will be isolated at the beginning, adding that it is better for risk management. Ardoino also revealed that instruments with high leverage will be used separately from the main margin market limited to 3.3x. He stated:
“We have quite a steep margin requirement enforcement, with position increases. I'm proud of the result and the protections we have. Of course we'll have to learn also from experience.”
Recently, Bitfinex announced a LEO token burn initiative that will see the exchange’s parent company iFinex funnel its gross revenue into purchasing LEO tokens at market prices as part of the UNUS SED LEO burn mechanism.
This new system will launch alongside the LEO Transparency Dashboard, which will reportedly provide real-time information on collected platform fees and LEO token burns.
Bitfinex-owned hybrid cryptocurrency exchange Ethfinex Trustless announced the launch of its on-chain decentralized over-the-counter service. The system allegedly has no centralized order book or matching engine, and only financial instruments are restricted from the platform.
Over the past 30 days, more than 98% of transactions on the Bitcoin SV network have been used for recording weather data.
Citing data from bitcoin cash (BCH) blockchain visualiser Trends.cash, Painted Frog noted that the vast majority of BSV transactions have been implemented so far for sharing weather data through bitcoin sv-powered app WeatherSV.
Performed actions on BSV blockchain over the past 30 days. Source: Trends.cash
According to the website, other BSV implementations over the past 30 days included bitcoin cash-based social network Memo, an incentivized BDV tool called Open Directory, as well as BSV-powered payment system Money Button. With that, WeatherSV has accounted for more than 1.2 million transactions over the period, while Memo, ranked second according to the number of transactions, has recorded just about 9,000 transactions for the same time span.
Top ten actions on Bitcoin sv blockchain over the past 30 days. Source: Trends.cash
As Painted Frog noted in his tweet, WeatherSV is actually a paid subscription service that hourly copies data from an existing weather website OpenWeatherMap.org, generating the most of transactions on BSV network.
While Bitcoin Cash is the first hard fork of Bitcoin, created back in August 2017, Bitcoin SV is a hard fork version of Bitcoin Cash, and is led by self-proclaimed creator of Bitcoin, Craig Wright, who has recently failed to disclose his bitcoin holdings per court order.
In May 2019, Wright created a wave of discontent in crypto community by filing a copyright claim to a part of bitcoin’s code and its white paper.
At press time, bitcoin cash is the fourth biggest cryptocurrency by market cap, trading at $473.41, while bitcoin SV is ranked eighth, trading at $235.71, according to data from CoinMarketCap.
Analysts are projecting new highs in 2019. What do the charts suggest?
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, you should conduct your own research when making a decision.
Market data is provided by the HitBTC exchange.
The recent rally in bitcoin has turned around sentiment completely. Analysts are projecting a rally to new lifetime highs within the end of this year. Bitcoin Knowledge podcast host Trace Mayer has a target objective of $21,000 based on his analysis.
That would entail a move of about 78.5% from the current levels. Though this number looks easily achievable, especially after the sharp up-move from the lows, as the price moves higher, we anticipate greater supply to hit the market. The people stuck at higher levels from the previous bull market will try to bail out of their positions and the traders who bought at lower levels will book profits. Hence, we expect a correction or consolidation in the markets soon.
The number of people searching google for bitcoin has increased. However, the number is way below the peak hit during the previous bull market. This shows that people are beginning to notice it again but there is still no euphoria around it, which is a positive sign for the long term.
Bitcoin (BTC) has been holding near $11,000 for the past two days, which is a positive sign. This shows that the bulls expect the rally to continue, hence, they are not booking profits in a hurry. If the price stays above the resistance line of the channel, we anticipate the uptrend to resume within a couple of days. Currently, both the moving averages are trending up and the RSI is in overbought territory, which suggests that bulls are in command.
However, if the price dips back into the channel, the pullback can reach the 20-day EMA, which is a critical support. On a bounce off the 20-day EMA, we anticipate the bulls to again try to propel the price towards its target objective of $12,000.
The BTC/USD pair will lose momentum if it drops below the 20-day EMA and the trend will weaken on a breakdown of the 50-day SMA. A breakdown of $7,413.46 will signal a deeper correction.
Ether (ETH) came close to its target objective of $335 on June 22 and 23 but the bulls could not sustain the rise above $322.06, which shows profit booking at higher levels. However, the positive thing is that the cryptocurrency has not given up much ground. A consolidation between $280 and $322.06 indicates strength and increases the probability of a breakout above $322.06.
If the ETH/USD pair closes (UTC time frame) above $322.06, it will complete a rounding bottom pattern that has a target objective of $563.48. However, we expect the pair to face stiff resistance near $480.
Contrary to our assumption, if the pair fails to sustain above $322.06, it can drop to $280. The 20-day EMA is also located close to this level, hence, it is likely to act as a strong support, but if the support cracks, the cryptocurrency will lose momentum.
Ripple (XRP) is retesting the breakout level of the symmetrical triangle. The previous resistance should now act as a strong support. If the price rebounds off this support, the bulls will again try to propel the price to $0.57259 and above it to $0.6250. Both the moving averages are sloping up and the RSI is in positive territory, which suggests that the bulls have the upper hand.
Conversely, if the XRP/USD pair slips back into the triangle and breaks down of the 20-day EMA, it will signal weakness. Its next support is the 50-day SMA, below which a drop to $0.37835 is probable. For now, traders can retain the stop loss on the long position at $0.41. We will suggest to trail stops higher as the price moves northwards.
Though Litecoin (LTC) closed above $140.3450 on June 22, it could not sustain the higher levels and quickly gave back its gains. Currently, the bulls are trying to hold it above the ascending channel. The previous resistance line of the channel should now work as a strong support. If the price rebounds off this support, the bulls will again try to push it towards its target objective of $158.91 and above it $184.7949.
If the bulls fail to defend the support, the LTC/USD pair will re-enter the channel. It has strong support at the 20-day EMA. If this support holds, the bulls will again try to resume the uptrend, but if the support gives way, a drop to the 50-day SMA is possible. Hence, traders can protect their remaining long positions with a stop loss placed just below the 20-day EMA.
Bitcoin Cash (BCH) remains in an uptrend. Both the moving averages are sloping up and the RSI is close to the overbought zone, which shows that the bulls are in command. The price rallied above the immediate resistance of $481.99 on June 22 but turned down from the resistance line of the channel.
If the BCH/USD pair breaks out of the channel, it is likely to pick up momentum and rally to $639 and above it to $889. If the bulls fail to break out of the channel, the pair might dip back to the 20-day EMA. The digital currency will indicate a trend change if it breaks below both the moving averages and the support line of the channel.
While EOS has sustained above the breakout level of $6.8299 for the past three days, it is struggling to move up. This shows a lack of demand at higher levels. Currently, it is back at $6.8299, which is an important support. The 20-day EMA is just above this level, hence, we anticipate buyers to defend this support.
A strong rebound from $6.8299 can carry the EOS/USD pair it to the resistance line of the channel. If this level is scaled, the next level to watch is $8.6503. The moving averages are gradually sloping up and the RSI is just above the midpoint, which shows that the bulls have a slight advantage. Traders can retain the stop loss on the long position at $6.40.
If the bears sink the pair below $6.8299, a drop to the 50-day SMA and below it at the support line of the channel is probable. If the bulls fail to defend the support line of the channel, the trend will turn negative and the price can plunge to $4.4930.
Binance Coin (BNB) has been consolidating near the highs for the past few days. Though it broke out of the overhead resistance at $38.6463356, it could not sustain it. This shows profit booking at higher levels. Currently, the bulls are attempting to rebound from the 20-day EMA. If successful, we anticipate another attempt to rally to $46.1645899 and above it to $50.
On the other hand, if the bulls fail to ascend the overhead resistance, the BNB/USD pair is likely to drop below the 20-day EMA and consolidate between $28 and $38.6463356 for the next few days. Therefore, traders can protect their long positions with a stop loss placed just below the 20-day EMA. The trend will turn bearish on a breakdown of $28.
The bulls have held the price of Bitcoin SV (BSV) close to the highs, which is a positive sign. It shows a lack of selling near the resistance. The bears have not even been able to drag the price to the 20-day EMA. Both the moving averages are sloping up and the RSI is close to the overbought zone, which shows that bulls clearly have the advantage.
If the price rebounds from the uptrend line and breaks out of $255.620, it will resume the up move that has a price target of $307.789 and above it $340.248. The probability of a breakout is high as long as the BSV/USD pair stays above the 20-day EMA.
However, if the bears sink the price below the 20-day EMA, the momentum will weaken. In such a case, a range-bound action between $175 and $255.620 is likely. The trend will turn down if the price sustains below $175.
Tron (TRX) has again entered the top 10 cryptocurrencies by market capitalization. It has rallied sharply in the past two days and is close to the June 2 high of $0.04156575. If the price breaks out of the overhead resistance, a rally to $0.05218328 is possible.
Both the moving averages are gradually moving up and the RSI is in positive territory, which suggests that bulls have the upper hand. The TRX/USD pair has started a new uptrend after a long consolidation, hence, we anticipate the up-move to continue for some time. Our bullish view will be invalidated if the price reverses direction from the current levels and breaks down of the critical support of $0.02815521.
Cardano (ADA) again broke out of the overhead resistance at $0.10 on June 23 but failed to sustain the higher levels. However, the positive thing is that it has held above the moving averages for the past few days. This shows buying on dips.
If the bulls break out and sustain the ADA/USD pair above $0.10, it will complete a reversal pattern that has a target objective of $0.22466773. The traders can wait for a close (UTC time frame) above $0.10 and buy as suggested in our earlier analysis.
Our bullish view will be negated if the price fails to break out and sustain above $0.10. In such a case, it might remain range-bound between $0.076254 and $0.10 for a few days.
The U.S. House Financial Services Committee will hear testimony about Facebook’s new cryptocurrency Libra in July.
The United States House Financial Services Committee will be holding a hearing on the social media giant Facebook’s proposed virtual currency Libra on July 17, according to a press release on June 24.
The announcement comes by way of committee chairwoman Rep. Maxine Waters, who previously had called on Facebook to cease work on Libra until Congress and regulators had a chance to scrutinize the proposal:
“Given the company’s troubled past, I am requesting that Facebook agree to a moratorium on any movement forward on developing a cryptocurrency until Congress and regulators have the opportunity to examine these issues and take action.”
In her public statement, Waters also commented on the lack of uniform regulation in the cryptocurrency market and said that regulators should view Facebook’s plans for Libra “as a wake-up call to get serious about the privacy and national security concerns, cybersecurity risks, and trading risks that are posed by cryptocurrencies.”
The Senate Banking Committee is also reportedly scheduled to hear about the details of Libra the day prior, on July 16, in a session called "Examining Facebook's Proposed Digital Currency and Data Privacy Considerations."
As previously reported by Cointelegraph, France is heading efforts to create an international task force focusing on regulating cryptocurrencies via central banks. The task force will reportedly be a G7 committee operating under Benoit Coeure, a board member of the European Central Bank.
