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China Releases Blockchain Guidebook for Bureaucrats

The Communist Party of China (CPC) has published a blockchain guidebook that observes the technology’s key features scientifically, the origins and future applications, as well as approaching challenges.

An official’s guidebook

The publication was announced on 13 Augus in a press release on the CPC website. The book, ‘Blockchain – A guide for Officials’, covers many facets of the nascent technology which will offer counsel to government officials.

In an excerpt from the book in the chapter ‘From Internet Thinking to Blockchain Thinking’, Ye Hao, president of People’s Network writes:

“We call on the industry peers to continue to look at the blockchain technology with a development perspective. Looking at the blockchain label from a scientific perspective, look at the blockchain industry with a strategic eye, look at the blockchain business opportunities with a calm eye, promote the sustainable and healthy development of the blockchain industry.”

The introduction of the book allows for the CPC to assist other government authorities on how to better understand blockchain, establish a common ground from which they can work together and drive adoption of the distributed ledger technology on a national scale.

Looking ahead

The publication arrives at a time when huge levels of funding directed at blockchain are pouring in across multiple mega-city projects in China: USD 80 million for blockchain startups in Shenzhen, USD 1.6 billion in Hangzhou and USD 1.48 billion for Nanjing City.

Furthermore, the “number one urban project” in China, Xiong’an, is now set to become a “dream city“; this is thanks to a recent partnership between the latest mega-city and blockchain development firm ConsenSys.

International language of learning

Comprehensive studies that call for the widespread understanding and adoption of blockchain are emerging from every corner of the world. China’s Ministry of Industry and Information (MIIT) in collaboration with Tencent Holdings released a report detailing the numerous economical enhancements that distributed ledger technology (DLT) offers.

In Scotland, a paper was recently released, bullishly calling for the Scottish government and industries to rally around this tech and innovate alongside the rest of the world with it. Similarly, the United States Chamber of Digital Commerce also published a guidebook in a bid to generate discussion and understanding of virtual tokens, urging that regulatory policies need to develop sooner rather than later.

A top senior economist from the Bank of Canada also released an extraordinarily-detailed research paper describing the potential benefits of a central bank digital currency (CBDC). A US-based, world-leading IT industry trade association released another guidebook that gives focus to blockchain applications in the public sector.

Educational literature, backed by the world’s largest governments and industry representatives, is a boost to the credibility of blockchain. Perhaps they will also serve as a means for a global blockchain consensus at some point in the future.

 

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Research Paper Advocates Use of Blockchain for Public Services in Scotland

The Scottish Government has released a five-point recommendation paper regarding a robust introduction of Distributed Ledger Technology (DLT), better known as blockchain, into public services.

Public sector meets blockchain

The research report titled ‘Distributed Ledger Technology in Public Services’ published on 6 August was conducted by Wallet Services, a blockchain development specialist, which was commissioned by the Scottish Government’s Digital Directorate in 2017.

The report writes that the researchers discovered an “overwhelming international consensus that DLT will have a significant role in underpinning future digital government”.

It makes note of the “popular narrative” of DLT being a decentralizing technology, “disintermediating central institutions like governments and banks”. Despite this appeal, the study believes in the future benefits of the technology in the public sector such as streamlining of data governance, public service delivery mechanisms, economic models and economy ecosystems.

The report insists that “Scotland join the international ecosystem as an active participant”. To do so, it will need to utilize universities and businesses for small-scale projects in the Scottish public sector, with the goal of developing a Scottish vision for DLT and sharing these findings with the international community.

Five “broad” recommendations

The report offers a set of guidelines that together, will allow for this new effort to come to fruition. It covers areas such as, putting together a group of DLT representatives to drive projects under this new vision, improve knowledge and skills around disruptive technologies, engage proactively with other nations’ governments, educate leaders across multiple industries and designate leadership to a group of progressives who will work diligently to deploy DLT in the public sector

It takes note of several international countries that have completed public-sector Proof-of-Concept (PoC) projects and have integrated DLT into their systems. Estonia is the first mention in the report, which perhaps due to its relatively similar population size.

