Daily Archives: November 11, 2018

President of Venezuela: Petro Exchangeable for Other Cryptos Only If Purchased in 2018

The President of Venezuela, Nicolas Maduro, has said “Anyone who buys Petro before 31 December 2018 can convert it into any digital currency or international convertible currency”. This implicitly indicates that anyone who buys Petro after New Year’s Eve will not be able to exchange it, raising further doubts about the Petro’s existence.

All cryptocurrencies in existence can be traded for any other cryptocurrency or fiat currency if there is a willing buyer. Maduro is saying this will not be possible for people who buy the Petro ‘too late’. Further, if the Petro was a real cryptocurrency it would not be possible to stop people from trading it for other cryptocurrencies or fiat currencies. This announcement by Maduro is implicit proof that the Petro is not a cryptocurrency, while at the same time the announcement will make Venezuelan citizens who do not understand cryptocurrency rush to buy the Petro.

So far there is no evidence the Petro exists. The block explorer is non-functional and actually worse than non-functional since it seems to be producing fake data regarding the number of blocks. It says there are 626 blocks, much less than if the block time was really 1 minute like it says in the Petro whitepaper, and no block data or transaction data is viewable.

Beyond the faulty block explorer, people who bought Petro when the public sale started received paper certificates instead of actual cryptocurrency. This suggests the Petro is a fiat currency at this point, and that has been re-enforced by Maduro’s announcement that the Petro will not be exchangeable for citizens who wait until 2019 to buy. With a non-fungible fiat certificate, it is certainly possible to ban people from exchanging Petro if they buy past a certain date, but it is not possible to do that with a fungible cryptocurrency.

Ultimately, the purpose of the Petro was to halt Venezuela’s hyperinflation crisis, since Bolivars are supposedly backed by Petros. Inflation continues unabated, with 26% inflation in the week since Petro launched according to Bloomberg’s Café Con Leche Index, where someone buys the same cup of coffee at the same shop in Caracas regularly to gauge inflation. Annual inflation is at 150,000% per year.

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BitcoinNews.com Daily Podcast 10th November 2018, Iran Ready To Deploy National Cryptocurrency

Listen to the 10 November 2018 BitcoinNews.com Daily Podcast below.

On this edition of the BitcoinNews.com Daily Podcast, we discuss how Iran is ready to deploy its national cryptocurrency as sanctions take full effect, and how Jeff Garzik donated 15,000+ bitcoins to fund the development of Bitcoin back in the day. Hear about how Thanksgiving turkeys will be tracked with the blockchain, and how Malaysia will use the blockchain to issue university degrees.

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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UK Exchange Jumps the Gun On German Crypto Regulator

The German Federal Financial Supervisory Authority (BaFin) has closed down the operations of UK cryptocurrency exchange Finatex Ltd.

It appears that the UK firm was ordered to “cease cross-border proprietary trading immediately,” for slipping under Germany’s regulatory wire, having not received the necessary authorization to operate cross-border exchange transactions from BaFin. The UK company which was launched in Leeds, Yorkshire in 2016 has announced it plans to dissolve the company this week as a result.

This is not the first time that BaFin has stepped in to flex its regulatory muscles in recent months over the question of cryptocurrency exchanges’ rights to operate. The last attempt to prosecute a company trading Bitcoin operating without a license was, however, unsuccessful after The Berlin Court of Appeal overturned the case.

Inconsistencies in the way cryptocurrency firms can operate cross-border transactions in Europe have caused some concern recently, and the German case once again brought these to the notice of European financial regulators. Although individual EU countries have clearly defined rules in their own jurisdictions for the trading of Bitcoin and other digital currencies, the EU as a whole has so far failed to come together with a Europe-wide regulatory framework. The EU passed a motion in 2016 enabling taxation of cryptocurrency holdings, investments, and profits.

Now that the Berlin Court of Appeals has classified Bitcoin as a “financial instrument” it now comes under the auspices of BaFin’s financial regulatory practices. Its CEO Felix Hufeld only last month told investors that they should avoid ICOs due to scamming concerns. He argued:

“We do not want to stifle innovation, but must avert dangers at the same time. For example, it is important for us to take action against money laundering and safeguard the privacy rights of investors. In addition, there should be certain minimum standards for the underlying terms of the contract.”

Earlier this year, the German Federal Government stated that cryptocurrencies do not pose a threat to financial stability. The government stated on 12 June that the volume of cryptocurrencies, when juxtaposed to the overall size of the German financial system, is comparatively low and, therefore, simply needs careful monitoring and regulatory measures put in place in order to control the space.