France is reportedly against Libra operating as a sovereign currency, and is concerned about how to enforce regulatory compliance, such as for anti-money laundering laws.
Centre consortium founders Coinbase and Circle open invitations to other institutions wishing to issue USD Coin.
Stablecoins have become rather frequently discussed in the news and social media over the past few weeks, especially with the news of the release of the Facebook-backed Libra coin. The current wave of stablecoin issuance could be attributed to the lack of liquidity in the cryptocurrency world. But even though the crypto market is now slowly recovering from a long bear trend, the ecosystem of stablecoins continues to expand even further.
One of the most notable events in the stablecoin space was a recent announcement by Circle and Coinbase. After launching its own digital dollar — called USD Coin (USDC) — in September 2018, Circle (a Goldman Sachs-backed crypto startup) is now opening its doors to other institutions interested in issuing USD Coin. Circle partnered with crypto exchange and wallet company Coinbase to launch a consortium called Centre that will support and develop USD Coin.
What is the consortium about?
Centre is a membership-based framework and governance scheme with an overall aim of growing and developing the idea of digital money. The founders of the consortium aim to build a blockchain-based infrastructure that will enable fiat money to work over the open internet. At the moment, USD Coin is Centre’s first initiative.
Although Circle was the first to issue USDC, the stablecoin’s being listed on Coinbase’s platform on Oct.10, 2018 fueled the coin’s popularity in the crypto space. USDC is reportedly 100% backed by United States dollar reserves, and enables customers to tokenize dollars as USDC and redeem USDC for dollars. Therefore, the Centre consortium acts as a watchdog over the institutions issuing USDC to fiat conversions.
Now, Coinbase and Circle have jointly announced that membership in the Centre consortium is open to other entities looking to participate and own the right to issue or redeem USDC.
Why new members now?
Circle and Coinbase’s vision is to build interoperable protocols and standards for an open global financial system. To achieve this, the two companies are looking to collaborate and partner with other industry players.
However, the opening of membership to the consortium comes at a time when Tether, the issuer of the most popular and eponymous stablecoin, is reportedly facing transparency issues. Although Tether enjoyed a first mover’s advantage in the stablecoin space, it has also had to deal with the many challenges that come with sustaining a stablecoin’s value.
Among the mistakes that Tether made at the start was the failure to secure a credible third-party auditor. Plus, compared to other blockchains, the Tether Omni protocol is much slower. In response, Tether has recently introduced an ER-C20 version of its stablecoin.
However, as a trailblazer of the stablecoin uprising, Tether has paved the way for other coin issuers and still proves to be useful in the crypto landscape. However, stablecoins like USDC represent the next generation of coins, which are designed to enhance transparency while enabling a user-friendly technology that will increase the speed of cross-border payments.
By allowing new members to join, Centre is looking to use USDC to enable nearly instantaneous settlement across borders. Therefore, Centre is looking to partner with institutions that will contribute to the development of the Centre network
Centre also aims to achieve a greater level of interoperability that will enable USDC to function across multiple private and public chains. Centre claims that this will enable money to function like content and data on the internet.
According to Jeremy Allaire, the CEO of Circle, USDC will have a “huge difference from something like Tether.” Allaire also said:
“Market infrastructure like stablecoins will become the base layer that supports every financial application. It has to be legitimate, trustworthy and be built on open standards.”
Ultimately, bringing new members into the Centre consortium is set to enable better standardization for USDC issuers across the globe. The new USDC issuers will have to comply with Centre’s rulebook. Plus, Centre’s board of managers will provide guidelines for the safe investment of USDC to limit various risks. The move will also decentralize control of USD Coin, as the issuers will become part of the governing body.
How institutions can join Centre
Institutions that want to join Centre and become issuers of USD Coin will have to agree with Centre's operating rules.
To begin with, the institutions must be “licensed and regulated to support electronic money services.”
Member institutions will also have to comply with Anti-Money Laundering (AML) and Know Your Customer (KYC) processes as well as Countering the Financing of Terrorism (CFT) rules, as prescribed by Centre.
Custody of fiat reserves is also a requirement. These reserves are set to be audited by Centre on a monthly basis to ensure 100% USDC backing with fiat.
Only companies that meet the technological requirements of Centre's protocol will be allowed membership in the consortium.
Why would a company want to join the consortium?
USDC was the first stablecoin to be issued on the Coinbase platform. Since then, the stablecoin has become popular mostly among traders who use it as a bridge between fiat and cryptocurrency positions.
Although other exchanges such as Binance have also listed the coin on their exchange platforms, USDC users have only been able to redeem their tokens for fiat on Coinbase’s and Circle’s platforms. With this new opening, members will be able to redeem USDC for fiat as well.
USDC issuers will enjoy a level of autonomy such that they will be able to decide their own fee structures for redeeming USDC.
Centre members will also be able to build their own financial products on top of the USDC network. For example, a company will be able to build a lending platform using USDC. As part of the Centre consortium, members also get to play a vital role in determining the future development of the Centre network.
However, according to Gregory Klumov, the CEO and founder of stablecoin platform Stasis, few companies are likely to be interested in joining the consortium. He explained to Cointelegraph:
“Right now, everyone wants to develop their own stablecoin. Last year there were around 150 projects announced. Look at JP Morgan, and other banks like Silvergate and Signature Bank, which all have their own Ethereum-based coins. As long as they think they can gain market share on their own, they’re unlikely to join a consortium. There’s also the huge issue of regulatory uncertainty — we still don’t know how US regulators will address stablecoins, or crypto in general, down the road.”
New members of the consortium
At the moment, no new issuers have been announced. However, there is potential for a huge level of interest in participation, considering the fact that over 100 exchanges support USDC. For example, Nexo, a decentralized lending company, allows its customers to earn compound interest on their USDC balances.
Other companies supporting USD Coin include Bitmain, Crypterium, Bitpanda, Nitrogen and Chainalysis.
These companies, together with the exchange platforms listing USDC, are driving interest among institutions that want to become members of the Centre consortium.
The future of the consortium
With only a few months under its belt, USDC is among the fastest-growing stablecoins at the moment. So far, more than $470 million worth of USDC has been redeemed and over $795 million of USDC has been issued. Centre claims that USD Coin has been used to complete more than $11.1 billion worth of on-chain transfers.
Going forward, Centre plans to grow its fiat token support beyond the U.S. dollar by building an infrastructure that will support new currencies on the Centre network. The plan is to continue in the research and development of smart contracts on the Centre network to enable more payment settlements using programmable money.
As of now, USD Coin is mostly being used by traders, but Centre has hinted at plans to create "a new global digital currency" made up of stablecoins backed by a variety of currencies.
However, some believe that scaling USD Coin will be the least challenging task that the Centre consortium will face. According to Klumov:
“The biggest challenge for stablecoin issuers is commoditization. When you have several stablecoins all pegged to the same currency, and they all hold their peg to more or less the same degree, then it’s difficult to find ways to differentiate yourself.”
What are the prospects?
Apart from Coinbase and Circle, other prominent names that have shown interest in stablecoins include the Winklevoss brothers, who have already launched their own dollar-backed stablecoin called Gemini. IBM has also partnered with Stellar in an effort to create a real-time, controlled global payment network. By introducing a level of compliance to AML and KYC practices, Centre and other organizations are enabling mainstream adoption of stablecoins and other cryptocurrencies for daily transactions.
In Russia, fraudsters rarely use cryptocurrency to withdraw stolen money, according to the country’s central bank.
The first deputy director of the Information Security Department of the Bank of Russia, Artem Sychev, told TASS that the central bank monitors methods of withdrawing funds and develops additional protective measures. Per the bank, criminals prefer to cash stolen money out rather than withdraw them with digital currency. Sychev said:
“In the Russian Federation, this [withdrawing of stolen funds with crypto] is used very rarely. Yes, sometimes cryptocurrencies are used to withdraw funds, but now it is not widespread, because it is much easier for an attacker to get cash."
Sychev added that fraudsters use a bank card to withdraw stolen money, however not more than two to four times, at which point they subsequently get rid of it. Sychev continued:
“It is not so important what technology will be developed in the near future — artificial intelligence or robotization. It is more important for us to understand what technologies and methods an attacker can use not only for an attack, but also for withdrawing money. Our vector of attention will be turned to that direction. For example, if we see that attackers learn to quickly withdraw money through some specific channel, we will accordingly build additional measures of protection.”
As recently reported, blockchain intelligence firm Chainalysis claimed that 64% of ransomware attack cash-out strategies involve the laundering of funds through cryptocurrency exchanges. Among other ransomware cash-out strategies analyzed, 12% involved mixing services and 6% involved peer-to-peer networks, while others went via merchant services providers or dark web marketplaces. 9% of ransomware proceeds reportedly remain unspent.
Another report by Chainalysis revealed that at least 95% of cryptocurrency crimes investigated by law enforcement involve bitcoin (BTC). The company’s COO Jonathan Levin said that law enforcement needs to take more sophisticated approaches to tackle darknets and warned that the crypto industry was starting to see the beginnings of terrorism financing.
The Canadian firm Graph Blockchain Inc has partnered with Seoul’s transportation ministry.
Canadian tech firm Graph Blockchain Inc. has partnered with the Ministry of Transportation in Seoul, South Korea, to run a pilot program for blockchain-based traffic data storage, according to a news release on June 24.
Graph Blockchain reportedly signed a contract for around $55,000 CAD, or approximately $41,695 at press time, to run this pilot program as part of the “Smart City initiative.”
According to the CEO of Graph Blockchain, Jeff Stevens, the company intends to use its blockchain solution to “streamline and protect” traffic data. Graph Blockchain purportedly uses the open source Hyperledger Fabric framework to develop its blockchain solutions.
Near the end of 2018, Seoul’s mayor, Park Won-soon, announced the “Blockchain City of Seoul”: a five-year plan to grow the blockchain industry in South Korea’s capital. Park also remarked that blockchain solutions would be integrated into Seoul’s administration systems, including a voting system, charity management, and vehicle history reports. In May, Park further announced integration of blockchain tech into its citizen ID cards.
As previously reported by Cointelegraph, South Korean banks are also developing blockchain-based solutions, but are not supporting the use of cryptocurrency. Korean crypto influencer Hyun-sik ‘Soso’ Choi commented, saying:
“Korean banks are jumping into the blockchain field. While this proves there is huge interest in the technology from traditional finance, all the attempts are on the tech side. They are ignoring the cryptocurrency part.”
Soso cites governmental support for blockchain innovations, but not cryptocurrencies, as one of the main reasons for the banks’ current approach.
South Korea currently has a ban on initial coin offerings (ICOs), as does China. Japan, however, remains as one of the East Asian countries currently attempting to regulate ICOs, keeping coin offerings and crypto exchanges legal.
A former economic adviser to the Trump administration has come out in support of Facebook’s Libra coin.
