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Blockchain Gains IP Credence Among Chinese Legal Institutions

Blockchain Gains Credence Among Chinese Legal Institutions

Blockchain has found its way to an internet courtroom in Eastern China to get justice for writers, reports China.org.cn.

The painstaking effort exercised in getting justice for authors whose intellectual properties are misappropriated just got easier, as explained by a judge of an internet court in China,Wang Jiangqiao. He said:

“Writers used to resort to screenshots and downloaded content as evidence, which was hard to gain legal recognition as the process was not credible enough.”

But it seems with the perks of blockchain’s immutability and timestamp actions, the credibility of the facts stored on a blockchain is much more reliable. Wang added that:

“Blockchain guarantees that data cannot be tampered [with], due to its decentralized and open distributed ledger technology. Therefore, all digital footprints stored in the judicial blockchain system, [including] authorship, time of creation, content, and evidence of infringement, have legal effect.”

More so, plaintiffs have had to suffer the high cost of legal bills when seeking justice through the traditional method as Wang observed that “notarial procedures and hiring of professional lawyers push up the costs of seeking justice”.

The media outlet also reports that 107 prominent online writers have signed contracts to produce works in a “writers’ village” in the city’s Binjiang District of Hangzhou. Hangzhou is home to many, if not most, online writers in China.

Three internet courts have been situated in three districts: Hangzhou, Beijing, and Guangzhou. While internet-related cases are a norm because of the high internet activity in the country, Hangzhou appears to be in the front lead to adopt blockchain solution in solving copyright issues, first with writers.

The first time a case was solved through evidence brought forward on the basis of blockchain happened about five months back. A Chinese defendant successfully argued his innocence in the Chinese court at Hangzhou using blockchain timestamp data, clearing his name from charges of copyright theft.

It appears that writers are not the only ones who need the services of the internet court, as China is home to over 800 million internet explorers with online businesses at the heart of the activity. Other related case types being handled by the court include contract dispute arising from online shopping, product liability dispute arising from online shopping, disputes over internet service contract, disputes arising from the financial loan contract disputes and small loan contract disputes signed and executed on the Internet.

On the traditional side of things, other real-world courts are adopting the concept of blockchain as a reliable witness to intellectual property as seen in the case of the Russian Intellectual Property (IP) court successfully using a blockchain-based solution for storing copyright data.

Even though cryptocurrencies are banned in China, its Supreme Court seems to think blockchain evidence can be seen as legally binding material in court.

 

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American Express Praises Ripple for Cross Border Payments

american express

According to a top American Express representative, Ripple has the potential to revolutionize cross-border transactions globally.

Speaking in Madrid recently at the Wings of Change Europe conference, Carlos Carriedo, the credit card giant’s general manager of corporate payments indicated this was one reason that blockchain integration was high on the company’s agenda for change.

Clearly, Ripple’s XRP has caught the eye as the preferred blockchain route for the company moving forward, if Carriedo’s views are a clear representation of the Amercian Express’ programme for future development of financial services around the globe. He explained why his company was looking at Ripple becoming a significant blockchain partner in the future:

“Blockchain is absolutely an option we’re looking at. Just to give you a sense, we have invested in a fintech lab based on blockchain technology, just to understand how to leverage this better…We did a test, partnering with Santander locally, and with Ripple to just do cross-border transactions…And in a matter of seconds, through this test, our clients were able to transfer funds in a very transparent and seamless way, from one part of the world to the other one.”

Ripple itself has just joined three other partners to form a European blockchain 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 is spreading its global network. And by working with American Express, collaborating with Santander to reduce the current inefficiencies of cross-border payments it has heightened its global profile. Also, significantly Ripple has gained approval to operate in China, opening up other opportunities in the region.  By using Ripple, Santander has stated that it wants to fundamentally change cross-border payments universally by establishing a strong alliance between the two companies. AM’s Carriedo again, speaking of the future of payments:

“There is more to come. There’s still a lot of things that need to get addressed with blockchain as a technology. But it’s very promising…The future is definitely digital. Digital is the way payments will continue to be across both the consumer part of the business the commercial part of the business”.

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Chinese Financial Watchdog Declares STOs Illegal

Chinese Financial Watchdog Declares STOs Illegal

Security Token Offerings (STOs) have been declared illegal by the chief of Beijing Municipal Bureau of Finance, Huo Xuewen. He stated this at a wealth management forum sponsored by the bureau.

I will issue a risk warning to those who promote and issue STO tokens in Beijing. My advice is to only engage in such offerings when the government has legalized them,” Huo said.

