Daily Archives: October 14, 2018

Central Bank of Zambia Declares Crypto Is Not Legal Tender Amid Hyperinflation Crisis

The Central Bank of Zambia responsible for the issuing the Kwacha (ZMW) fiat currency, has declared that Bitcoin and crypto, in general, are not legal tender. Other warnings about the risks of crypto are also included in this official declaration. This announcement comes at a time of worsening hyperinflation in Zambia, the ZMW has devalued 18% through August and September 2018, well above the hyperinflation threshold.

The Bank of Zambia specifically says “While cryptocurrencies have some monetary characteristics, such as being used as a means of payment on a person to person basis, cryptocurrencies are not legal tender in Zambia.” The Bank of Zambia goes on to clarify that they have not issued any state-backed cryptocurrency, and therefore no cryptocurrencies are legal tender.

While it is obvious that the Bank of Zambia does not approve of cryptocurrency based on this statement, this proclamation has no implications for crypto users in Zambia. The Bank of Zambia has no regulatory authority over crypto, and they don’t intend to regulate crypto. They say “Bank of Zambia does not oversee, supervise nor regulate the cryptocurrency landscape. Consequently, any and all activities related to the buying, trading or usage of cryptocurrencies are performed at the owner’s risk.”

The Bank of Zambia goes on to describe the possible risks associated with crypto as money laundering, terrorism, fraud, and hacking. To be fair, those are problems that fiat currency has too, and any form of money. However, with crypto, the Bank of Zambia warns that there would be no legal recourse for anyone who gets hurt when dealing with them since it’s unregulated.

Overall, this is actually good news for Zambian crypto users, since the Bank of Zambia is saying there are no regulations. In many other countries, Central Banks and governments have regulated crypto heavily, but Zambia is taking a hands-off approach. Further, the Bank of Zambia says “In line with the Bank of Zambia’s position that regulation should not constrain but enable innovation, Bank of Zambia will continue to actively monitor all developments.”

The reason this statement is coming at this time is probably because of the worsening situation of hyperinflation in Zambia, with the ZMW declining 18% versus the USD in only the past 2 months. Zambia is no stranger to hyperinflation, in 2012 Zambia had to cut 3 zeros off of the ZMW since inflation had made smaller denomination fiat bank notes practically worthless.

As seen in other countries with hyperinflation, like Venezuela and Iran, people will choose to put their money in crypto as a safeguard, and the government does not like this since it generates capital outflows that accelerate the collapse of the local fiat. Zambian economist Chibamba Kanyama confirms the situation “Zambians have been desperate on profitable investment vehicles for lack of a liquid stock market. Others are seeking for high interest or high yield investment vehicles from across the country such as offshore accounts. This is because interest rates on savings from commercial banks are below the inflation rate. The crypto market is the latest one and seems to have attracted a number of investors, some of them civil servants and retirees seeking to reinvest their pensions.”

Overall, compared to other countries experiencing fiat hyperinflation, the Bank of Zambia is being quite gracious and not doing anything to stop crypto besides this cautionary statement which could raise some skepticism about crypto.

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BitcoinNews.com Daily Podcast 13th October 2018

Listen to the 13 October 2018 BitcoinNews.com Daily Podcast below.

On this edition of the BitcoinNews.com Daily Podcast, we discuss how 5 top universities have followed Yale’s lead and invested in crypto hedge funds, and how 1Broker has begun processing customer withdrawals after being shutdown by the United States. Hear about how Coinbase has added 0x, and how Coinbase has shutdown their crypto index fund.

Follow the Bitcoin News Daily Podcast on AnchoriTunesSpotifyGoogle PodcastsStitcherRadio PublicPocket CastsOvercastCastbox, and Breaker. We broadcast a new episode every day, covering the most important topics in the crypto, Bitcoin, and blockchain world!