In an interview with Yahoo Finance, conservative economist and fellow at The Heritage Foundation Stephen Moore said that he thinks “on balance it is a good thing [Libra].” Moore stated:
“It’s interesting, because this [Libra] represents a new challenge for central bankers that they now have competition from private currencies.
Ethereum co-founder Joseph Lubin, by contrast, said that Facebook’s Libra token is like “a centralized wolf in a decentralized sheep’s clothing,” following the release of Libra’s white paper earlier in June. Lubin argued:
“Perhaps most importantly, it requires our trust that Libra will eventually transition to a more ‘permissionless,’ decentralized system, whereby anyone can validate the network, rather than the restrictive member evaluation criteria keeping control in the hands of the initial 28 firms.”
Moore advised both Herman Cain’s 2012 presidential campaign as well as Trump’s 2016 campaign. He also advised the Trump administration during the writing and passage of the Tax Cuts and Jobs Act.
Facebook’s Libra has also raised concerns with government regulators around the world. The French Minister of the Economy and Finance Bruno Le Maire said that Libra is an “attribute of the sovereignty of the States” and should “remain in the hands of the States and not of the private companies which answer to private interests". Le Maire also asked the governors of the G7 central banks to report what guarantees are to be obtained from Facebook.
Jerome Powell, the head of the U.S. Federal Reserve, also commented on the stablecoin’s launch, saying that he recognizes both the potential benefits and risks to Libra. Powell echoed the sentiments of Bank of England governor Mark Carney in that he believes “we will wind up having quite high expectations from a safety and soundness and regulatory standpoint if they do decide to go forward with something.”
Turmoil over the leadership of the Brazilian Development Bank may pose challenges to cryptocurrency trials.
On June 18, Brazil’s National Bank for Economic and Social Development (BNDES) announced the election of Finance Director José Flavio Ferreira Ramos as its interim president.
Ramos will serve as the BNDES head until the inauguration of 38-year-old Gustavo Henrique Moreira Montezano, a former economist and the current deputy secretary of privatization and disinvestment.
Montezano’s appointment followed two meetings on June 17 between Brazilian President Jair Bolsonaro and the country’s minister of the economy and former economic advisor to Bolsonaro’s presidential campaign, Paulo Guedes. The meetings were held in response to the sudden departure of the bank’s now-former president, Joaquim Levy.
Levy submitted his letter of resignation on June 16 amid perceived tension between himself and President Bolsonaro.
Montezano closely tied to Bolsonaro government
Montezano embarked on a 17-year career in the finance industry prior to joining the Ministry of Economy. He is a former partner of BTG Pactual and the former chief operating officer at Engelhart Commodities Trading Partners.
Montezano is the son of the economist Roberto Montezano, who worked as a professor at the Instituto Brasileiro de Mercado de Capitais (IBMEC) for more than 30 years. Notably, during his tenure at IBMEC, Roberto Montezano had worked alongside Guedes.
Moreira Montezano has also known both President Bolsnaro and his family personally since childhood, having grown up in the same condominium as the president in Tijuca, Rio.
Tension between Levy and Bolsonaro
Levy’s resignation was prompted by Bolsonaro’s anger with the former president’s appointment of Marcos Barbosa Pinto to the position of director of BNDES Capital Markets — an entity that is responsible for managing a portfolio valued at more than 100 billion Brazilian real (roughly $26 billion).
Both Levy and Pinto had worked for the BNDES during the governments of Brazil’s former ruling party, the Workers’ Party (PT), which drew ire from the president. Pinto previously served as the chief of staff to Demian Fiocca during Luiz Inácio Lula da Silva’s government, while Levy served as finance minister during the second term of Dilma Rousseff’s presidency.
Brazilian media reported that Bolsonaro stated, "I'm already here with Levy. I told him, 'Quit this guy on Monday or I'll fire you without going through Paulo Guedes,’" adding that "suspicious people" could not hold office in his administration. Barbosa Pinto also delivered his letter of resignation on June 16.
Upon resignation, Levy offered praise to his former BNDES colleagues, commending those "who have collaborated with energy and seriousness to transform the bank, allowing it to respond fully to the new challenges of financing development, meeting the many needs of our population and confirming their vocation and long tradition of excellence and responsibility." Levy added his thanks to Guedes for his “invitation to serve the country” and wished him “success” in the government’s reforms.
The sudden resignations drew the criticism of the president of the Chamber of Deputies of Brazil, Rodrigo Maia. Maia described the government as coming to comprise a “crisis plant,” adding:
“This lawyer who was dismissed from the BNDES is one of the most understood cadres of social policy in Brazil. It is a shame that Brazil lost two quality paintings of Joaquim Levy and Marcos Pinto in the way they were removed."
BNDES to finance documentary using crypto
On June 3, Brazilian publication State of Sao Paulo reported that film producer Elo Company had participated in a proof of concept for the BNDESToken initiative. Elo Company is known for its involvement in the production of Alê Abreu’s Oscar-nominated “Boy and the World.”
BNDESToken is slated to comprise an ether-based stablecoin backed by the Brazilian real that the BNDES plans to use to finance the production of a documentary produced alongside Elo Company.
The project will see the development bank issue the tokens to fund purchases necessitated by the film, with the BNDES also facilitating the exchange of said tokens for fiat currency. The token will not be promoted and can only be issued or exchanged by the bank. The BNDES has been developing its cryptocurrency since 2018. Gladstone Arantes Jr., an IT manager who is working on the token’s development, recently stated:
"Instead of releasing the money to the client, the proposal is that we will release the token that can be used for all purchases provided for in the financing agreement."
Vanessa da Rocha Santos Almeida, another developer working on BNDESToken, has described the project as allowing “society to look at the transactions” made by the national development bank.
BNDES trials token issuance
The proof of concept saw Elo Company simulate the payment of four screenwriters, with Brazil’s National Cinema Agency (ANCINE) also participating in the project.
Sabrina Nudeliman, the president of Elo Company, stated that “when the accounts are questioned and more transparency is requested, the blockchain responds to this demand.” Nudeliman added, “With the blockchain platform, my vendor provides real-time accountability.”
Daniel Tonacci, an adviser to the board of ANCINE, also emphasized the efficiency savings made possible through the adoption of distributed ledger technology, stating:
“It's the Waze of public money, where we can track where it goes, where it fits, how fast it is.”
Brazilian institutions explore blockchain
On May 30, BNDES systems analyst Fabiano Mattos published an opinion piece praising the BNDES’ adoption of distributed ledger technology (DLT). Matto emphasized the security and transparency benefits of digital currencies, asserting that “blockchain would be the ideal solution to support BNDES disbursement.” He continued:
“This system would allow the whole operational track to be followed — including the financial details — from disbursement of the financing, to the client’s suppliers and other counterparties. Finally, those suppliers could exchange the token for fiat currency at BNDES. It is thus publicly and irrefutably possible for a citizen, and society as a whole, to monitor the disbursements of public money made by the BNDES — and also to see the impact of this action on the various actors of the Brazilian economy. BNDESToken would vastly improve the way we can measure effectiveness of BNDES funding.”
Mattos also noted that a number of Brazilian institutions are actively collaborating to explore potential applications for DLT, including the Institute of Technology and Society and the Government Blockchain Association. The BNDES analyst indicated that the management of land registries, intellectual property rights and centralized identity are among the governance processes for which blockchain technology is being explored.
Brazil reconsiders regulations
The increasing penetration of cryptocurrency into Brazilian society has prompted moves to develop a clear regulatory apparatus governing the country’s crypto sectors.
On May 30, Maia requested that a special commission be created to consider the current legislative framework pertaining to digital currencies in Brazil. Several weeks beforehand, the Brazilian Internal Revenue Service also published new tax guidance mandating that cryptocurrency transactions valued in excess of BRL$30,000 (approximately $7,600) be reported each month.
In March, the BNDES chose five blockchain startups to participate in its BNDES Garagem incubator program alongside 74 other emerging companies.
In Malta, new rules will require that all property rental contracts be registered on blockchain for security considerations.
Malta’s Prime Minister, Joseph Muscat said that the cabinet approved new regulations, which will be announced over the coming days, that require rent contracts be registered on a blockchain to protect them from tampering and ensure authorized access. Muscat said:
“We will now be showing people the added value of this technology through applying it to something which they will use in their daily lives. Such a contract cannot be tampered with and only those authorised will be able to access it. This shows how the digital transformation will affect their lives.”
Malta has established itself as a blockchain and digital currency-friendly country, and has become known as a “blockchain island.” In February, the Malta Financial Services Authority issued a consultation on cybersecurity, suggesting that the agency’s cybersecurity system should comply with international standards, including guidelines by the European Banking Authority.
Integration of blockchain technology into real estate-related processes has been gaining traction in recent months. Earlier in June, the Dubai Land Department and telecoms firm Etisalat signed a memorandum of understanding concerning real estate blockchain tech. Both parties aim to implement smart government standards and introduce paperless management and digital contracts for property transactions.
Last month, the Enterprise Ethereum Alliance (EEA) detailed several blockchain use cases relevant to the real estate industry in a report shared with Cointelegraph. The EEA believes that blockchain has the potential to shorten the process of recording and transferring properties while increasing transparency and making land registries trustless, among other issues.
A vacancy reveals that Facebook is searching for an “experienced analytics leader” to spearhead data science for its upcoming Calibra wallet.
According to the tech giant’s vacancy, it is looking for an “experienced analytics leader” who can use data to drive insights, shape the wallet’s future direction, and measure product success.
Understanding how users interact with the product and identifying opportunities is listed among the responsibilities. Leadership experience features among the minimum qualifications, along with at least eight years’ experience of quantitative analysis.
Describing the perfect candidate, Facebook said they would be “scrappy, results-focused and self-starting” — as well as passionate about delivering “financial services to the underserved around the globe.”
The vacancy also sheds some light on the company’s aspirations for Calibra, writing:
“The wallet will be the delivery vehicle for many financial services starting with personal payments, but expanding to online and offline commerce and eventually lending and personal financial management.”
Despite its ambitions to reach the unbanked, a Calibra spokesperson admitted on June 19 that the digital wallet will not be available in countries that have banned cryptocurrencies — affecting access to nations like India, one of Facebook’s largest markets.
Facebook’s project has also been experiencing pushback from players in the crypto world, with Ethereum co-founder Joseph Lubin dismissing it as a “centralized wolf in a decentralized sheep’s clothing.”
Kik’s claims that its Kin blockchain had exceeded ether and bitcoin in terms of daily activity are being questioned in a new Coin Metrics report.
The report focused on two assertions made by the company about its Kin blockchain and eponymous cryptocurrency.
Coin Metrics claims daily operations, the measurement Kik used to gauge activity on its blockchain, included a high number of account creations — but many of these accounts were being left empty. Although Kin did have a large number of on-chain payments, the report said it fell “well below other major blockchains” in terms of transfer value.