ICOs have been declared by the Chinese government but until now, it has been silent on STOs. With this statement, even these are illegal – at least within the jurisdiction of the Chinese capital.

STOs are very much like ICOs, but with a small difference. Unlike ICOs, tokens issued through STOs offer investors a stake in the profits of the platform, much like traditional financial securities do.

Crypto token issuers have been trying to circumnavigate the blocks that the Chinese government is placing. When ICOs were banned, platforms and issuers simply moved their operations overseas but continued to sell their tokens in the Chinese market. To this, vice president of People’s Bank of China, Pan Gonsheng, had issued a statement: “Any new financial product or phenomenon that is not authorized under the existing legal framework, we will crush them as soon as they dare to surface.”

Crypto issuers have also been using tactics such as airdrops and convincing local investors to fund platforms outside of the mainland. These have also been declared illegal by Chinese authorities.

Even the remote connection with token offerings are swiftly and strictly struck down. In August, Guangzhou Development District even sent a notice to a local business that intended to host a cryptocurrency event, telling them to stop all events and promotions.

 

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G20 Calls for Universal Crypto Taxation Rules

G20 Calls for Universal Crypto Taxation Rules

Cryptocurrency and taxation have found their way among the main headlines coming out of the latest 2018 G20 meeting in Buenos Aires, alongside further commitments to fight climate change.

The G20 has now announced the desire for universal cryptocurrency taxation legislation to cover all jurisdictions within its remit with the body planning to regard itself as a “huge IT company” going forward. New laws governing the taxation of cryptocurrencies would also include further regulation as promised earlier in the year.

The current problem, which will clearly need to be overcome by some lateral and innovative thinking, is the role of international law in matters of taxation, as current ones do not allow most countries to tax companies without physical bases in that specific country. In the new declaration to commit to a cross-border crypto tax system, the G20 stated:

“We will seek solutions for the international taxation issue accompanying the digitization of the economy and will continue to collaborate.”

Previous G20 meets had already raised the topic; in its July report, the body’s Financial Stability Board (FSB) noted that previous analysis of crypto-asset markets, which included initial coin offerings (ICOs), had brought forth awareness surrounding significant challenges such as rapid market development, lack of transparency (with regard to identity and location of token issuers), as well as governing laws for white papers and gaps in data.

There continues to be some consensus from within the group representing the 20 nations about the value of innovation, although this may be limited to the respect currently being shown for the current impact of DLT and AI in the fintech space and elsewhere. The G20 has asked for further investigations to be launched in cryptocurrencies when Japan takes over the helm as chair in 2020.

Regarding cryptocurrency, the G20 repeatedly cite taking actions which are “balanced between preserving the benefits of innovation and containing various risks, especially those for consumer and investor protection and market integrity” but again AML legislation will be a focus with Japan as the next chair.

As is frequently in the case regarding the G20, it is a matter of getting all members on the same page, particularly given the current political friction between some of the member states. Europe and the UK are interested in developing such a program that they feel could combat money laundering and fraud, particularly in the case of larger organizations, but Japanese news agency Jiji has indicated that the USA and China are far more reticent to endorse such a move.

 

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Recent Calculations Show Global Mining Energy Supply to Be Mostly Renewables Based

The UK based CoinShares has released a report detailing the origins of global energy resources used in Bitcoin mining.

The crypto assets research and investment firm, listed on Stockholm’s NASDAQ/OMX exchange, conducted the survey in answer to critics’ continued arguments that Bitcoin mining is essentially an environmentally harmful activity due to its extreme use of electricity. It was also conducted in response to an article published by University of Hawaii’s Department of Geography and Environment which called on its own research to determine that Bitcoin mining could cause the pollution limits to exceed those stipulated by the 2015 Paris Agreement.

The article, written by Camila Mora, asserted that this carbon footprint calculation was achieved by multiplying Bitcoin’s 2017 estimated energy consumption and CO2 emission rates associated with countries from which mined blocks were thought to have been mined. According to Mora:

“By multiplying the electricity consumption of every block in 2017 by the electricity emissions in the country where the proof-of-work was likely to be resolved, we were able to estimate the total CO2 emissions for computing every block in 2017.”

The CoinShares news report has responded to this calculation by calling on industry insider knowledge and data available to the general public in order to put together an estimate of exactly where the energy used by the miners originate. The proposal is that 77.6% of worldwide Bitcoin mining is conducted through the use of renewable energy resources.

CoinShares accuses the University of Hawaii’s report of being inaccurate and oversimplified which lacked the regional economic and political considerations of the CoinShares analysis. The reality, according to the new report is that most of the world’s crypto mining has been conducted in China up until now, which is calculated to be about 60% of global mining, despite many countries being driven overseas due to climbing costs and the search for cooler climates.