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Taiwan Firms Laud Success of World’s First Aviation Tourism Blockchain Project

The Two Taiwanese companies who partnered to launch the world’s first aviation tourism blockchain project have praised the outcomes of their attempts so far to tokenize the travel industry.

Huafu Enterprise Holdings Limited and Far Eastern Air Transport (FAT) have published a press release outlining their successes since launching the cooperative project earlier this year.

At the end of March, Huafu Group and FAT launched a three-month public offering of its own token, Airline and Life Networking (ALLN). The aim in offering its own digital currency was to readapt its own businesses of aviation, tourism, real estate, and property management towards a more digital-based economy.  Founded in 1990, Huafu Group’s business includes construction, travel agencies, and business hotels.

The most recent press release praises the project primarily for its progress in using blockchain in the travel economy and becoming the first aviation company backed by the biggest blockchain incubator, M.O.B.C. It also notes its token ALLN is the first to partner with Southeast Asia’s biggest digital asset exchange MBAex.

The company states that ALLN is the first of its kind to work with Maxonrow, the world’s first blockchain with an instant KYC function; self-described as the first network in the world that connects societies, governments and businesses with the real economy through blockchain technology. COO of Haufu, Tseng Chin-Chih, commented:

“61 years ago, Far Eastern Air Transport became Taiwan’s first aviation company…. Now that we have Huafu’s ALLN Networking Token set into action, we are once again pioneers in the world of aviation tourism by applying blockchain technology to the real economy.”

The company was keen to point out that its ALLN token is now available as a payment tool that customers could use for booking their itineraries through a travel agent, including purchasing flights. The advantage being that, travelers would have no need to provide proof of identity when purchasing tickets, which were fully transferable. The token also enables the client with a blockchain tool to leave feedback and recommendations for other travelers.

Also, Taiwan is reportedly planning to release the initial draft of its ICO regulations early next year with an aim to simplify regulations and increase token liquidity,

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93% Britons Have Heard of Bitcoin, but Only 4% Have Ever Bought It

An overwhelming majority (93%) of Britons have heard of Bitcoin but the actual ownership statistics are as low as 4% according to UK Market Research Firm YouGov.

The survey shows mixed results regarding the future of Bitcoin because people are reportedly having troubles in understanding what Bitcoin is about. Of the 93% who have heard about Bitcoin, 23 percent said that they understand it fairly well, while only 4 percent have stated that they understand it very well.

Men are also the most dominant demographic and are three times more likely than women to understand and engage in cryptocurrencies. Overall, 6 percent of British men and 1 percent of women have purchased Bitcoin in their lifetime. Younger generation demographic including millennials are much more likely to understand and use Bitcoin as well, as almost 9 percent of 18-24 years old have purchased Bitcoin while only 1 percent above 55 have done so.

While Bitcoin’s awareness and word of mouth campaigns are extremely high in Britain as almost everyone has heard about it, its market penetration remains comparatively low. One of the reasons given for this peculiar behavior is the relative stability of the economy and the British Pound Sterling. Many countries in the world including ones in South America, Africa, Asia, and Central America see Bitcoin as a way to circumvent the chronic inflation in their respective regions.

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Iran Ready to Deploy National Cryptocurrency as Sanctions Go Into Full Effect

Iran’s national cryptocurrency is ready to be deployed, as the US sanctions go into full effect, which is mostly the reason for the Iranian Rial (IRR) to experience 300% inflation so far in 2018. The goal of this national cryptocurrency is to conduct international business since Iran’s international payment systems have been crippled.

The new Iranian state-backed cryptocurrency will be pegged 1:1 with the IRR, and will initially be used by commercial banks in Iran once the Central Bank of Iran approves the cryptocurrency. Approval is likely, considering this cryptocurrency was developed by the Informatics Services Corporation at the request of the Central Bank of Iran.

This announcement is nearly simultaneous with the re-implementation of sanctions by the United States on Iran starting 5 November 2018. Total blockades on Iran’s shipping, aviation, nuclear industry, and banking have been imposed by Washington. These sanctions are designed to ensure Iran never develops a nuclear weapon.

The crucial international payments network SWIFT has severed ties with Iranian banks. Additionally, due to the sanctions, Bittrex and Binance have stopped serving Iranian customers. Essentially, it is illegal for any company that does business in the United States to also do business in Iran.