Kik had also questioned why the SEC was regarding the token as a security when “over 300,000 people earned and spent kin as a currency.” On this second claim, Coin Metrics said there have only been about 35,000 addresses holding more than 10,000 kin (worth roughly $0.23 at press time) at its peak. The report added:
“This is orders of magnitude less than other blockchains in our sample, which each have at least 1,000,000 addresses that hold at least $1.”
Coin Metrics concluded that multiple metrics showed that Kin was not more widely used than dominant chains such as BTC and ETH, writing:
“It is therefore critical to examine multiple factors, including the type and quality of usage, in order to get a full picture of the activity on kin or any blockchain.”
Last month, Kik launched a $5 million crypto campaign to fund a legal challenge against the SEC to gain regulatory clarity.
SWIFT will enable blockchain-based platforms to use its global payments innovation platform.
The Society for Worldwide Interbank Financial Telecommunications (SWIFT) will allow distributed ledger technology (DLT) firms to use its global payments innovation (GPI) platform, according to a recently published report.
In the report, SWIFT revealed that it will soon allow GPI payments on DLT-base platforms. The product will purportedly increase savings in reconciliations and boost the movement of collateral.
The announcement follows a proof-of-concept (PoC) of a new gateway to interlink trade and e-commerce platforms with GPI, which the organization launched in collaboration with enterprise blockchain platform R3 in January. The product is designed to connect various trade platforms to GPI members, allowing end-to-end payment tracking, payment authentication, and credit confirmation. CEO Gottfried Leibbrandt said at the time:
“Our new GPI platform is extremely interoperable and open, and we’ve always had links to other networks [...] we are announcing later today a Proof-of-Concept with R3 blockchain on trade, where you can initiate a payment on the trade platform, and then it goes into GPI. So we’re exploring interconnectivity with a lot of things.”
Previously, SWIFT carried out a blockchain-based shareholder e-voting PoC with major financial institutions, including Deutsche Bank, DBS, HSBC, Standard Chartered Bank, securities software provider SLI and the Singapore Exchange. The test aimed to establish whether DLT can simplify the management of shareholder meetings.
Additionally, the existing SWIFT network and infrastructure was used to access, test and validate the applicability of the technology.
Binance exchange lists two new stablecoin trading pairs USDSB/USDT and USDSB/USDS.
Derived from StableUSD, a stablecoin pegged 1:1 to the United States dollar and developed by crypto startup Stably, USDSB was issued on Binance’s BEP2 token standard in early June 2019. As previously announced, USDSB has become the first stablecoin to be launched on Binance Chain.
According to a blog post by Stably, Binance is also rolling out USDSB trading against Binance Сoin (BNB), Binance’s native ERC-20-based token. The firm added that they are planning to introduce more assets on Binance’s non-custodial trading platform Binance DEX “very soon in the near future.”
Created by Stably, USDS was issued by Nevada-chartered trust firm Prime Trust, which also represents the regulated administrator for USDS. The stablecoin was launched on February 1, 2019, to enable another stable crypto asset for investors as a way of preserving their wealth in dollars during periods of high price volatility. Following the launch, USDS trading went live on Binance on February 5.
Recently, a report suggested that U.S. citizens will have no trading options for a number of cryptocurrencies when Binance exchange becomes unavailable for them in September 2019.
Co-founder and CEO of major U.S.-based cryptocurrency exchange Coinbase Brian Armstrong attracted criticism after praising private crypto transactions.
In the aforementioned tweet, Armstrong notes that “a scalable, sufficiently decentralized, chain that supported private transactions by default (privacy coins) would be a game changer.” He then compares anonymous cryptocurrency transactions to cryptography on the web, pointing out that it is increasingly predominant. He also used messaging as an example:
“Same with messaging, end to end encryption started out fringe and is now the expected default.”
Armstrong also cited the recent news about the Electric Coin Company (ECC), the firm behind second-biggest anoncoin zcash (ZEC), intending to build a new scalable zcash blockchain as an example of privacy by default. In response, Luke Dashjr raised a question towards what he perceives to be an unclear stance on privacy on Coinbase’s part:
“Why does @Coinbase seem to blacklist people who might get their coins from certain sources, if you support privacy? I'm a bit confused...”
To which bitcoin core developer answered stating that — according to him — as long as it is possible to distinguish “dirty” coins, the exchange is forced to block them. Self-proclaimed bitcoin (BTC) maximalist Giacomo Zucco stepped in disagreeing:
“Complete nonsense. They can distinguish ‘privacy coins’ better than they can distinguish bitcoins from coinjoins. [...] If they are forced to blacklist CJs, they'll be forced to blacklist ‘privacy coins.’”
Then, when a different user asked whether Coinbase blocks CoinJoin transactions, Zucco claimed “Of course. And (the very few and low-anonymity set anyway) shielded Zcash txs.” According to a post published by the exchange in late November 2018, Coinbase does not fully support zcash shielded addresses:
“Initially, we will support deposits from both transparent and shielded addresses, but only support withdrawals to transparent addresses. In the future, we’ll explore support for withdrawals to shielded addresses in locations where it complies with local laws.”
As of press time, Coinbase, Giacomo Zucco and several representatives of zkSNACKs, the company behind CoinJoin-enabled BTC wallet Wasabi wallet, have not responded to Cointelegraph’s inquiry. As a consequence, it has not been confirmed whether Coinbase is blocking CoinJoined BTCs.
As Cointelegraph reported at the time, data provided by zkSNACKs CTO Adam Fiscor revealed at the end of April that mixed bitcoin transactions now represent 4.09% of the total after CoinJoins have risen by 300% in the space of nine months.
As a recent Cointelegraph analysis explains, bitcoin’s increasing anonymity is considered a threat to privacy-focused coins by some.
Data from Google Trends’ search analytics resource indicates that interest in ‘bitcoin’ is approaching a monthly high as of today, June 24.
According to the data, searches for bitcoin are continuing their ascent in the week after the unveiling of Facebook’s new cryptocurrency and blockchain-powered financial infrastructure project, Libra, even as searches for Libra itself have tapered off since June 18 — the date the white paper for the forthcoming token was published.
Google trends data for search terms ‘bitcoin’ vs. ‘libra.’ As of June 24 2019
As Cointelegraph noted yesterday, from a wider perspective, the number of Google searches for “bitcoin” remain only around 10% of what they were in 2017 — the year of the top coin’s historic bull run, which peaked at $20,000 in December of that year.
The resurgent public interest is seemingly correlated with the renewed bull market, with bitcoin is currently trading at $10,881, up almost 35% on the month, according to coin360 data.
By country, the top five nations currently googling bitcoin are Nigeria, South Africa, Austria, Switzerland and Ghana — as compared with Uruguay, Dominican Republic, Nicaragua, Albania and Panama for Libra.
As Cointelegraph noted yesterday, the fact that Google trends data for bitcoin remains well below its former peak apparently suggests that retail FOMO has not yet become a major driver of the coin’s renewed price momentum. Instead, several parameters indicate that institutional demand for bitcoin is increasing in lockstep, and that network fundamentals are hitting all-time-highs.
While high-profile industry figures such as Ethereum co-founder Joe Lubin have critiqued Libra over its lack of decentralization, researchers at top crypto exchange Binance, have proposed that the social media giant’s token could spark additional volume in the cryptocurrency space.
At press time, BTC/USD is consolidating under the $11,000 mark — up over 3% over the past 24 hours, according to Cointelegraph’s bitcoin price index.
The Mayer Multiple calculates that by the time of the 2020 block reward halving, BTC/USD should have reached $30,500.
Uploading fresh readings from his price forecasting tool, the ‘Mayer Multiple,’ the serial commentator and bitcoin proponent said that current trajectory should favor an end-of-year bitcoin price of $21,000.
The Mayer Multiple is a calculation achieved by dividing the current bitcoin price by its 200-day moving average. Currently at 2.09, the metric has only seen higher readings 14.79% of the time, meaning that a giant leap to $40,000, in particular, is unwarranted.
“...Very low probability of $40k in a few months,” Mayer summarized.
As Cointelegraph reported, bitcoin succeeded in retaking the $10,000 barrier late last week, only to go on past $11,000 within 24 hours.
The performance buoyed analysts, many of whom considered $10,000 to be a watershed moment. Investors waiting on the sidelines, they argued, would jump on board once five figures were reached, triggering a snowball upward price effect.
At press time Monday, markets were nonetheless taking a break from bullish movement, BTC/USD settling at around $10,850.
For the rest of the year and beyond, however, the Mayer Multiple considers moves through $15,000, $21,000 and then $30,500 to be probable. The first of these would nonetheless be “overvalued” should it hit in September, but thereafter, bitcoin would find its price niche.
June 2020 should trigger the $30,000+ bitcoin, roughly a month after the next block reward size halving event.
Cybersecurity firm ESET has detected what it describes as an unusual and persistent cryocurrency miner distributed for macOS and Windows since August 2018.
Cybersecurity firm ESET has detected what it describes as an unusual and persistent cryocurrency miner distributed for macOS and Windows since August 2018. The news was revealed in a report from ESET Research published on June 20.
According to ESET, the new malware, dubbed “LoudMiner,” uses virtualization software — VirtualBox on Windows and QEMU on macOS — to mine crypto on a Tiny Core Linux virtual machine, thus having the potential to infect computers across multiple operating systems.
The miner itself reportedly uses XMRig — an open-source software used for mining privacy-focused altcoin monero (XMR) — and a mining pool, thereby purportedly thwarting researchers’ attempts to retrace transactions.
The research revealed that for both macOS and windows, the miner operates within pirated applications, which are bundled together with virtualization software, a Linux image and additional files.
Upon download, LoudMiner is installed before the desired software itself, but conceals itself and only becomes persistent after reboot.
ESET notes that the miner targets applications whose purposes are related to audio production, which usually run on computers with robust processing power and where high CPU consumption — in this case caused by stealth crypto mining — might not strike users as suspicious.
Moreover, the attackers purportedly exploit the fact that such complex applications are usually complex and large in order to conceal their virtual machine images. The researchers add:
“The decision to use virtual machines instead of a leaner solution is quite remarkable and this is not something we routinely see.”
ESET has identified three strains of the miner targeted at macOS systems, and just one for Windows thus far.
As a warning to users, the researchers state that “obviously, the best advice to be protected against this kind of threat is to not download pirated copies of commercial software.”
Nonetheless, alongside high CPU consumption, they offer several hints to help users detect something might be awry, included trust popups from an unexpected, “additional” installer, or a new service added to the startup services list (Windows) or a new Launch Daemon (macOS).
Network connections to unusual domain names — due to scripts inside the virtual machine that contacting the C&C server to update the miner’s configuration — are another giveaway, the researchers add.
Yesterday, Cointelegraph published an in-depth report analyzing various malware deployments within the crypto industry, including for stealth crypto mining.
Max Keiser chastised the veteran gold bug after he appeared less than impressed with Bitcoin’s price performance.
Using Twitter as a platform, Keiser focused on gold enthusiasts after several claimed that despite its performance, bitcoin was still an inferior bet to the precious metal.
