Daily Archives: April 6, 2019

National Bank of Cambodia Pushes to Claim First Place in Blockchain Race

A World Economic Forum (WEF) report has indicated that the National Bank of Cambodia could become the first central bank in the world to utilize blockchain technology.

After piloting DLT since 2017, the South East Asian central bank hopes to deploy a blockchain payment system later this year, with the aim to overtake other banks around the world which so far have limited their involvement to simply studying the new disruptive technology.

The issues that the National Bank of Cambodia are hoping to address is to improve banking through effective uses of mobile devices and addressing the bank’s rather fragment domestic payment system which has been a cause of confusion for some time.

More fluidity is sought by the bank to ensure efficient payments for its customers by resolving such issues. And if successful, could become a beacon for other larger more established banks around the globe. The WEF has pointed out in its report that Cambodia is not alone as more than 40 banks are hoping to utilize blockchain technology in order to improve its operating procedures, and some are even considering their own national cryptocurrencies; the most popular of these being CBDCs (central bank digital currencies)

Banks cited in the new report included the Bank of England, Bank of Canada, and the Monetary Authority of Singapore. The Central Bank of Lithuania is one that plans to launch its cryptocurrency as a pilot in the near future.

Both Saudi Arabia and the neighboring United Arab Emirates (UAE) have announced that their central banks are to cooperate on the trial of a new cryptocurrency. The digital currency named Aber was announced in a joint statement released by The Saudi Arabian Monetary Authority (SAMA) and the Central Bank of the UAE. The proof-of-concept trial will be an attempt to lower the cost of transfers using a blockchain-based settlement solution.

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UN Aviation Agency President Predicts Blockchain Will Be Key Within the Industry

The president of the United Nations specialized agency for aviation has suggested that blockchain technology is set for making a huge impact on the aviation industry.

Dr. Olumuyiwa Benard Aliu, speaking at the International Civil Aviation Organization (ICAO) Blockchain Summit and Exhibition in Abu Dhabi claimed that with the predicted rise of global air traffic volumes, blockchain will be key.

Due to the intensification of ground, passenger, ticketing and cargo handling activities, Dr. Aliu predicted that “Blockchain has the potential to virtually exclude loss, distortion, or forgery of vital log data in all aviation sectors where certificates are issued and controlled.”

Other areas where blockchain can make an impact is on record keeping, crucial for safety within the industry, where updates of personnel licensing, aircraft maintenance, operational approvals, and cargo manifests are essential aspects of aviation. Dr. Aliu commented:

“The aviation system today relies mostly on human agents or intermediaries to assume validation activities, and so we can foresee that the integration of blockchain […] in support of a state’s aviation safety oversight system, for example, would likely require substantial adjustments to related regulations, procedures, and responsibilities.”

Another vital area where blockchain can influence systems according to the UN president would be the area of traveler identity verification.  He also added that smart contracts could be used to manage critical safety and security processes for civil aviation.

The industry has shown considerable interest in the incorporation of blockchain tech in recent years. The United States National Aeronautics and Space Administration (NASA) is examining the potential of employing a management blockchain to enable secure, private and anonymous communication with air traffic services.

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Two Canadian Crypto Firm Owners Fight $30 Million Fraud Accusation

Two Vancouver cryptocurrency firms are fighting accusations of fraudulent activity to the tune of USD 30 million involving an initial coin offering.

The two company owners, Lisa Angela Cheng and Kevin Patrick Hobbs, are to fight their cases in the British Columbian (BC) courts, after having denied any wrongdoing, claiming they have “never misappropriated funds.”

The  B.C. Civil Forfeiture Office’s claim is that the couple raised money by “deceit, falsehood or fraudulent means,” by launching their FUEL token as part of their two companies’ businesses.  The companies Vanbex Group Inc. and Etherparty Smart Contracts Inc have been subjected to an RMCP investigation which determined that the couple raised more than USD 30 million illegally. The claim states:

“…by falsely representing corporate investment opportunities … knowing they did not intend to use the invested funds to develop products they were marketing but rather with the intention to misappropriate the corporately invested funds raised for their own personal benefit.”

In question are a three-bedroom townhouse with the view of Coal Harbour bought in late 2017 by Hobbs and Cheng for USD 4.1 million in cash, two Range Rovers, an apartment in Toronto purchased for just under USD 3.74 million and a leased Lamborghini. Hobbs has a criminal record, including for money laundering in 2008.