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Closing Charities’ Accountability Gap Through Blockchain Technology

Humanitarian Blockchain

a BitcoinNews.com series

   Part 3: Closing Charities’ Accountability Gap Through Blockchain Technology

          Welcome to the third installment of the Bitcoin News Humanitarian Blockchain Series. Charity begins at home, but the growing question being asked over the past few years is, where does it actually go?  We try to highlight some of the current solutions being presented by blockchain technology to this essential industry

The track record of the charity industry has been, regrettably, far from exemplary, and in some instances, at worst, disgraceful. Well-publicized scandals over the past few years have seen a decline in the public donations to charitable organizations, with some of those intuitions being brought into disrepute by misappropriation of public funds or inappropriate behavior of field staff.

Even now, a US investigation is looking into fraudulent identity activity in Myanmar where refugees fingerprints from amongst the Chin minority are causing confusion as fraudsters purchase refugees’ identities for their own ends. Also, in Bangladesh many Rohingya refugees in safe-harbor there have been registered multiple times and records of family groups have been almost non-existent,

Using Blockchain to clean up the industry is possibly the only way that many charitable institutions can survive, and regain public trust by demonstrating a greater level of transparency and accountability.

The main barriers to success in the humanitarian field have been lowering the impact of administration, transportation and documentation cost on donated funds, and making every aspect of donations totally transparent from source to final delivery of the benefit to the recipient.

Charities have been slow to take up the obvious benefits that can be offered to the industry. In fact, it is no exaggeration to suggest that there could be no more obvious and beneficial use case for DLT than its solution to the accountability problems that charities are currently suffering.

Luckily some organizations are on board, but far too few. The World Food Programme (WFP) has been quick to realise the potential of blockchain solutions. As Bitcoin News reported in the first of its humanitarian series, the uses in Jordan’s refugee camps has been essential, in not only feeding and providing work for Syrian refugees but also creating a renewed feeling of self-worth, particularly against female escapees from the war in Syria.

Former UN Secretary General Ban Ki-Moon, as far back as 2011, was trying to deal with how to get donated funds from a source. At the time, a massive $40 billion was failing to reach its intended recipients, the money was diverted to corrupt officials and middlemen. Seven years on, the blockchain is now being used by the WFP to tackle this problem. Gustav Stromfelt, one of the project managers working on the WFP’s program commented:

“We have this rapid ability to understand where our money is throughout the process…It improves transparency, accountability, and communication across the board.”

This UN-supported programme in Jordan uses dollars at this stage, not cryptocurrency, but through DLT every cent is accounted for right up to the purchase and delivery of physical goods.

Charities accepting cryptocurrencies, and there have been many, were badly hit by the drop in the value of Bitcoin at the end of 2017 and much of the funds were seriously diminished before funds could be dispersed. Silicon Valley Community Foundation revealed in its 2017 audit 45% of its investment assets were unable to be turned into cash in 2018 due to government restrictions.

Many of these problems are now being overcome through online mining schemes which benefit charities and straight crypto donations fund by such organisations as Children in Need and others.

Binance, the world’s largest cryptocurrency exchange by 24-hour trading volume, has recently tried to address some of these issues with the announcement of a Blockchain Charity Foundation which aims to plug the transparency gap for multiple organisations with its planned donation tracking system: Binance CEO Changpeng Zhao explains:

“Lack of transparency has been a problem for charities today. Some estimate up to 80% of donations does not reach the intended beneficiaries. With the ability to track every single transaction, blockchain technology seems tailor-made to solve this problem.”

Although the Blockchain Charity Foundation is still at concept stage, Binance suggest that the system will allow donors to give to one or as many chosen charities as they want whilst retaining anonymity if they wish: The company commented:

“Each BCF program will have its unique receiving address(es). BCF may choose to donate directly to the ultimate beneficiaries or work with other charity partners who then distributes the funds to the ultimate beneficiaries. Either way, the funds will be tracked in a transparent manner.”