“It doesn't matter how high the price of Bitcoin rises unless you sell. Every buyer must eventually sell to realize any benefit from the rise,” he wrote Saturday.
“But therein lies the problem. Once hodlers decide to cash out, the price collapses, wiping out paper gains before they can be realized!”
Keiser did not accept his words, suggesting Schiff owed bitcoin a debt of gratitude for gold’s own gains. As Cointelegraph reported, a mixture of factors has seen gold make rapid progress in line with bitcoin in recent months.
“Where’s the gratitude, Peter? Bitcoin has given Gold a hard money halo; igniting interest in hard money again, driving the price of Gold higher,” Keiser responded.
In a further Twitter post, he added:
“The (bitcoin) community now has a greater understanding of money and monetary history than the Gold community. This ‘flippining’ is relatively recent, and it explains why Gold Bugs are struggling right now.”
Schiff faced further difficulties when he attempted to disprove bitcoin having intrinsic value. Long a favorite argument, he had touted it as a reason for gold’s superiority as far back as 2011, when he decried the idea of holding what he called “Bitcoms” because of a lack of liquidity.
Bitcoin since mushroomed in value, one commentator noted this week, while gold never broke out of its trading corridor.
“The only demand for Bitcoin comes from speculators,” Schiff further claimed this week, to which analyst Vijay Boyapati replied:
“The vast majority of gold's price is monetary premium, just like Bitcoin. Industrial use does not protect that premium in any way. The premium is based on suitability as a store of value where Bitcoin excels over even gold.”
Boyapati included a comparison of this ‘premium’ in gold, bitcoin and silver.
Yet Schiff was not alone in his lack of faith, with Roy Sebag, founder of precious metals custodian Goldmoney, also claiming bitcoin users did not have an argument over gold.
Schiff’s debate with ‘The Bitcoin Standard’ author, Saifedean Ammous, turned heads when it aired in May, the first in a series of high-stakes encounters for bitcoin proponents.
The luxe brand founded by former Lady Gaga creative director and Kanye West collaborator Matthew Williams is launching an IOTA-based pilot for supply chain transparency.
Alyx — the luxe fashion brand founded by erstwhile Lady Gaga creative director and Kanye West collaborator Matthew Williams — is launching an IOTA-based pilot for supply chain transparency. The news was reported by industry magazine Vogue Business on June 24.
Williams — who earned a 2016 LVMH Prize finalist nomination for his work at Alyx, and spearheaded brand partnerships with Moncler, Nike and Dior Men — has launched the blockchain pilot together with manufacturing giant Avery Dennison and London-based internet of things (IoT) software firm Evrythng.
As reported, IOTA is an IoT-focused distributed ledger technology firm, which has created an architecture dubbed “Tangle.” Unlike a blockchain, the Tangle protocol does not use “blocks” or mining, but is instead built upon a directed acyclic graph (DAG): a topologically ordered system in which different types of transactions run on different chains in the network simultaneously.
News of the pilot confirms earlier reports of a prospective collaboration between Alyx and IOTA.
For the pilot, nine Alyx pieces will reportedly feature a scannable QR-code that reveals the supply chain of the product — including the sourcing of its raw material, the garment’s place of manufacture, and shipping history.
Once Alyx suppliers have entered the relevant data, Evrything stores and uploads it onto the ledger, while Avery Dennison creates a digital ID tag for each unique garment, per the report.
While the pilot remains limited in its scope, Williams has reportedly told Vogue Business that his “north start goal” is to put the entire range of Alyx products onto the blockchain in a bid to promote transparency.
As Vogue Business notes, the fashion industry faces a considerable challenge bringing its supply chain data onto the blockchain given the wide array of materials and manufacturers that can be involved in the production of a unique garment.
Michael Colarossi — Avery Dennison’s vice president of innovation, product line management and sustainability — told the magazine that the key to making a blockchain solution scalable is to increase automation and to identify “the right nodes of the supply chain from where to pull data and then determining how to most efficiently extract that data.”
For Alyx, Williams told Vogue Business, blockchain implementation was relatively less complex, given the brand’s just four-year history and the fact that it produces 80% of its products with Italian suppliers who are committed to transparency. This latter point is important, the report notes, given that the system wholly depends on the accuracy of the input data.
This May, ConsenSys teamed up with French multinational luxury goods conglomerate LVMH and Microsoft to build a blockchain-powered platform that allows consumers to verify the authenticity of luxury products.
The Bank of International Settlements warns that financial services offered by big tech firms such as Facebook, Google and Amazon could create new risks for the banking sector.
The Bank of International Settlements (BIS) has warned that the financial services poised to be offered by big tech firms such as Facebook, Google and Amazon could generate new risks for the banking sector.
Hot on the heels of Facebook’s newly-announced cryptocurrency, Libra, the BIS said that while big tech firms’ foray into finance can bring efficiency gains and broaden financial inclusion, regulators must step up their action to mitigate the new and complex risks involved.
According to BIS, big tech firms’ extensive user base, access to user data and multi-faceted business models have the potential to rapidly change the financial services industry. Their low-cost structure business is highly scalable, and the network structure of widely-visited platforms can help promote financial inclusion in populations that remain underbanked, it notes.
Yet, the BIS warns, “the very features that bring benefits also have the potential to generate new risks and costs associated with market power.”
The BIS claims that big tech firms introduce both known — as well as new and unfamiliar — risks to the financial services landscape.
Among the established issues, it notes the risks to financial stability and consumer protection posed by tech giants that “have the potential to loom large very quickly as systemically relevant financial institutions” — thereby disrupting the traditional banking sector and existing structure of financial intermediation.
The report notes that such firms efficiently leverage a “data-network-activities loop” that could well accelerate the success of their entry into finance, yet this very business model raises new and unprecedented challenges for regulators — notably competition and data privacy issues.
Given that firms such as Facebook straddle traditional regulatory perimeters and national borders, the BIS calls for national and international coordination among authorities to “ensure a level playing field between big techs and banks.”
International reactions to Libra have thus far been mixed, including ambivalent remarks from the Chair of the United States Federal Reserve, and a statement from the chairman of the Russian State Duma Committee on Financial Markets that the token will not be legalized in Russia.
A rollercoaster weekend trading session saw BTC/USD retake levels not seen since March 2018.
Market visualization courtesy of Coin360
Data from Coin360 showed a slight correction kicking in for bitcoin on Monday, markets consolidating gains after a dramatic weekend.
BTC/USD had climbed as high as $11,230 in recent days, marking its best performance since early March 2018.
The action did not go unnoticed, with mainstream media titles appearing to struggle with explaining the return of a cryptocurrency they had previously announced all but dead.
Many quoted traditional finance sources who maintained that the current bull-run is doomed to fail and that bitcoin investors will ultimately lose everything in fiat terms.
“Don’t get fooled by the dead-cat bounce this year,” Whitney Tilson, founder of Empire Financial Research and a former hedge-fund manager said quoted by Bloomberg.
“Mark my words: A year from now, it will be a lot lower. This is a techno-libertarian pump-and-dump scheme that will end in ruin.”
Bitcoin’s weekly gains currently total just over 17%, while monthly returns are closer to 35%.
Bitcoin 7-day price chart. Source: Coin360
Altcoins fared somewhat worse as BTC/USD corrected, with many in the top twenty by market cap shedding 2-3% in the 24 hours to press time.
Ethereum (ETH) fell 3% to hit $306, while Ripple (XRP) was trading 5% lower at just over $0.45 per token. Bucking the trend was Tron (TRX), which gained 3.1% after the network saw the launch of its first stablecoin asset.
Ether 7-day price chart. Source: Coin360
The total cryptocurrency market cap is now comfortably above $300 billion, Bitcoin’s weekend moonshot further expanding its market dominance to more than 59%.
As Cointelegraph reported, multiple significant factors suggest the largest crytocurrency’s longer-term trajectory will take it far past previous all-time highs.
A Caucasian nation is on the path to digital transformation, and blockchain-powered identification system is one of its cornerstones.
Azerbaijan has been a hotbed for a series of ambitious fintech-related announcements over the past several months, as the nation’s authorities were apparently moving to implement a series of innovative technological solutions in banking and e-government systems.
Repeated statements by government representatives suggested that at least part of the program relied on blockchain infrastructure. Most recently, as Cointelegraph reported, the chairman of Azerbaijan’s State Customs Committee revealed plans to implement blockchain technology to build an online-accessible cargo transportation database. Earlier in May, a high-ranking official for the Central Bank of Azerbaijan (CBA), speaking at the Fintex summit in Baku, mentioned the forthcoming implementation of a “blockchain system and artificial intelligence in the banking sector.” How are these disparate elements supposed to work together, and what is the scope of these blockchain-based solutions’ intended uses?
The snippets of news about a massive government initiative involving blockchain technology being underway in Azerbaijan began to pop up here and there back in October 2018. Farid Osmanov, CBA’s chief information officer, first announced the five-year program for the digital transformation of the economy — including a partnership with IBM on a distributed ledger system to be used in the banking sector — at the Azerbaijan-Germany Business Forum on Energy and ICT. In November, chairman of the Azerbaijani Internet Forum, Osman Gunduz, told the press that a few other state agencies were on the course to implement distributed ledger-based solutions in areas such as housing, utilities and even the court system to facilitate record-keeping and notary services.
While it became clear from early statements that the pilot blockchain system was to be built in collaboration with IBM on Hyperledger Fabric, it was not until April 2019, when media reports began to surface, that a branch of another big-name technology firm — Lenovo Professional Services — was also involved in the project on the hardware side. With two major industry players on board, it became clear that a comprehensive state program is at work here.
Government services hit X-Road
According to Nijat Asadli, manager of Azerbaijan’s Digital Trade Hub (DTH), there are three main areas in which the government seeks to boost innovation by deploying digital infrastructure: the DTH itself, the e-Government portal and central bank operations. The DTH is an electronic public-private partnership platform designed to facilitate the development of e-commerce in Azerbaijan and the broader region. It connects a number of governmental agencies, banks and private companies to provide a range of domestic, international and electronic services for businesses and private citizens alike.
One of the solutions available on the DTH platform is called the Single Export Application. It allows local producers to obtain all the documentation they need to hit the international markets — including licenses, permissions, customs declarations and even to apply for a government export subsidy. Another unique service available through DTL, Asadli told Cointelegraph, is electronic and mobile residency:
“Azerbaijan is the second country in the World after Estonia to offer electronic residency and first ever to offer a mobile residency. This service allows non-residents to establish a company online within a day in Azerbaijan and use all of the e-Services in the country. All they require is a smart phone — and they can start a location-independent business in Azerbaijan.”
The e-Government portal, integrated with all the user-facing government organizations, provides online access to more than 400 additional governmental services.
It has to be noted that both the DTH and the e-Government portal are built on open-source X-Road technology, a data exchange layer (DXL) solution that enables organizations to communicate over the internet and offer online services. Originally developed in Estonia in the early 2000s, X-Road underpins the Baltic country’s e-government infrastructure, as well as integration with neighboring Finland’s data exchange layer.