Success stories

Estonia, with just over a million inhabitants, has managed to implement e-governance to great success and according to the report, “e-Estonia” has allowed for a streamlined experience between citizens and the state. Despite its small size, the integration of blockchain technology and cryptocurrencies has revamped the country from digital identity and economy to sustaining home-grown tech startups.

Kersti Kaljulaid, President of Estonia said, “…we can make ten million payments, perform ten million requests and sign ten million contracts in just ten minutes. Even ten times larger states cannot beat us.”

It also makes note of the Netherlands, which has had eleven blockchain pilots underway since 2016, the give focus to processes and services that were in need of modernization across different governmental organizations.

This report arrives in timely fashion; Scotland finds itself in the fortunate position of being part of the United Kingdom, which is presently going strength to strength in the blockchain race. This is especially with the Bank of England completing a major DLT PoC, prestigious academic institutions offering blockchain-related courses, major cities such as Liverpool utilizing the technology to reduce carbon emissions, and other notable blockchain projects to name but a few.

 

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Walton College at University of Arkansas Joins Growing List of Blockchain Educators

The University of Arkansas (UA) is the latest addition to the growing list of blockchain education proponents having now established a Blockchain Center of Excellence at its Sam M Walton College of Business.

Proactive approach

UA is seeking to study the nascent technology and prepare its students for a future of blockchain, a technology that is experiencing incredible growth and applicable to almost every sector and industry.

In the sprouting adoption of blockchain into the mainstream consciousness, the desire to prepare the future generations is escalating. The technology is expected to disrupt many other global technologies and UA is taking the bullish approach.

Walton College Dean, Matt Waller said, “We will develop and establish research partnerships by conducting collaborative industry-university research, we will promote and enable dissemination of knowledge about blockchains, and we will accelerate industry adoption of blockchain technology.”

The new center is funded by an executive set of partners which will be limited to ten. Five have already been selected, most notably Walmart and IBM, who have deeply invested their time and funds into blockchain projects and patents.

Mary C Lacity, Department of Information Systems Professor at the Walton College and the new director of the Blockchain Center of Excellence said, “The technology is immature. Enterprises need to overcome significant obstacles to transition more blockchains out of innovation labs into live production.”

The center will be collaborating with Arkansas-based companies. It is taking a proactive approach to the study of blockchain with the intention of utilizing these relationships for practical research and business integration.

Other efforts

Educational institutions in the United States are mounting an academic response to the emerging industry, which, due to the cautious public and skeptical governmental approach to cryptocurrencies and blockchain may come as a surprise. However, now that the markets have cooled off, the monetary value of Bitcoin and cryptocurrencies comes second to the value of the underpinning tech.

Stanford University, New York University, as well as others are tackling different facets of the industry. Stanford is shooting for the business approach, much like AU who is apprehending an innovative enterprising future with blockchain.

New York University is offering a course that educates students in cryptocurrencies, which is similar to that of Berkley; DePaul University is providing smart contract and fintech-focused classes.

Other global efforts are taking place, Brazil, Denmark, Russia, and prestigious academic institutions in the United Kingdom are making hefty bids to provide blockchain educations.

If industry-wide adoption has brought blockchain to the forefront of governmental discussion, then the inroads created by academic institutions may truly be the way to break blockchain into the mainstream permanently.

 

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KPMG Study Reveals 2018 Blockchain Investment Has Already Outgunned 2017 Total

A KPMG study finds that fintech companies’ investment in blockchain technology in 2018 has already surpassed the entirety of 2017.

Capital growth

The Pulse of Fintech 2018‘ biannual study from one of the Big Four auditing and consultancy firms took a global look at the growth of fintech investments, which in the first six months of 2018 has broken past 2017 in spectacular fashion.