Solutions to past problems are slowly being presented through new technology, but clearly, more urgency is required to reshape the face of the charity industry and restore public face so that charity can transit from home to its needy target and arrive at its destination intact, as was intended from the source.

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Miami is Fast Becoming a US Crypto Trendsetter

Florida staked its claim as a significant name in crypto as two pizzas delivered by Papa John’s in Jacksonville once cost the crypto equivalent of $65 million in today’s money, and now with Miami staking its claim as Bitcoin capital of the US, the dream lives on.

Miami is on a charge and has seen a surge of blockchain and crypto conferences setting up their annual venues there over the years. It’s unsurprising, given that there’s also a history there too, as it was not only the home of the first North American Bitcoin Conference but also witnessed the birth of Vitalik Buterin’s Ethereum experiment.

This year’s North American Bitcoin Conference heralded in even more startups, some 30 in number, raising millions, and now gives way to the next conference in the queue, Blockchain Shift to be held in late October bringing IBM, Tesla, KPMG, Bloomberg into its orbit. It promises to be another extravaganza with late-night dancing and yacht parties scheduled, living up to the current festival mode employed by crypto conference organizers.

Miami started the crypto ATM revolution, with machine provider BitStop out of Palmetto Bay now providing services for client all over the state and in California with a network of 50 transaction points.

One of Florida’s movers and shakers, George Levy, award-winning Lecturer and Senior Instructor on the blockchain, had a hand in starting Miami’s Blockchain Institute of Technology (BIT), an online training academy which teaches people more about cryptocurrency and its technological foundations. Levy now has students in 166 countries around the globe and follows up his online training with personal appearances in many of those. Lately, he’s taken the leap to South America, where Bitcoin raised early interest. He now works alongside the engineering department at the University of Curaçao.

“We’re seeing innovation coming out of Latin America, as well strong developers based in Argentina,” he says, adding that, “The fact that I’m here in Miami gives me a very close spot to be able to engage that. It’s a great hub.”

South Americans have viewed cryptocurrency as an escape from financial oppression for years, as exemplified by Bitcoin’s huge following in Venezuela where the fiat economy is a total burnout. Because of its Latin American connection, Miami has a renewed spark of life as a potential crypto hub for South America as a result of political unrest there, geographic proximity and Spanish speaking population.

With such a vibrant cryptocurrency ecosystem comes regulatory concerns, one of the motivations by State government’s June decision to appoint a “Cryptocurrency Chief” to oversee the industry, according to Florida’s chief financial officer Jimmy Patronis, an “…active, comprehensive and balanced approach” providing an “appropriate level of scrutiny for emerging digital asset technologies.”

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Research: Bitcoin as Stable as “Dollar and Oil”, Cites Cubic Law

New research published in a respected Journal of Nonlinear Science, suggests that cryptocurrencies could soon be as reliable as fiat currency.

Chaos has released a research report titled “Bitcoin market route to maturity?” which maintains that due to the maturing of digital assets over time, many commentators view that Bitcoin and similar cryptocurrencies are volatile, and therefore too unstable to be used as a currency, are largely unfounded.

The basis of many of these commentaries about Bitcoin’s instability stems from the massive price fluctuations of the past year, seeing the flagship cryptocurrency reach a high of almost $20K in December of 2017 only to drop to $6000 in June of 2018.

The report cites influences, not unlike those which effect regular fiat markets, as instrumental in some of the fluctuating fortunes of digital currencies, such as temporal correlations as multi-scaling effects. The authors of the study commented on the Bitcoin movement over time after studying a number of graphic representations:

“Initially, the graphs we got were a bit crooked, which did not augur anything promising … but when we took a closer look at the data, suddenly it turned out that this crookedness originated from the first two years of the analysed period, that is, from the time when the market was just starting to shape itself.” Adding, “Later on, the rates of return fluctuated according to the inverse cubic law.”