While X-Road developers describe it as a “distributed integration layer between information systems,” which led to speculations that it relies on blockchain technology internally, it is, in fact, not the case. As the Nordic Institute for Interoperability Solutions (NIIS), the organization responsible for developing the X-Road core, went on to explain, both blockchain and X-Road use cryptographic hash functions for linking data items to each other, otherwise they “serve very different purposes and use cases.” Each X-Road server maintains its own message log archive and stores it locally; other participants of the ecosystem, unlike the nodes on a distributed ledger network, do not have access to those archives.
Blockchain for digital identification
Right now, the only digital infrastructure initiative of the Azerbaijani government that relies on blockchain technology is the one that the nation’s central bank is overseeing. As the CBA’s chief information officer, Farid Osmanov, told Cointelegraph in an email, the government enacted a document in September 2018 entitled the State Program on Expansion of Digital Payments for 2018-2020 — a roadmap for coordinating technological advancements in digital banking. According to Osmanov:
“By implementing new financial technologies in the market, they believe they can boost the cashless economy and extend digital services, making them transparent and available for citizens.”
As a key condition to enable digital banking services, the program outlined a “private blockchain framework with trusted nodes, permissioned access and consensus services” for user identification.
The pilot project that the CBA embarked on to advance the goals of the state program has three prongs: the development of a strategic digital innovation plan, the creation of the blockchain-based digital identification system, and the deployment of the blockchain hardware. Lenovo was summoned to advance the latter goal in October 2018. According to Osmanov, the infrastructure that they put up relies on some of the company’s most innovative tech:
“The solution uses Lenovo ThinkAgile HX7820 Appliance software and hardware, which is the first 4-socket HX system installation in the world. The solution operates on the latest Intel Xeon Scalable processors from the Skylake generation and Acropolis OS from Nutanix is chosen as the virtualization platform. This solution is based on the RDMA technology, and this installation was the first in the world, where RDMA configured in productive environment.”
The open-source Hyperledger Fabric protocol, hosted by the Linux Foundation, serves as the software foundation for the identification system. Having used Hyperledger extensively to develop numerous corporate blockchains, IBM is now contributing expertise to the Azerbaijani government’s initiative. Its sponsors expect that the system will see full operational implementation by the end of 2019.
The main use of the prospective identification system will be in enabling citizens and businesses to deliver their personal data to banks and credit organizations in the form of digitally signed documents. Essentially, the blockchain system will automate the Know Your Customer (KYC) process, all the while dramatically decreasing processing time. The digital identification system will be incorporated into the e-Government system, and the open API architecture will allow banks to integrate it with their digital infrastructures through a standardized process.
Another remarkable efficiency that the system is expected to introduce will be a high level of user control over what data — and how much — they would like to share with financial organizations, Osmanov noted:
“Banks will have access to required personal data only after customer’s confirmation, so individuals and legal entities can personally control and authorize data sharing.”
The central bank’s CIO also mentioned that the authorities recognize the need for an improved legislative framework that comes with such massive technological developments. The CBA is already doing its research on international best practices and benchmarks, and is engaging with other state agencies in a conversation regarding regulatory improvements that the new system’s advent could evoke.
With the new digital identification system on the way, Azerbaijan is about to take its place among the ranks of countries that have implemented permissioned blockchain solutions to improve the efficiency of a certain aspect of government operations. The expansion of this effort might well see the state’s performance in other domains of record-keeping — like the customs database announced recently — benefit from the introduction of distributed ledger technology. Still, yet another adherent of the “blockchain before crypto” approach, the nation is only ready to go so far: According to a November 2018 statement by the CBA’s first chairman, issuing a state-backed digital currency is out of the question for Azerbaijan.
A closer look at the concept of sharding, what it is exactly and how it works.
What is the future of blockchain sharding?
Sharding gained more attention recently because of Facebook’s Libra coin.
Facebook recently released more details on the Libra coin in its white paper, which is planned for launch in the first half of 2020. It also emerged that Facebook acquired Chainspace, whose developer team was predominantly focused on blockchain sharding. This would suggest that the Libra blockchain will implement some form of blockchain partitioning.
In a more general sense, though, sharding could be the solution that solves blockchain’s trilemma.
In the blockchain trilemma, as described by Vitalik Buterin, co-founder of Ethereum, you can only ever maintain two out of the three blockchain core characteristics at the same time — namely, security, decentralization and scalability. That is because you will always have to compromise on at least one of these elements in order to have the other two.
As Beniamin Mincu — the CEO of the Elrond Network, a blockchain protocol focusing on scalability and interoperability — hinted at in a recent Forbes article, if the sharding challenges can be overcome, it will bring scalability to blockchains without compromising on decentralization or security. This, in turn, could bring blockchain one step closer to sustainable mainstream adoption. Mincu said:
“Sharding is complicated, but it provides the type of throughput capacity improvement that enables public blockchains to rival networks like VISA. Some of its challenges, though, include single-shard takeovers, cross-shard communication and data validity."
Who uses sharding?
Some blockchains have already implemented a sharding mechanism, while in others, it is still under development.
Zilliqa is the first public blockchain platform to have implemented sharding. It was able to achieve 2,828 TPS in its testnet.
The blockchain ecosystem Near allows developers to easily build and deploy decentralized applications. It also call itself “a sharded, developer-friendly, proof-of-stake blockchain” and state that its sharding technology allows nodes to stay small enough to run on simple cloud-hosted instances — potentially even mobile devices in the future.
Similar to Near, Ethereum provides a blockchain ecosystem for the implementation of smart contract-based, DApps. The Ethereum Foundation is planning to introduce sharding as part of its Ethereum 2.0 update, set for launch in January 2020, as confirmed on an Ethereum Foundation call on June 13, 2019.
Are there alternative solutions to sharding?
Two additional proposals have been suggested by developers to improve performance and transaction speed on blockchains.
The first is to increase the block size, with the basic thinking being that the bigger the block size, the more transactions you can fit into a block — and therefore, the higher the number of transactions per second will be. Although this is true, it also means that the bigger the block size is, the more computing power is needed to verify the block.
If block sizes were to be increased indefinitely, only the most specialized, highly powered computer equipment would be able to handle the required processing power needed to act as a node. The increased cost of this type of equipment would mean node pools would necessarily become smaller and more centralized, increasing the risk of a 51% attack. Increasing the block size would also require a hard fork, which risks splitting the community. If not everyone upgrades to the new blockchain, two separate chains will exist, using two separate coins. Because of these issues, increasing the block size is only a short-term solution.
The second proposal is to use altcoins so that different functions and different applications would run on their own chain with their own coin. This would increase performance because you don’t overload a single blockchain, but it will also increase security risks because all of the hashing power is now split over several blockchains. Again, this makes it much easier to hack the network, as the amount of hashing power needed to execute a successful 51% attack is much smaller. Therefore, it is not a viable solution.
Are there any drawbacks to sharding?
Currently, the main challenges of sharding relate to communication and security.
If you split a blockchain into isolated segments, each shard will appear as a separate blockchain network. Users and applications of one subdomain will not be able to communicate with users and applications of another subdomain, without the implementation of a special, intershard communication mechanism. This adds an additional layer of complication for developers to think about.
In a segmented blockchain, security also becomes a concern, as it is easier for hackers to take over a single shard due to the reduced hash power required to control individual segments, also known as a single-shard takeover attack or a 1% attack. Once a segment has been hacked, the attackers can potentially submit invalid transactions to the main network, or it is possible for information in that specific segment to be invalidated and lost permanently. Ethereum’s proposed answer to this security risk is random sampling, where shard notaries are randomly appointed to different sections to verify block authentication.
What problem will sharding potentially solve?
Sharding is a potential solution to blockchain’s ongoing scalability issues.
As mentioned above, one of the biggest problems facing blockchain networks is the issue of scalability. The more popular a blockchain network becomes, the more users are initiating transactions, decentralized applications and other processes on the network.
Increased transaction activity places increased demand on nodes to verify transactions, and there’s a real threat that these blockchains could become clogged up (as seen on Ethereum during the CryptoKitties craze, when the game accounted for 11% of transactions on the network). If this happens, transaction speeds become painfully slow, which is not an ideal situation for long-term, sustainable blockchain adoption.
As explained above, if the blockchain is broken up into smaller segments, with teams of nodes assigned responsibility to individual segments, every node won’t have to maintain the entire ledger to execute every operation. Transaction validation can, therefore, happen in parallel rather than in a linear fashion, increasing the speed of the entire network. It provides a solution to the scalability issues surrounding blockchain networks and therefore makes it more sustainable in the long term.
How does sharding work?
To explain sharding, let’s use the Ethereum blockchain as an example.
The Ethereum blockchain is made up of thousands of computers, aka nodes — currently 8,622, according to ethernodes.org — each lending a certain amount of hash power to the network. It is this hash power that allows the Ethereum Virtual Machine (EVM) to function — i.e., to execute smart contracts and run decentralized applications (DApps).
At the moment, Ethereum works on a sequential execution basis in which every single one of these nodes has to calculate every single operation and process every single transaction. A transaction passing through this verification process can, therefore, take a long time. Currently, Ethereum is hovering at around 10 transactions per second (TPS) — Visa, for comparison, does 24,000 TPS on average. Adding computers to the network will not necessarily improve efficiency, as the whole ledger is kept on every single computer and the chain of verification will just become longer.
With sharding, the idea is to move from a linear execution model, in which every node has to compute every operation, to a parallel execution model, in which nodes are assigned to process only certain computations. This will allow for multiple, parallel transaction processing at the same time.
The blockchain will be divided into separate shards (subdomains, or “buckets”). Nodes will only have to run the part of the ledger that they are assigned in order to execute processes and validate transactions, instead of maintaining the whole ledger all of the time.
What is sharding in terms of blockchain?
It is essentially the same process.
The blockchain network is the database with the nodes representing individual data servers. If we apply sharding to blockchain, this would mean breaking up the blockchain network into individual segments (or shards). Each shard would hold a unique set of smart contracts and account balances.
Nodes would then be assigned to individual shards to verify transactions and operations, instead of each being responsible for verifying every transaction on the entire network.
The idea is that, by breaking up the blockchain into more manageable segments, it should lead to increased throughput of transactions and therefore overcome the scalability issues faced by most of the major blockchains today. We’ll look at this in more detail a bit further down.
What is sharding?
Sharding is a form of database partitioning, also known as horizontal partitioning.
The process involves breaking up a very large database into smaller, more manageable segments, with the idea of improving performance and reducing the query response time.
Sharding is not a new concept and has been around in traditional, centralized database management since at least the late 1990s. The term was actually popularized by one of the first massively multiplayer online role-playing games (MMORPG), Ultima Online, in which developers split players across different servers (different “worlds” in the game) to cope with the traffic.
In business, a common example of sharding a large database is to break up the customer database into geographic locations. Customers in the same geographic locations are grouped together and placed on unique servers.