China now has a major campaign which is aimed at drawing the country to supplying renewable energy such as solar. The Chinese program, entitled “curtailment” is largely conducted in regions where most Bitcoin mining takes place. Last year China became the world’s highest producer of solar energy. This has resulted in a glut of power which regional grids in these newly labeled areas are simply unable to deal with.

The outcome is that companies mining Bitcoin are moving to the “curtailment “ areas to lower their production costs resulting in extremely high renewable powered mining statistics: 95% of Chinese mining through renewable energy and 80% of total Chinese mining (or 48% of global mining) occurring in Sichuan.

Outside of China, Russia is at the other end of the scale with only 17% of its cryptocurrency mining conducted using renewable energy recourses. Iceland, Georgia, and the Northwestern US, on the other hand, are strong adherents to the use of renewable energy for Bitcoin mining.

Projects are currently underway in the Sahara using a 900-megawatt wind farm south of Marrakesh, and in Japan using solar power through the Kumamoto Electric Power Company

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Manila Residents Paid ETH for Consensys-Backed Beach Cleanup

beach cleanup

Manila residents are being paid in Ether for cleaning up the city’s plastic-ridden beaches in a new crypto for work project in the Philippine capital.

Recent research has shown that that five Asian countries — China, Indonesia, the Philippines, Vietnam and Thailand — account for more than 55% of global plastic waste leaking into the ocean. Indonesia, currently participating in a number of blockchain programs, is also a significant contributor to ocean pollution.

Manila’s beaches are listed as being some of the most heavily polluted beaches among these nations. Residents now have the chance to do something about this and be rewarded with cryptocurrency in the process. Stirring this social conscience is Ethereum’s co-founder Joe Lubin, who is also CEO of blockchain software giant ConsenSys.

He commented, “In Manila, participants will be paid in ETH for spending a few hours cleaning up one of the most heavily polluted beaches in the world. Bounties Network and ConsenSys Impact are proving a new model where people fund causes directly without intermediaries.”

Beach cleaning participants will be able to use a decentralized application (Dapp) based on the Ethereum blockchain to receive their rewards in ETH. The project is part of a larger ConsenSys program called ‘Bounties for the Oceans: Philippines Pilot – Sustained, Verifiable Plastic Cleanups’. The initiative states:

“Plastic pollution costs the lives of 1 million seabirds and 100,000 marine mammals per year… With Bounties for the Ocean, we are asking people everywhere to submit verifiable proof of their direct plastic cleanup contribution as a way of fostering widespread and long-term behavioral shift. Do not depend on centralized organizations, go out there and do it yourselves.”

Manila residents are not the only ones “doing it for themselves”. There are a number of blockchain programs around the world at the moment which are making a significant contribution to fighting pollution.

US cleaning supplies firm SC Johnson has announced that it plans to launch blockchain rewards-based recycling centers in Indonesia to help solve the problem of plastic pollution. The company, which also which owns such brands as Glade, Ziploc and Mr Muscle, will open eight centers with the support of Plastic Bank using a tokens-for-waste payment system for local users.

A Norwegian startup has come up with a way of using blockchain to clean beaches via token rewards for recycling. The public, by removing plastic waste to any certified recycling station, is rewarded with waste tokens. The idea draws on a system that has been in operation for some time throughout Norway where plastic bottles can be returned to shops for between 15 and 30 cents a bottle.

The Philippines project is well placed given the country’s adoption of Bitcoin and Ethereum as legitimate forms of payment by the central bank, with local platform Coins.ph conducting business using partnerships with major commercial banks, remittance outlets, credit card companies, electric grid operators, and convenience stores,

Having become the largest platform in Southeast Asia, Coins.ph has over 5 million users.

 

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China Warns Fintech Revolution Potentially At Risk Without Rules

China Warns Fintech Revolution Potentially At Risk Without Rules

The president of a major financial investment platform has suggested that the sheer numbers of fintech companies setting up in China represents a risk to the country’s development as a major hub because of lack of controls.

Vince Zhang, President of Phoenix Finance, was speaking on Day 3 of CNBC’s East Tech West on 29 November 2018 in Guangzhou. He suggested that many of the country’s fintech firms could be unsound due to lack of strict operating checks and balances, making them unsuitable in the long term for consumers. It is estimated that there are now tens of thousands of such companies operating in mainland China.