The study affirms that blockchain is “moving beyond experimentation”, noting that a majority of Q1 and Q2 investors in 2018 gravitated more toward established companies and organizations moving into “additional rounds of funding”. This is contrasting to 2017 which saw significant amounts of investment in startups, especially through initial coin offerings.

Venture capitalist blockchain investment so far this year has reached USD 858 million, more than 2017’s USD 631 million. These figures are bolstered by two enormous funding rounds: Circle, which raised USD 110 million and  Ledger cryptocurrency wallet, which recently raised USD 77 million.

Safwan Zaheer, Financial Services Digital & US Fintech lead for KPMG said, “There’s more VC flow available than opportunities to invest – a sign of tremendous growth in the space… Investments in blockchain related firms already doubled in the first half of 2018 compared to 2017. Blockchain has the potential to transform banking services. If banking systems were to be rewritten today they would be based on blockchain.”

The study acknowledges the versatile list of applications for blockchain technologies, which is a contributor to its growing success, especially within the financial sector. KPMG cites banking and insurance as two of the primary uses of the technology but also explains that blockchain can “enhance processes for any number of US and global businesses.”

Initial coin offerings

With regards to ICOs, the modern crowdfunding method has also seen a sharp rise, outpacing that of 2017. A similar June report released by another of the Big Four, PwC, found that a total of 537 ICOs in the first five months of 2018 have raised more than every ICO prior to 2018, with a total volume of USD 13.7 billion.

Again, a part-cause for the ICO figure exploding in 2018 is down to the EOS ICO which lasted for a whole year, raking in a record USD 4 billion, beating the previous record of Telegram’s controversial USD 1.7 billion ICO.

The Big Four have been looking at the growing industry with a piqued curiosity; in April 2018, it was reported that the firms were receiving daily enquiries into ICOs and cryptocurrencies from clients.

 

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2020 US Presidential Candidate Andrew Yang Accepts Crypto Donations

In the 2020 United States Presidential elections, Democratic Party’s Andrew Yang has announced he will be accepting cryptocurrencies for his campaign fund. This move comes with a plethora of humanist policies that echo the decentralized sentiments found at the core of blockchain technology.

Crypto donations

On 24 July, Yang declared in a Tweet that his campaign would be accepting Bitcoin, Ethereum and any other ERC20 compliant token (Ethereum network-based). In order to donate via cryptocurrency, voters will be required to verify their right to vote in the United States, after which they will be sent a wallet address.

HUGE news – my campaign can now accept Bitcoin, Ethereum and other cryptocurrencies! https://t.co/GScyqfZXLY Let’s build the future together. @Steven_McKie @JulianSarokin @yidagao @AdamDraper @mashadrokova @albertwenger @novogratz @ericbahn @RamanFrey @richardtitus

— Andrew Yang (@AndrewYangVFA) July 24, 2018

Yang will also be leveraging other modern technologies such as live video-streaming platform Twitch.tv to broadcast campaign events; the streaming website also accepts cryptocurrency tips.

The entrepreneur turned politician has some distinct concerns with new technologies such as robotics, software and artificial intelligence, believing that they will be eliminating millions of jobs over the next five to ten years.

However, contrary to his seemingly technophobic stance, he has the desires to maximize human welfare through what he calls “Human Capitalism” and create a Universal Basic Income (UBI), for every American, offering USD 1,000 a month in a policy called The Freedom Dividend.

Food for thought

The candidate may not need to look particularly far to marry the idea of UBI with a blockchain experiment called SwiftDemand. It is an attempt to create a basic income for anyone who signs up and quite simply, receives an unconditional 100 Swift tokens a day.

The project is currently making its transition on to the blockchain, officially turning the digital currency into a cryptocurrency, with the goal of trading Swift on to cryptocurrency exchanges.

Swift coins are “only worth as much as someone else is willing to pay for them”. It’s an attempt to create a balanced ecosystem, which is perfectly in tune with Yang’s primary policies.

Looking ahead

By 2020, United States regulators may have put in place strong regulatory frameworks for blockchain and cryptocurrencies, which could open up a world of possibility should a newly elected president hold values that chime with blockchain and cryptocurrencies.