Ethereum co-founder Joseph Lubin said that Facebook’s Libra is “like a centralized wolf in a decentralized sheep’s clothing.”
The social media giant released the white paper for a its cryptocurrency dubbed Libra earlier this month to mixed reviews from experts in the cryptocurrency and blockchain industries and concern from government regulators.
In his article, Lubin notes that Libra’s white paper describes feelings common among many in the cryptocurrency community. It states that “sending money across the globe should be as simple and inexpensive as sending a message on your phone,” and “financial infrastructure should be globally inclusive and governed as a public good.”
While noting the white paper’s claim that “People will increasingly trust decentralized forms of governance,” Lubin pointed out the need for users to trust Libra’s fiat currency and government bond backing, and merchants to trust that the network be responsibly run. Furthermore, Lubin also noted its centralized infrastructure:
“Perhaps most importantly, it requires our trust that Libra will eventually transition to a more ‘permissionless,’ decentralized system, whereby anyone can validate the network, rather than the restrictive member evaluation criteria keeping control in the hands of the initial 28 firms.”
Still, Lubin admits that he sees some good in the project. He says that in a few years there could be two billion Libra users, and cryptocurrency user experience (UX) could be vastly improved in the process:
“In one fell swoop, talented UX designers could reduce the current friction of using cryptocurrency. Managing private keys, understanding ‘gas payments,’ and installing crypto browser plugins could be as simple as pressing ‘send’ in WhatsApp, another Facebook-owned entity.”
Lubin also claims that developers at Ethereum-centric development company ConsenSys already analyzed the code and noticed that the project borrows a lot of ideas from Ethereum. Lastly, he notes that he expects Libra to be well-executed from a technical point of view.
Craig Wright has failed to disclose his bitcoin holdings in a high profile court case, says a plaintiff’s legal counsel.
The legal counsel for a plaintiff in a bitcoin (BTC) theft case involving Australian computer scientist Craig Wright, said that Wright — the defendant — failed to disclose his bitcoin holdings per court order. Devin Freedman of law firm Boies Schiller Flexner made his statements in a tweet on June 21.
As Cointelegraph previously reported, in May a United States court ordered Wright to produce a list of his public bitcoin addresses as of Dec. 31, 2013. Freedman declared that, since he has not complied, “he remains under an order to show cause why [Judge Florina] Reinhart shouldn’t issue sanctions” and order him to appear before Judge Beth Bloom and “explain why he shouldn’t be held in contempt.”
Kleinman’s estate brought the case to court in February 2018, claiming that Wright stole hundreds of thousands of BTC worth over $5 billion following Kleiman’s death. The estate claims that Kleiman’s friends and family were unaware of the wealth he had accumulated and that Wright “forged a series of contracts that purported to transfer Dave’s assets to Craig and/or companies controlled by him. Craig backdated these contracts and forged Dave’s signature on them.”
Earlier this month, Wright was ordered to appear personally at mediation to address the accusations against him, after having requested permission to appear by video conference, arguing that physically attending the courtroom would have caused him “unjustifiable hardship.”
In May, Wright filed a copyright claim with the U.S. Patent and Trademark Office to a part of bitcoin’s code and its white paper, but its legal weight is disputed.
The QuadrigaCX story gets weirder, and Satoshi Nakamoto is apparently the author of a coloring book.
Coming every Sunday, the Hodler’s Digest will help you track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions, and much more — a week on Cointelegraph in one link.
Top Stories This Week
Bitcoin crossed $11,000 in under 24 hours after breaking the important level of $10,000 on Friday, ETH hit a 10-month high, while crypto markets see solid green by the end of the week. Cointelegraph explores the main factors driving the rally this time, and why they are very different than they were in late 2017. Thus, bitcoin futures show growing signs of institutional interest, Bitcoin’s hash rate hit a new all-time high at over 65,000,000 TH/s, the planned Bitcoin block reward halving set for May 2020 is still 333 days away, while the overall microeconomic picture sees investors dumping ever-depreciating fiat currencies for hard-capped “digital gold.”
Facebook released the white paper this week for its long-awaited, highly secretive cryptocurrency and blockchain-based infrastructure. The global stablecoin, dubbed “libra,” will operate on the native and scalable Libra blockchain and be backed by a reserve of assets that will give the coin intrinsic value as well as mitigate volatility fluctuations. Facebook’s new crypto will be governed by a Swiss-based not-for-profit consortium called the Libra Association, which already has Mastercard, PayPal, Visa, Stripe, eBay, Coinbase, Andreessen Horowitz and Uber among its founding members. The association will have around 100 members in total, each with a $10 million investment securing the entity one vote on the Libra council.
MoneyGram, a major money transmission network, has partnered with blockchain-based payments firm Ripple in order to work on cross-border payments and foreign exchange settlements with digital assets. According to their two-year agreement, MoneyGram will be able to draw as much as $50 million from Ripple in exchange for equity and will reportedly use Ripple’s xRapid liquidity product. By using Ripple’s XRP token, the process of sending money in one currency to be instantly settled in the destination currency will be faster than with fiat or other digital assets. According to MoneyGram’s chairman and CEO, Alex Holmes, the ability to instantly settle funds in this manner could “dramatically streamline our global liquidity management.”
Big Four auditing firm PwC released a cryptocurrency auditing software solution this week. The tool, which has been added to the PwC Halo auditing suite, can be used to “provide assurance services for entities engaging in cryptocurrency transactions.” According to PwC, the Halo suite will allow for the provision of independent evidence of private-public key pairing, as well as the gathering of information about transactions and balances from blockchains. The new addition will support a variety of cryptocurrencies, including bitcoin (BTC), bitcoin cash (BCH), ether (ETH) and XRP. PwC noted that the tool is already employed to support the audits of its clients that work with cryptos, but that its ability to audit is influenced by a client’s control environment.
According to a new report from EY, the deceased owner of now-defunct Canadian crypto exchange QuadrigaCX, Gerald Cotten, had been transferring users funds off the exchange in order to use them as securities for his own personal margin trading on other platforms. The EY’s fifth report to the Supreme Court of Nova Scotia outlined the principal concerns, including that its operations were “significantly flawed from a financial reporting and operational control perspective.” According to the report, there was neither segregation between duties and basic internal controls, nor was there any delineation between Quadriga’s and user funds. As well, EY noted that Cotten had reportedly created fake “identified” accounts on the platform under multiple alias in order to trade within the platform.
The Amazon bookstore has recently seen the appearance of two different books published under Satoshi Nakamoto’s name. According to the listings, both of the books — “Wave and Ripple Design Book” and “The Official Bitcoin Coloring Book” — are scheduled for release on June 28. The author’s profile claims that he is the same Nakamoto who created bitcoin (BTC) — “Satoshi Nakamoto is the renowned inventor of Bitcoin” — and states that “100% of his book royalties to support STEM and environmental education programs serving underprivileged youth.” Public reviews for the coloring book includes those from “Etheorum” creator “Vitallike Buttering,” “Diamond James, CEO, J.P. Morgain,” and “Buffet Warden, billionaire investor and Chairman of the Bored, Blandshire Haffling,” obvious joking misspellings of famous crypto personalities.
Winners and Losers
The crypto markets have seen a breaking raise on Friday, with bitcoin trading at $10,876 at the end of the week, ether at $311, XRP at $0.49. Total market cap is at $328,344,521,913.
The top three altcoin gainers of the week are electrumdark, Jiyo [OLD] and BBSCoin. The top three altcoin losers of the week are provoco token, eBoost and ivy.
For more info on crypto prices, make sure to read Cointelegraph’s market analysis.
Most Memorable Quotations
“It’s fresh, it’s speculative; at Amazon, we don’t really deal with the speculative, in the now.”
- Patrick Gaulthier, vice president of Amazon Pay, about crypto.
"If we are talking about a national currency that works as a whole in the country — that is, not about private assets — of course, this requires the technology to provide reliability and continuity. Technologies must be mature, including distributed ledger technologies.”
- Elvira Nabiullina, head of the Bank of Russia.
“Even if we offer similar services in the future it will still be for the better, since there will be more competition in the finance industry.”
“Given the company’s troubled past, I am requesting that Facebook agree to a moratorium on any movement forward on developing a cryptocurrency until Congress and regulators have the opportunity to examine these issues and take action.”
- Rep. Maxine Waters, chairwoman of the U.S. House of Representatives’ Financial Services Committee.
“We have to make sure that there is no risk for the consumer, it is our role as a state to protect consumers. [...] It will allow Facebook to accumulate millions and millions of data again, which strengthens me in my belief that it is necessary to regulate the digital giants, to make sure that they do not end up in monopolistic situations.”
- Bruno Le Maire, France’s minister of the economy and finance.
“There has begun a shift away from general purpose language for uses in smart contracts, where we really want to begin to model and represent the legal definition and the market rules. Many of these early languages put all the data out there and then attempted to express financial services entitlements by either imposing confidentiality on it or obfuscation.”
- Kelly Mathieson, head of enterprise solutions at Digital Asset.
“The idea of digital money and the idea of digital gold — and something that you trust because it's math and not people — just made a lot of sense to me.”
- Ben Mezrich, author of “Bitcoin Billionaires,” a book about the Winllevoss twins.
Prediction of the Week
Tom Lee, the co-founder of Fundstrat Global Advisors, said this week that bitcoin has the potential to easily reach new highs. In comments to CNBC, Lee noted that bitcoin is becoming the reserve currency of the crypto space, adding, “I think bitcoin is easily going to take out its all-time highs.” According to Lee, bitcoin has been worth over $9,000 for only 4% of its history. In tandem with his price predictions, Lee commented that Facebook’s Libra project is a reflection of mainstream interest that destroys the argument of believing in blockchain, but not in bitcoin.
FUD of the Week
The United States Commodity Futures Trading Commission (CFTC) brought an action this week against a reportedly fraudulent $147 million bitcoin scheme. The complaint has been filed with the New York Southern District Court against now-defunct United Kingdom-based entity Control-Finance Ltd, stating that the entity defrauded more than 1,000 investor to launder at least 22,858 bitcoins. The CFTC also included the head of the entity, Benjamin Reynolds, in the complaint, stating that both he and the company “exploited public enthusiasm for Bitcoin” from May 1, 2017 to Oct. 31, 2017. The alleged scammers operated by soliciting investors to buy their bitcoin with cash, then sending the new clients BTC deposits to other customers, misrepresenting those as actual profits generated from crypto trading.
Firefox’s recent zero-day security flaw was used in attacks against major crypto exchange and wallet service Coinbase. According to Coinbase security researcher Philip Martin, the reportedly critical zero-day vulnerability in Mozilla’s Firefox web browser had actually emerged along with another zero-day flaw that targeted Coinbase employees, meaning that there were two separate Firefox zero-day attacks. Martin noticed that Coinbase was not the only crypto-related firm to be targeted in the campaign, and that it was working to report other businesses that it believes were also targeted by the attack. Martin underlined in the tweet that the company’s security team has seen “no evidence” that the exploit targeted Coinbase customers.