Cheng and Hobbs say Vanbex did not solicit funds from investors for the development or distribution of the FUEL token and did not claim the value of the tokens would increase. The terms were clear and transparent going in and all risks documented, according to the couple’s legal counsel. Their statement claims:

“We intend to defend vigorously and to present a complete and truthful narrative for the court. We are confident that at the end of the day the truth will come out and the facts will prevail in our favor.”

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Ripple Founder Donates $25 Million Dollars to San Francisco State University

Chris Larsen, founder of cryptocurrency company Ripple has donated USD 25 million to his old alma mater San Francisco State University (SFSU).

The donation worth USD 25 million from both the tech entrepreneur and his wife Lyna Lam in XRP tokens to SFSU’s College of Business through RippleWorks, a private foundation that provides practical support to promising social entrepreneurs, has come as a real boon the University. Venesia Thompson-Ramsay, interim vice president for university advancement commented about the donation being made in crypto:

“This was a learning process for all of us because we never had to deal with any cryptocurrency before…But this will be the norm in 15, 20 years and this gift is allowing us to be part of this cutting-edge, new economy.”

The XRP donation made in November has been prone to market fluctuations but Larsen has committed to ensuring the SFSU get the full amount, having made USD 3 million in cash and promising to make up the difference. Currently, due to financial regulations, the university is liquidating the money donated so far through cryptocurrency exchanges, to have USD 7.5 million sitting in its bank account.

The donation will finance an endowed chair in fintech and fund the Lam-Larsen Fund for Global Innovation, which will support students studying cryptocurrency and other digital financial services. Last year, Ripple pledged USD 50 million to 17 universities around the world to further the study of digital finances.

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Bosch and Wien Energie Set up the First Blockchain-Driven Refrigerator

Blockchain powered refrigerator by Bosch and Wien Energies

Electronics giant Bosch and Wien Energie – heating, cooling, and decentralised solutions provider has presented the first Blockchain-driven refrigerator to achieve inspection of electricity consumption in a transparent manner. The device is currently demonstrated at the Anon Blockchain Summit, Vienna.

In a press release, Wien Energie said, “The refrigerator shows how households can control and influence their electricity consumption”.

The refrigerator is supervised by an application which allows the performance of various functionalities such as notifying the user in case the refrigerator door is left open. It also allows supervision of the electricity consumption periodically and examination of the CO2 footprint. The customer has full control over the data and the settings.

Peter Gönitzer, the CEO of Wien Energie, said

“We see the Blockchain technology as an opportunity for us and are already testing the possibilities in practice with pilot customers. The goal is to make the topic of energy more vulnerable and comprehensible in the future. So far, the power is simply coming out of the socket, while the Blockchain can give the power a machine. “

For every unit of electricity consumed by the refrigerator, there is a transaction validation on the Blockchain network and the proof of origin is delivered to the user. From production to consumption of energy, a transparent report is made available to the consumer.  This is realizable through Blockchain’s forgery-proof control by which all the transactions are public, yet they are stored anonymously.

The project will be verified with three parties in the upcoming months. This plan is a huge stride to involve citizens in the electricity market and to increase awareness in power generation and consumption to develop an eco-friendly environment. The citizens will be taught how the electricity tariff prototypes and the smart meters will work with the help of Blockchain technology.

This being said, Blockchain with the help of its secure network protocol will enable a widespread application to procure efficient technology-based business models in the years to come.

Gönitzer said,

“The Blockchain infrastructure should enable new business models in the energy market. For example, an e-charging station could then use a computer protocol on the Blockchain and automated contracts to purchase electricity from both the solar [energy generation] system on the roofs of a neighborhood and from the wholesale exchange and then market it to an electric car”.

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Crypto Companies Should Focus on Insurance for Value in Flight

Crypto Companies Should Focus on Insurance for Value in Flight_ Crypto Companies Should Focus on Insurance for Value in Flight

Cryptocurrency market as an emerging risk market requires insurance on multiple layers, according to a blog post by Coinbase chief information security officer Philip Martin.

As the cryptocurrency industry matures, so does the need for increased financial security. One way to achieve this is through a contingency system like an insurance program. Martin explained Coinbase’s approach in securing the confidence of its customers if exposed to loss due to the hacking of its hot wallet.