A Libertarian candidate for the 2018 Wisconsin gubernatorial election has also announced that he will be accepting Bitcoin donations for his campaign. The move is controversial due to contention around the legalities of such donation, which may be something that Yang comes up against sooner than later.

Furthermore, Bitcoin is tied to an extraordinarily significant scandal in the United States. Recently, Russian hackers were in hot water for hacking the 2016 presidential race, allegedly utilizing Bitcoin to fund their operation.

 

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Wells Fargo Poll Reveals US Investors Retain Bitcoin Skepticism

Multinational financial services company Wells Fargo has conducted a poll of investors in the United States, revealing a skeptical 72% majority who “have no interest in ever buying Bitcoin” and 75% who find Bitcoin to be “very risky”.

The stats

The poll, which was conducted over a week in May 2018, consisted of 1,921 adults in the US who had USD 10,000 or more invested in stocks, bonds or mutual funds. It found that 72% had no interest in ever investing in Bitcoin, 26% were “intrigued” but won’t be buying soon, 2% owned Bitcoin and less than 0.5% would “probably buy Bitcoin in the near future”.

Naturally, the results display a contrast between age groups and genders with regards to cryptocurrency awareness; 22% of investors above the age of 50 knew of Bitcoin’s existence with that figure dropping to 16% for the 65+ age bracket.

Some 48% of those aged between 18 and 49 were aware of Bitcoin, with 41% of this age bracket being “intrigued” by Bitcoin, but would not be buying soon. Of the gender groups, 38% of men knew of Bitcoin as did 20% of women.

Bitcoin views

A factor that could have contributed to the “risky” consensus could be boiled down to a couple of particularly prominent issues. Firstly, the recent indictment of Russian hackers who allegedly utilized Bitcoin to fund their hacking attacks on the 2016 US elections is likely to play a big role.

Furthermore, according to previous Wells Fargo studies, US investors tend to avoid more risk adverse investments for retirement savings. Cryptocurrencies and Bitcoin alike are notoriously volatile markets and the 2014 study indicated that a higher guarantee of return on investment was more favorable than one with high growth potential.

Bitcoin and cryptocurrencies have traditionally been viewed as unstable, potentially unsafe and linked to malicious intent despite evidence showing otherwise. These impressions may shift should industrial and governmental adoption grow in a positive manner.

Change on the horizon?

The Gallup poll reads, “Looking to the future, however, many younger investors who currently say they are intrigued may be converted to investors once the currency goes more mainstream.”

The results may be a reflection of the present institutional and governmental sentiments in the United States; for some time, cryptocurrencies have been observed with cautious scrutiny by the Securities and Exchange Commission.

Nevertheless, efforts to bring the cryptocurrency and the underpinning technology of blockchain to mainstream prominence are underway with growing pressures from other governing entities in the United States who fear the US is falling behind, as well as from international participants and world-leading technology trade associations.

 

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Chamber of Digital Commerce Publishes ‘Understanding Digital Tokens’ for Policymakers

The world’s largest trade association representing the blockchain industry has released a white paper called ‘Understanding Digital Tokens: Market Overviews & Guidelines for Policymakers and Practitioners‘.

A guide to digital tokens

The Chamber of Digital Commerce (CDC) is based in Washington DC and is a prominent blockchain advocacy group. It is comprised of a number of initiatives that are working to promote multiple facets of the blockchain industry. This includes but is not limited to the Blockchain Intellectual Property Council, the Smart Contracts Alliance and the Token Alliance.

The latter initiative is responsible for publishing the first edition of its collaborative report; the paper offers guidance on how to nurture “responsible growth” of the digital tokens and the initial coin offering (ICO) facets of the nascent industry.

The Token Alliance has over 350 global contributors across multiple sectors, economists, former regulators, blockchain and token experts as well as law practitioners.