The United States Department of Justice (DoJ) unsealed a fraud complaint this week against Swedish citizen Roger Nils-Jonas Karlsson and associated firm Eastern Metal Securities (EMS). According to the DoJ’s complaint, Karlsson and EMA are charged with committing securities fraud, wire fraud and money laundering. The EMS website was reportedly registered to a made-up person and offered shares of a pension plan that would pay out in gold per share, with investors asked to pay in cryptocurrencies. However, Karlsson reportedly didn’t have the capital to back the payouts and invested the money in Thailand-based real estate. According to the complaint, Karlsson was arrested in Thailand on June 18, and the U.S. is requesting his extradition.
Best Cointelegraph Features
It’s 2019 and hacks of cryptocurrency exchanges keep on coming. Cointelegraph looks at not only the amount that has been stolen, but also the security measures, insurance and improvements in the works.
With several recent reveals of the technology behind messaging giant Telegram’s upcoming blockchain network launch, Cointelegraph took a deep dive into the technical aspects of the $1.7 billion project.
Cointelegraph had the chance this week to speak to Ben Mezrich, the author behind the book that spawned the film “The Social Network,” about his new bitcoin-focused book on the rise of the Winklevoss twins’ bitcoin fame. A book review of the new crypto success story accompanies the interview, for those whose interest has been piqued.
Two Israeli brothers have reportedly been arrested for phishing attacks and a successful hack of cryptocurrency exchange Bitfinex.
Two Israeli brothers have been arrested in connection with the hack of cryptocurrency exchange Bitfinex and other crypto-related phishing attacks, finance news outlet Finance Magnates reports on June 23.
An Israeli police spokesperson reportedly told Finance Magnates that Eli Gigi and his younger brother Assaf Gigi netted tens of millions of dollars. The two are suspected of being responsible for long-term systematic theft of cryptocurrencies by maliciously obtaining access to other users’ accounts.
The two allegedly created credential-stealing clones of major online cryptocurrency exchanges and wallets and sent links to those phishing sites on Telegram groups and other cryptocurrency-related communities. The two are also accused of being responsible for the 2016 Bitfinex hack, which saw multiple accounts being compromised.
As Cointelegraph reported at the beginning of June, the funds stolen in the attack above have been recently moved.
The police noted that the alleged victims were mostly based out of the European Union and the United States, which resulted in the matter being investigated by multiple law enforcement agencies in several countries.
During the raid, the police reportedly found a cryptocurrency wallet containing significantly less funds than the amount that the two are believed to have stolen. Finance Magnates also notes that Eli Gigi is a graduate of an elite technological unit of the Israel Defence Forces that selects youth with outstanding academic capabilities.
As Cointelegraph reported earlier this week, a recent Firefox zero-day security flaw was used in attacks against major crypto exchange and wallet service Coinbase. The flaw was purportedly merged with another zero-day flaw targeting Coinbase employees, meaning that there were two separate attacks.
While Coinbase was affected, the exchange’s security researcher Philip Martin stated that Coinbase was not the only crypto-related company targeted in the campaign and that there was no evidence of the campaign targeting exchange customers.
Microsoft and Ethereum Foundation Swell the Hyperledger Ranks Amid Growing Cross-Industry Blockchain Collaboration-
Microsoft, the Ethereum Foundation and Salesforce join Hyperledger as new members, seeking to create open-source enterprise blockchain solutions.
United States tech giant Microsoft and the Ethereum Foundation are among the latest companies to join the ranks of the Hyperledger greenhouse hosted by the Linux Foundation. Many notable names in the tech and wider business fields today are developing enterprise-grade solutions based on the expanding set of tools built on Hyperledger.
These institutional blockchain projects cut across both financial and nonfinancial distributed ledger technology (DLT) utilization. Presently, there are pilot projects geared toward identification systems, supply chain management (SCM) and provenance, to mention a few.
On the whole, members of Hyperledger appear to be at the forefront of a renaissance in open-source project development, facilitating a more decentralized approach to project building. Such a trend evinces a return to a more decentralized internet with blockchain technology living up to the hype of being a disruptor of the global business process.
There are, however, some drawbacks to the emerging open-source project building trend, especially for startups that have yet to earn significant pedigree within the industry. Also, while DLT constitutes a technological breakthrough, kinks such as scaling need to be worked out before DLT-based systems can realistically upstage their mainstream centralized counterparts.
New members join Hyperledger
Microsoft, Salesforce and the Ethereum Foundation are among eight new members of Hyperledger, as announced on June 18. These companies already have a history of blockchain adoption, with several DLT-based projects across diverse business processes.
There are now more than 270 members of Hyperledger developing their own enterprise-grade blockchain solutions. Commenting on the collaboration with Hyperledger, Marley Gray, Microsoft’s principal blockchain engineering architect, declared:
“Our journey in the blockchain ecosystem has brought us a long way, and now is the time for us to join the Hyperledger community. We are proud of our contributions to such a diverse blockchain ecosystem, from our Azure service offerings and developer toolkits to our leadership in driving open specifications.”
Microsoft is by no means a new entrant to the blockchain arena, with the company already developing an ecosystem for blockchain as a service (BaaS) on the Azure cloud computing service.
In the BaaS arena, Azure competes with other offerings by the likes of Oracle and AWS. These platforms allow businesses to create bespoke DLT-frameworks to fit their operating purposes without having to navigate the skill, knowledge and cost barriers associated with building decentralized apps (DApps) from scratch.
Teams working on the Azure BaaS infrastructure get access to preconfigured modular networks that simplify the process from conception to deployment of their DLT-based solutions. By joining Hyperledger, Microsoft Azure now offers three different enterprise blockchain development environments, with the other two being Corda and Ethereum.
The Ethereum Foundation joins the Ethereum Enterprise Alliance (EEA) as a partner of Hyperledger. For Hyperledger CEO Brian Behlendorf, the decision of the Ethereum Foundation to join the expanding Hyperledger enterprise blockchain greenhouse will be a positive one for blockchain developers in the industry.
Data from StateOfTheDApps — a platform that tracks decentralized apps — shows that Ethereum hosts the highest number of DApps. Of the total 2,667 DApps tracked by the platform, 2,505 run on the Ethereum blockchain.
Apart from the newly announced members, others include notable tech giants like IBM and Oracle. IBM, Walmart and Alibaba are among the companies with a significantly high number of blockchain-based patents, which is indicative of their activity in research and development (R&D) efforts in DLT-related enterprises.
Hyperledger projects supporting enterprise blockchain development
Hyperledger, for its part, is a collaboration between enterprises and the open-source community facilitated by the Linux Foundation. The Hyperledger greenhouse acts as a bridge that connects developers, nonprofit organizations, academia and all other stakeholders interested in developing and implementing enterprise-grade blockchain technology solutions.
Cointelegraph spoke with Marta Piekarska, director of the Hyperledger ecosystem at the Linux Foundation, about how the partnership works. According to Piekarska, Hyperledger doesn’t develop code or provide consulting services. Explaining further, Piekarska said:
“We support them in terms of PR and marketing for their projects. Not all of the developers creating solutions using Hyperledger tools are members of Hyperledger. You don’t have to be a Hyperledger member to use our technology, participate in our special interest groups, or to download and use the code. There is no technological barrier to using Hyperledger frameworks and tools.”
There are numerous projects around the world based on specific Hyperledger frameworks, such as Hyperledger Fabric and Hyperledger Iroha, to mention a few. Back in May 2019, Cointelegraph reported on the partnership between Iran’s central bank and Tehran-based blockchain firm Areatak to create a DLT platform for the country’s banking and finance markets using Hyperledger Fabric. According to the report, the Borna blockchain platform, when fully realized, should help revamp Iran’s outdated banking sector.
Matt Milligan of Milligan Partners — a blockchain-based startup focusing on toll interoperability and one of the newest members of Hyperledger — highlighted the benefits of joining a vast collaborative effort like Hyperledger. Milligan, the managing partner at the company, said:
“Joining Hyperledger is tremendously valuable to us as we develop blockchain solutions for Mobility as a Service. By working in this diverse open source community, we can be more creative and more innovative than we could ever be on our own.”
The fact that Hyperledger is open-source, means developers can learn from one another, trading ideas in an environment increasingly being populated by teams working on cutting-edge DLT protocols. This collaboration serves to achieve Hyperledger’s aim of fostering cross-industry blockchain development.
By so doing, stakeholders at Hyperledger are hoping that blockchain technology can move away from the realm of being a marketing buzzword to more tangible utility cases. In an interview during the Brainstorm 2019 conference organized by Fortune, Ripple CEO Brad Garlinghouse drew attention to the existence of too many economically inviable projects with the term “blockchain” slapped on them. According to Garlinghouse, “There is a lot of noise in the blockchain industry.”
Focus on nonfinancial DLT utilization
Apart from financial products, many of the blockchain protocols being built using Hyperledger tools involve nonfinancial use cases. This trend reinforces the narrative that DLT is a disruptive technology capable of affecting several facets of the global business process.
From a nonfinancial perspective, blockchain technology seems to be getting a great deal of adoption in protocols that require trust networks and provenance. Together, these two broad application cases cover much of the mainstream business arena — from SCM to health care and identity management.
Cointelegraph asked Piekarska about the major nonfinancial enterprise blockchain solutions being developed using the different Hyperledger framework tools, to which the director responded:
“There are quite a few markets that we are seeing as very big and potential markets. We are currently seeing a lot of interest in blockchain technology from stakeholders in supply chain management. We have the food trust project for IBM and Maersk. We have Everledger which is a blockchain project based on Hyperledger Fabric to track the provenance of diamonds and now also wine. There are at least 200 live networks based on Hyperledger Fabric alone. Digital identity is another space where we see a lot of interest. This is mostly as a result of Hyperledger Indy which is our framework for building digital identity solutions using zero-knowledge proofs. One of the main contributors here is Sovereign Foundation. They have the largest running network that is based on Hyperledger Indy.”
Right here for the taking
The combination of immutable data record-keeping and the ability to create trustless networks that do not require expensive third-party authenticators continues to be a pivotal aspect of the blockchain appeal. However, these projects still need to scale for them to be able to provide robust functionality on enterprise-level protocols.
Blockchain technology also seems to be having a material impact on open-source project development for both notable tech firms and smaller startups. According to Piekarska, there has been a noticeable increase in the number of projects listed on GitHub since the emergence of blockchain technology.
It isn’t inconceivable to imagine that DLT is creating easier avenues for open-source collaboration among development teams across the globe. Piekarska said:
“I think the coming of blockchain has caused a renaissance in open source project development especially for enterprise-grade software. It is changing the way enterprises see open-source project development which is reflected in the influx of notable tech giants like IBM and Microsoft into the Hyperledger environment. All projects in Hyperledger are under Apache license. It also lowers the barriers for small companies that can now take the code and build useful protocols.”