Daily Archives: January 5, 2019

BitMEX CEO: Bitcoin Is Society’s Best Hope for a Private Form of Electronic Money

BitMEX CEO_ Bitcoin Is Society’s Best Hope for a Private Form of Electronic Money

BitMEX CEO Arthur Hayes has spoken out in favor of Bitcoin, saying that the hallmark cryptocurrency is “society’s best hope for a private form of electronic money.”

The company is a cryptocurrency exchange and derivative trading platform. It is owned and operated by HDR Global Trading Limited, which is registered in Seychelles and has offices worldwide.

In a blog post published before the weekend, Haye’s latest thoughts on the industry entitled ‘Two sides of the coin: the bifurcated near-future of money’ suggested that the future of Bitcoin is ensured, commenting:

“Even in the face of the various centralized forces currently being marshaled: humanity’s bifurcated monetary future will be better than our monopoly monetary past, as some money becomes more convenient while other money becomes far more private.”

Hayes further suggested that until now, monetary systems had been dominated by monetary monopoly and a bifurcated system with Bitcoin representing the cryptocurrency industry would be the best hope for the future, despite the proliferation of alternatives such as Ether, Ripple, and others.

According to the BitMEX boss, another advantage that Bitcoin possesses when squared up against others is its security, having never been successfully hacked in its ten years of use. Painting a rather utopian picture of a background in which cryptocurrency can flourish, he went on to say that he felt Bitcoin could create an environment where individuals can work together towards a common end.

Hayes’ positive comments were made only weeks before he expressed his views about Bitcoin at the end of 2018, suggesting that it would continue its volatile bearish trend in 2019.

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ConsenSys, AMD to Develop W3BCloud, a Blockchain-Based Throughput Solution

ConsenSys, AMD to Develop W3BCloud, a Blockchain-Based Throughput Solution

A press release yesterday by blockchain software company ConsenSys detailed the inking of a new partnership deal with American multinational semiconductor company Advanced Micro Devices (AMD) and Abu Dhabi-based investment management firm Halo Holdings, to develop an optimized blockchain-based cloud solution dubbed W3BCloud for the blockchain industry throughput.

“W3BCLOUD is focused on providing the first independent cloud computing blockchain infrastructure, combining increased transaction throughput with state-of-the-art security,” the release states. The new infrastructure is being built to handle the emerging day-in and out of blockchain workloads to provide more efficiency in the space.

The three partners will combine their resource expertise in their field of technology. ConsenSys is to provide blockchain-related insights into “efficient compute usage for blockchain transactions, security requirements, and emerging use cases,” while AMD will leverage its renowned high-end performance hardware manufacturing specialties to build the datacenters with architectures that match the specific blockchain requirements.

Founder of ConsenSys, Joe Lubin said in regards to the newly forged partnership that “bolstering the compute power of blockchain networks with AMD’s leading-edge technology will be of great benefit to the scalable adoption of emerging decentralized systems around the globe.” Lubin expressed his usual enthusiasm for blockchain scaling, touting the envisaged product as one that “will power a new infrastructure layer and enable an accelerated proliferation of blockchain technologies.”

Joerg Roskowetz, Director of Product Management – Blockchain Technology at AMD also said in the release that they are “excited to work ConsenSys” and lend their expertise and “access to high-performance hardware technologies.” They are also optimistic about the concept of the emerging technology as well as the profound use case coverage, and are willing to play their role in the partnership to build systems “capable of better scaling and proliferating decentralized networks.”

Roskowetz identified “smart identity, enterprise data centers, and health ID tracking, to licensing and supply chain management,” as possible use cases where the new technology could be of use.

Both companies have been spreading roots within blockchain space. ConsenSys has been building up its reputation among high-interest groups both within and outside the blockchain ecosystem. It recently signed a Memorandum of Understanding with leading IT company SK Group to build and further develop the blockchain ecosystem.

AMD reportedly signed contracts with 7 major technology firms last year to develop eight high-end performance and enterprise-grade mining rigs. This is despite the sales report by the 2018 Q3 financials of the company that attributed blockchain’s contribution as per GPU-built mining chips as “negligible.”

 

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Cameroon Separatists Raise Funds Through ICO

A Cameroon separatist movement has taken the unexpected steps to raise funds through an ICO in order to promote its political causes.