The IRR has spiraled into hyperinflation during 2018, with the exchange rate going from 36,000 IRR per USD on New Year’s to 144,000 IRR per USD as of 11 November 2018. This suggests that the threat of sanctions, and now the implementation of sanctions, is severely damaging the Iranian economy.

The national cryptocurrency of Iran is designed to circumvent international sanctions, giving Iranian banks the ability to send money worldwide. It seems likely that when the national Iranian cryptocurrency is launched it will be deemed illegal by a United States Presidential executive order, similar to what happened with Venezuela’s Petro.

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Head Teachers in China Caught Red Handed Ether Mining at Work

Two school principals in Hunan province, China, have gotten themselves into hot water for mining Ethereum at work.

Lei Hua, Principal of the Puman Middle School in Chenzhou, Hunan convinced his wife that mining Ethereum might be a good way to earn some extra income, then put 7 machines to work at school.

Lei was put on to the benefits of crypto mining by a cousin, prompting him to spend 10,000 yuan on equipment, one machine followed later by another 6 which he ran round the clock in one of the school’s classrooms. The only problem being between June and November last year he used over $2K of the school’s electricity.

So profitable were the school principal’s extracurricular activities that his vice- principal decided to join him. The activities were only tumbled when teaching staff observed unusual levels of noise emanating from the schools’ physics’ lab which clearly couldn’t have been caused by lessons, although the 24 whirring was originally put down to the school’s air conditioning. This noise was emanating from an extra two machines set up there by vice-principle Wang, also purchased from the principal’s cousin.

Once the nine machines were discovered by authorities and duo’s earnings were seized, the school returned to its main function; educating the children. The principal was removed from office but his junior managed to retain his job with an official warning.

Illegal mining at work does happen, albeit not frequently. Power theft, however, is a far more frequent activity. Russian miners made the news earlier this year when more than 6,000 pieces of mining equipment were found at the site of an abandoned rubber factory in Orenburg, 1,478 kilometers southeast of Moscow near the Russian border with Kazakhstan.

Russian ministry of internal affairs spokesperson, Irina Volk, stated that the miners, two former factory employees, had stolen 8 million kW/h of electricity estimated to cost 60 million Russian rubles (RUB, approximately USD 968,000 at time of writing). Media reports suggest that despite rumors of the mining farm’s existence since March, police declined to comment if they had any knowledge of illegal activities taking place.

Also, earlier this year, Russian security officers arrested scientists at a top-secret warhead facility in Sarov, 240 miles east of Moscow. Several scientists had tried to use one of Russia’s most powerful supercomputers to mine Bitcoin.

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Financial Companies Need IT Infrastructural Overhaul to Match Blockchain Tech

With the rising tide of cryptocurrencies and blockchain applications in FinTech industry, financial firms may have to replace their IT infrastructural systems to keep up with the technology. This was a shared sentiment by experts at the ScotChain18 event in Edinburgh, Scotland, reports Scotsman.

The event hosted by MBN Solutions and blockchain specialist Spiritus, rallied experts from finance and blockchain sectors to discuss the impact of the rise of blockchain on commerce. Subjects touched included regulatory challenges the blockchain poses to governments globally, cryptocurrency and blockchain standards, and new business strategy outlook for organizations exploring cryptocurrency’s underlying technology.

A prominent misconception that was addressed, was the notion that current IT infrastructures could handle the data structures of the blockchain. Jeremy Drane of crypto-systems firm Libra debunked this assumption saying:

“The data is just so different that their systems can’t work with it”. While further sharing his experience when educating his customers who are rather complacent with their old systems, he emphasized that there are “minute differences between data structures” which would not allow the system to work. His recommendation often was to “buy new than repurpose” old software.

During the conference, Casey Kuhlman, CEO of smart contract provider Monax, emphasized the need for standards within the industry. His concern was about the “immature” nature of the blockchain and the fact that each cryptocurrency employed “different tech” made it hard for a clear value proposition. However, he was a strong proponent of the blockchain project happening in Cambridge stating that:

“Projects like the one happening in Cambridge will give much-needed clarity and let us talk about cryptocurrency in a more distinguished way”.

Apparently, the greater impact will be felt in business operations, as organizations will have to adjust their strategies to accommodate the changes brought about by the distributed ledger technology. The CEO of MBN Solutions, Michael Young viewed the blockchain as a “new order” and that organizations may have to “adapt to new business strategies” which will impact traditional IT infrastructures to be able to support this new order.

On a general note, blockchain data array systems are tailored to different financial services being provided. And for any traditional IT infrastructure to evolve, they may have to adapt their systems to accommodate these variables.

 

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