Cubic law is a system of judging a market’s maturity where financial analysts plot price changes in one-minute sequences and compare how they match up.

They added that Bitcoin’s maturity was “particularly evident in the last six months of the examined period,” suggesting that the digital currency’s fluctuations corresponded in the same way as rates of return as regular, mature markets, such as the stock, dollar, oil or bond markets; all good news for Bitcoin enthusiasts and cryptocurrency investors in general.

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IBM’s Food Trust Blockchain Goes Live, Carrefour Jumps in First

Multinational tech giant IBM has been leaving a significant imprint on the retail industry lately with the use of blockchain technology, and it’s doing again with the latest project, Food Trust.

IBM, not content with providing foodchain solutions for mega-retailer Walmart, has now hooked up with French supermarket giant Carrefour in order to launch blockchain based Food Trust, enabling the chain to price its products more accurately.

The recent IBM/Walmart project came up with a farm-to-store tracking system based on blockchain technology which Walmart committed 100 of its suppliers to adhere to. Both Walmart and IBM have been at the forefront of DLT since its conception and both companies are eager to promote the use of new technology in sectors including business and commerce. Walmart has become a primary mover in the industry in pushing blockchain forward with numerous patents pending.

The latest IBM deal with Carrefour, now operating in over 12,000 locations around the globe, offers three individual retailing solutions using DLT. The first of which, called “Trace” offers a sophisticated system of tracking products from source, which also factors in shipping and production costs, allowing the retailer to arrive at a fair price to pass on to customers.

Other aspects of Food Trust in its present early form focus establishes how goods fit retailers “Fair Trade” or “Organic” tags in order to be accurately listed on the blockchain, adding to buyer confidence.

Carrefour itself is no stranger to using emerging technologies in recent months and made a recent impact on the French farming sector this year with its blockchain based system which began tracking its chicken supply. This provided customers with an egg to table history by using a smartphone to scan a code on the packaging to obtain details on each stage of production, including origins, earlier location, feed and where the meat was finally processed.

Carrefour may be the first to use the latest IBM system, but now Food Trust is live and it’s there to be used by all in the food industry moving forward.

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Heat Your House Whilst Earning Using French Crypto-Heater

A French-based startup has come up with a unique idea which enables users to heat their homes whilst using the same energy to mine cryptocurrency.

Startup Qarnot has manufactured the QC 1 crypto-heater, one of two products using both heating and computer energy, which uses the heat generated by home computers to heat the surrounding area via a system of graphic plates.

The crypto-heater is advertised as the only one in the market to be perfectly noiseless with no embedded mobile parts (no fans, no hard drives) and IP-protected. Taking only 10 mins to set up, the heat of the QC-1 is generated by 2 graphics cards embedded in the device enabling the mining of cryptocurrencies or blockchain transactions, while it heats.

At 2,900 euros plus shipping, this heater doesn’t come cheap though. The unit is advertised as configured to mine Ethereum and has extra controls which allow the user to follow the crypto market, either through an LED readout on the heater or via a downloadable app. Heater owners are able to mine other cryptocurrencies through a GitHub link which will give them the necessary codes.

As for dual-usage household products, this time not designed on a commercial level, but more as a bi-product, Alabama IT worker Lee, gave up his graphics card that he was using for Bitcoin mining for his bathtub. This turned out to be a much better tool for the job. By using ambient air pulled into a system to cool his ASICs and heated air pushed through a water-to-air intercooler pumped through from his bathtub, he generated enough computer heated water to keep his mining habits up to par.

The only problem was, he generated bathwater of 122F/50C, so fearing for the life of his pets he decided to halt his bathtub mining activities.

“Imagine a crypto heated swimming pool or anything else you could heat with the output from a small, medium, or large-scale mining operation,” gta3uzi wrote on Reddit.

Some suggestions arising from his post included using the hot water to create a sauna, heating his home, drying one’s hair, and even cooking a steak sous vide.

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