Zhang went on to say that this factor means that China’s fintech revolution is potentially at “a very big risk” due to this lack of competent management. He stated:

“A lot of companies are not [there] in terms of their business plan, in terms of their risk management process, in terms of their overall management… A lot of these corporate control mechanisms are not in place.”

Zang maintains that China’s so named “fintech revolution” has caused the numbers of fintech firms to swell over the past two years in a surge to attract unbanked consumers. He said that although other sectors may survive, he sees the financial sector in danger of coming under increased pressure: “For anything related to financial services, [it] is pretty dangerous.”

Phoenix Finance’s president suggests that better regulation is key to solving this potential problem and feels that the issue will get the attention from government regulators next year as the risks to China’s fintech developmental plans for the future become more evident. He argued that regulation will reduce the number of companies currently operating financial services:

“Without proper risk control mechanism personnel, without proper ways of communicating with regulation, it’s potentially becoming a very big risk going forward… I would predict in 2019 it’s becoming more regulated… There will be less and less players in this field.”

The Cyberspace Administration of China (CAC), the central government’s internet censor, is drafting a policy framework which, once formulated will be used for regulating blockchain projects in the country.

The new regulation, when established, will apply specifically to both individual and institutional providers of blockchain services, whether by laptop or mobile, referring to providers as “entities or nodes”.

 

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Chinese Miners Close for Mandatory Inspections, Bitcoin Mining Hash Rate Declines 10%

On 5 November 2018, Chinese authorities cut power to cryptocurrency mining farms in Guizhou and Xinjiang provinces for mandatory inspections. It appears this has caused Bitcoin’s network hash rate to decline 10% from 50 Exahash/s to 45 Exahash/s as of this writing on 15 November 2018.

Authorities entered the cryptocurrency mines for tax inspection, identity verification and registration, an audit of funds, and to collect customer information. Mining companies were required to sign a contract that said:

According to the needs of the public security department’s network information security work, in the future, our company will implement higher standards for the company’s business real name system according to the work needs of the public security department. For customers with the latest standard real-name system, the data center will have to suspend reloading, restarting, moving in and out, etc.”

Beyond this, mining companies had to agree to implement optimal power supply procedures, have proper business licenses, and to follow proper social security protocols.

At least some cryptocurrency mines were given a notice that they had to relocate, or that their power would be throttled after using a certain amount. For cryptocurrency miners, this can be catastrophic, since mining can rely on slim profit margins dependent on perpetual operation.

One of the mines impacted by this situation is reportedly losing nearly USD 150,000 per day. If the 10% decline in Bitcoin’s network hash rate is due to this cutoff, that represents total losses of USD 1 million per day. However, it is impossible to confirm if the entirety of the 10% decline is due to this mining crackdown.

There is no confirmation that power has been restored and indeed, Bitcoin’s network hash rate has not increased since the mining shutdown began, perhaps suggesting cryptocurrency mines in Guizhou and Xinjiang remain in the dark.

 

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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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Principal Turns Chinese School Into Mining Farm

The principal and vice principal of a middle school in Chenzhou, Hunan Province, China have been busted after turning their middle school into a cryptocurrency mining farm. Lei Hua and his deputy Wang Zhipeng have been fired, thrown out of the Communist Party, and their mining revenue confiscated. The mining operation reportedly used large amounts of the school’s electricity and internet bandwidth.

Apparently, a loud noise had been emanating throughout the school at all hours, including holidays, due to the mining rigs. Additionally, the internet had slowed to a crawl at the school, a serious detriment for computer students and teachers. The teachers asked the principal why this was happening and Lei responded that the air conditioner and grills were being used too much. That was a good excuse for the power bill, which increased by nearly 100% and cost the school a total of USD 2,163, which has been paid back at this point. Eventually, the teachers worked together to investigate since the loud noise and slow internet was too much of a nuisance to ignore and discovered the mining rigs.

Indeed, the reason Lei moved the mining rigs into the school in the first place was that they consumed too much electricity at home. They originally moved a mining rig into a school dormitory but after they expanded to nine rigs, there was not enough room in the dormitory so they moved the mining farm to a computer classroom.

Ethereum has experienced a drastic price decrease during 2018 from nearly USD 1,400 in January 2018 to about USD 200 as of November 2018. This has caused Ethereum mining to become unprofitable for individual miners. Some have sought a source of free electricity like Lei and Wang were doing.

This is not the only incident of employees stealing electricity for cryptocurrency mining. An employee at the Florida Department of Citrus was arrested for mining cryptocurrency on state computers, a group of staffers for the Louisiana Attorney General are being investigated, and an employee of the Federal Reserve of the United States was fined USD 5,000 for mining Bitcoin on government computers.

 

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