Ambazonia, also known as Amba Land, is a self-declared state consisting of the Anglophone portions of Cameroon which previously comprised Southern Cameroons. In 2017, the Southern Cameroons Ambazonia Consortium United Front (SCACUF) unilaterally declared Ambazonia to be independent, while the Cameroonian government stated that the declaration has no legal weight. The ensuing protests and violence are referred to as the Anglophone Crisis.

Ambazonia’s latest step has been to launch AMBACoin which closed its pre-sale on the 27th December falling short of its 100 million token sale target. The project was organized by a rebel group fighting for Ambazonia’s recognition from the Cameroon Government stating:

“All sales of the AmbaCoin will be directed to fund the Ambazonian Cause, to assist Refugees & Internally Displaced Persons, to rebuild homes destroyed by occupying military forces, and to defend communities from the repressive regime of La Republique Du Cameroun.”

The group had claimed that once they get to power, they would, as the official government of the region “buy back all AmbaCoin in circulation at the price purchased plus 34% interest.”

The unresolved conflict has resulted in more than 500 civilian deaths and almost 500,000 people had to flee their homes. Although the situation regarding Ambazonia is ongoing, the unofficial breakaway state does have a president and a national anthem. It has now added its own national cryptocurrency to these attributes.

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Chile Looks to Incorruptible Tax Collection Using DLT

Chile Looks to Incorruptible Tax Collection Using DLT

Chile’s Treasury Department is looking to blockchain technology in order to streamline its tax collection programme.

The Chilean Government has taken this step due to losses incurred over time in the process of collecting taxes. The new programme under consideration would use DLT to create an incorruptible automatic quadrature system hosting multiple nodes.

The current system has resulted in losses in revenues at the end of each month as the Treasury Department shares information with three other organizations which adds further complexity. The new blockchain based measures will ensure that collected taxes will be redirected to the municipality through the banking system. Any interference in this process will be detected and rejected as all client information will be stored in incorruptible nodes.

Ximena Hernández, the Treasurer of General Treasury of the Republic stated that greater effectiveness and efficiency was the aim of the new updated DLT measures. He said:

“Nowadays the Digital Transformation will allow us to be much more efficient, more effective, to have greater proximity to our taxpayers and thus also to our own users. We will be able to give a better service.”

Both the Philippines and Thailand have integrated DLT solutions into their tax collection programmes over the past months. In the UK, member of parliament Eddie Hughes, an outspoken promoter of blockchain and cryptocurrency, has raised eyebrows among his more conservative peers and suggested that citizens should be given the option to pay their council taxes to local authorities in cryptocurrencies such as Bitcoin or Ether.

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Bitcoin 10 Years On: Its Place in Finance

Bitcoin 10 Years On: Its Place in Finance

Satoshi Nakamoto’s original vision for the use of Bitcoin has certainly evolved over the last decade, with mainstream adoption and the widely-believed “inevitable” entry of institutional investors giving it a place at the table with the likes of Goldman Sachs and Bank of America.

Once dismissed as some libertarian fantasy, Bitcoin has certainly come a long way in the last ten years, but will it truly ever manage to find a sustainable place in the mainstream financial sector?

The original use case

As Nakamoto imagined it in the white paper, Bitcoin would be ”a purely peer-to-peer version of electronic cash [that] would allow online payments to be sent directly from one party to another without going through a financial institution”, citing the weaknesses of the trust-based model of which third-party mediators are required. Because of the double spending problem that arises from this model, Nakamoto recognized that merchants and banks would be required to ”hassle [clients] for more information than they would otherwise need”.

Bitcoin was created as a new electronic payment system that provided an alternative solution to the double spending problem by publishing all transactions on the blockchain publicly with a timestamp that means the first transaction that took place can always be checked. This is a way for customers to retain their personal data while giving people financial freedom to transact if they did not, for example, have the required identification to open a bank account or simply did not want to share that information. It also removes their requirement of dealing with central banks, of whom Nakamoto had expressed concerns over the way they managed peoples’ capital.

The idea of Bitcoin was revolutionary (a description its creators never used yet one hundreds of cryptocurrencies claimed), rebellious and, given that it meant anonymity of transactions, not something that central banks or governments looked upon favorably in the early days.

However, money talks, and after the Bitcoin bull run of 2017, the financial sector was forced to legitimize it at the very least as a potentially profitable investment option.