“The data is clear that today, the most likely consumer loss scenario for any cryptocurrency company is hot wallet loss due to hacking. We secured our first policy to address that risk at the end of 2013… If the worst happens and Coinbase loses customer funds, customers deserve certainty that they will be made whole.”

Coinbase insurance program covers both fiat deposits and cryptocurrency holdings in hot wallets, with the fiat deposits covered by the Federal Deposit Insurance Corporation (FDIC). Meanwhile, the cryptocurrencies in the hot wallet are insured by multiple partners. “We currently hold a hot wallet policy with a USD 255 million limit placed by Lloyd’s registered broker Aon and sourced from a global group of US and UK insurance companies, including certain Lloyd’s of London syndicates,” Martin explains.

“Significant programs like ours, especially in emerging areas of risk, are generally put together using a large number of insurance companies who each take positions of loss in a ‘tower’.”

Martin finds misinformation around insurance to be one of the hindrances to adopting insurance. Where companies are rather puzzled by the nature of insurance to adopt, bundled with how much insurance should a crypto company have, and what should it cover? Martin suggested that “companies should focus on insurance for value in flight”, which caters for crime due to hacking, insider theft, and fraudulent transfer of both cryptos and fiat.

Circle and Gemini, as well as most financial companies, use institutions like the FDIC to cover for losses exclusively resulting from insolvency. However, losses due to the hacking of hot wallets are not covered by the institutions due to the nature of cryptocurrency’s unregulated status, hence the need for multiple insurers with sufficient knowledge-base on the risk nature of cryptocurrencies. “[Coinbase has] maintained a commitment to educating and growing the cryptocurrency insurance market,” Martin clarified.

Despite the level of risk in the cryptocurrency industry, and lack of transparency of insurance protocols for most companies, it is clear that insurance companies are indeed warming up to the cryptocurrency markets, though at a very slow pace.

Last year, Bitcoin News reported a new decentralized exchange UnitedCoin’s approach to insurance, where it disclosed a USD 100 million coverage on its hot wallet containing only 2% of the exchange’s funds. Moreover, in South Korea, insurance providers are willing to offer insurance products against hacking to crypto exchanges.

The importance of insurance in the cryptocurrency exchange marketplace cannot be overemphasized, and while many exchange businesses still suffer from the lack thereof, it may, however, soon be a defining factor for customers’ preference in the near future as the industry expands beyond retail cryptocurrency investors and traders. Yusuf Hussain, Gemini’s Head of Risk puts it this way:

“Consumers are looking for the same levels of insured protection they’re used to being afforded by traditional financial institutions.”

 

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Missoula County’s Sole Bitcoin Miner Protests Emergency Ruling

Missoula County’s Sole Bitcoin Miner Protests Emergency Ruling

Just a day after promising to make the Missoula urban area run only on renewable energy by 2030, commissioners in the Montana state county yesterday declared a public emergency to justify interim regulations on new or expanded cryptocurrency mining operations. These are to stay in place until a solution is found.

Although the authorities have insisted that it is not specifically targeting a specific company, since emergency zoning measures would target all businesses, mining firm HyperBlock is the only operation in the county. It has now protested the new regulations, saying it would have no choice but to shut down its business to comply.

The attorney representing the firm, James Bowditch, told commissioners the firm did not want to be forced into litigation:

“You’re really targeting one business and that’s the only business that exists that will be impacted by these regulations. Nobody disagrees, including myself and my client, that climate change is important. But this is not the way to do it. Doing so this way will only result in one thing, and that’s what I’m fearful of, and that’s a lawsuit.”

HyperBlock brought attention last year when commissioners said that its operations consumed energy equal to a third all households in the county. Commissioner Dave Strohmaier declared:

“As near as I can tell, cryptocurrency mining is using exponentially more energy than any other energy user. As far as an industry goes, it’s a grotesque amount of energy and we’ve got to take steps to address it.”

The new regulations mean that HyperBlock cannot expand, and prevents other miners from starting up in Missoula County, unless it develops or buys renewable energy to fully offset what it consumes. HyperBlock does in fact run on 100% hydropower but does not meet the new criteria because the green energy must be newly acquired, and not taken from existing supply.

Diana Maneta, the county’s climate action advisor, explained:

“The mining operation must be able to establish that their actions will introduce new renewable energy onto the electrical grid, beyond what would have been developed otherwise.”

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