The move into the mainstream

CNBC, Forbes and Bloomberg have all featured positive reports on Bitcoin as an investment tool in 2018, with Henrik Andersson, chief investment officer of Apollo Capital Fund claiming, ”the coming year we will see a gradual adoption from institutions.” Andersson sees the growing number of US university endowments investing in funds as one major indicator of his claim. Goldman Sachs’ awaited cryptocurrency trading desk should also launch this year, while Nasdaq already supports cryptocurrency exchanges.

All of these factors indicate a real move of Bitcoin into mainstream finance, and into the highly-regulated world of identity checks and third-party mediators that it was created to avoid.

2018 closed with the banking sector in a bear market and the worst annual performance of the stock market in the last decade, with reports attributing this to the slowdown of the Chinese economy and concerns in the European market over the economic impact of the UK leaving the European Union.

While the cryptocurrency market did not perform well itself and Bitcoin indeed finished the year with its worst annual performance to date, there are still many questions over what impact the mainstream financial sector has, and will have in the future, on the performance of cryptocurrency.

As more institutional investors enter the market and an increasing number of established banks offer digital asset investment options, will more money be moved into cryptocurrency when stocks fall and traditional investment choices become less attractive? Or will Bitcoin’s move into the mainstream mean it is negatively impacted by poor performance in mainstream finance?

It is still early days to know for sure, but one study conducted by Yale University in August 2018 claims that the price of Bitcoin is not affected by macroeconomic factors or familiar stock market factors. Rather, they say, the drivers of cryptocurrency prices are unique to the market itself, with they two key predictors being market sentiment, investor attention and a ‘momentum effect’ that see patterns in price fluctuations.

Although, if predictions are correct in estimating an influx of institutional investors in 2019, how their influence will play out in Bitcoin’s market performance may change the conclusions of the Yale study.

Can Bitcoin succeed if it is primarily viewed as a tool for investment?

Bitcoin benefits from its resource scarcity as commodities such as oil and gold do, but nowhere in its white paper does it promise “high returns, no risk” as you can find in many initial coin offering white papers in circulation.

Major centralized cryptocurrency exchanges such as Coinbase that require identity authentification surely go against what Nakamoto originally envisioned for Bitcoin. With global regulators focused cracking down on the industry, can Bitcoin survive without exchanges complying with know-your-customer regulations?

2019 should be a year to set the pace for understanding where Bitcoin will find itself in the foreseeable future of finance.

 

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SWIFT Fights Fire with Fire, Lining Up Blockchain Payment Trials

SWIFT Fights Fire with Fire, Lining Up Blockchain Payment Trials

Last year, Ripple threw down the gauntlet, offering a major challenge to the well-used Society for Worldwide Interbank Financial Telecommunication (SWIFT) payment system. And now, the highly respected payments system is turning to blockchain to keep it ahead of the game.

SWIFT is launching trials for its new Payment Validation System”, after bringing in its “integrated payment validation” into action last December in an attempt to compete with emerging blockchain companies.

Late last year SWIFT India and MonetaGo teamed up to form a pilot shared DLT network in order to upgrade Indian bank services, facilitating fraud prevention and security, with the plan to be able to service all Indian banks in the future by using the shared network.

Ripple, itself no slouch, has just joined three other partners to form a regional alliance called Blockchain for Europe in order to bring together what it describes as “fragmented” voices in Europe into a “more unified whole” in matters of the blockchain. Such moves are sure to offer confidence to intuitional players such as American Express, in the fact that Ripple is becoming a far more representative voice for the blockchain industry as a whole, despite its Bitcoin purist detractors.

Ripple has done as its name suggests, making a worldwide case for its native token XRP as a banking and digital money transfer service worthy of competing with many older systems. Clearly, the pressure has had some impact on SWIFT, resulting in its continuing interest in utilizing DLT solutions for its banking services.

SWIFT clearly wants to demonstrate that it can hold off challenges for the number one spot by examining its services and establishing where improvements can be made. The new Payments Validation pilot now has 14 major banks involved in its current error-finding project. SWIFT stated in an official release that:

“The pilot is the first stage in the roll-out of the ambitious gpi validation program. The goal of the pilot is to build the foundation of a new integrated and interactive service that will significantly improve efficiencies in the payments process and which will ultimately be made available to all 10,000 banks across the SWIFT network.”

Ripple’s chief market strategist, Cory Johnson, was quick to release a video in response which highlighted the benefits of Ripple Blockchain solutions.

 

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