The three-part report covers the regulatory environment across five counties including the United Kingdom, with special regards to securities law, which is an especially debated topic in the United States. It also covers utility tokens and the “token economic landscape”.

In the report’s accompanying press release, Paul Atkins, CEO of Patomak Global Partners and former SEC Commissioner said, “These industry-developed principles are an important tool for responsible growth and smart regulation that strikes the right balance between protecting investors while allowing for innovation in this new technological frontier.”

Global acknowledgment

In the paper’s introduction, the exponential growth of industry growth over the past two years has seen blockchain technologies become recognized as a transformative and disruptive force. It must be noted that globally, banks and major financial institutions have begun adopting the technology,

Across these multiple jurisdictions, there is no entirely unified set of regulatory frameworks. Countries such as Malta and Switzerland have already established their own set of laws and legislation offering a crypto-friendly environment for blockchain entrepreneurs.

However, nations such as the US and South Korea appear to be struggling to reach consensus on how to approach virtual tokens and ICOs. The report from the Token Alliance sets out to “open the doors to creative thinking and understanding in the token ecosystem”.

A compendium of legal clarification

Perianne Boring, founder and president of the CDC said to Bitcoin Magazine, “The Chamber of Digital Commerce is advocating for regulatory clarity… “Up until now, there has been an absence of clarity on the regulatory landscape for ICOs and utility tokens.”

She describes the report as containing principles developed by the industry to be the “first set of guidelines for the token industry”. According to her, the purpose of this report is to provide clarity on a “full spectrum of laws” to businesses worldwide who are either already involved with or seeking to enter the industry.

This is the first installment from the CDC and the Token Alliance. The report concludes that in subsequent works, issues such as “utility token” concept promotion, cybersecurity and hybrid tokens could be addressed.

Other entities are also publishing documents pertaining to blockchain information and education. As recently reported, a US-based world-leading IT industry trade association released its guidebook on ‘Harnessing the Blockchain Revolution: CompTIA’s Practical Guide for the Public Sector‘.

 

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South Korean Exchanges Could Lose SME Tax Relief

In South Korea, special taxation laws for small and medium-sized enterprises (SMEs) may no longer apply to cryptocurrency exchanges.

Previously, the Restriction of Special Taxation Act included tax reductions or exemptions for SMEs or venture businesses in the range of 50% to 100% of either income tax or corporate tax in the first five years. Afterwards, this range would be reduced to a range between 5% and 30%.

Tax law revisions

A new draft bill will be submitted to the National Assembly by the end of August 2018, after which it will be opened up to debate within the parliament prior to when or if the bill will be enacted into law. If it is approved, cryptocurrency exchanges will not be eligible to request tax reduction or exemption.

A recent report explains that the government is proposing a revision to the present tax law with the intention of excluding crypto exchanges from this special tax rate. The government explained its reasoning behind the move saying, “The virtual currency transaction brokerage was not effective in generating added value.”

Should the bill pass and be legislated into law, cryptocurrency exchanges will also be obligated to operate under a code of ethics that commercial banks in the country are required to follow, which includes practices such as transaction monitoring.

Cogs in motion

Under the revised laws, cryptocurrency exchanges would officially become financial institutions, which would cause them to fall under South Korea’s Financial Services Commission (FSC). In recent weeks, the FSC has been developing a new tax credit scheme designed specifically with “new-growth technologies” in mind, which includes blockchain technologies.

It comes shortly after the Korean National Assembly saw a whirlwind of political parties submit draft bills in a bid to create the necessary regulatory frameworks for initial coin offerings (ICOs), cryptocurrency and blockchain technology.

South Korea’s financial watchdog has also established a new governing body in preparation for the Fourth Industrial Revolution. As part of the FSC, a new entity named the Financial Innovation Bureau (FIB) will be working to provide “policy initiatives for financial innovation e.g. innovative financial services using fintech or big data and responses to new developments and challenges such as cryptocurrencies”.

Hong Seong-ki, head of the virtual currency response team for the Korean FSC has been pushing to have these bills prepared and passed with haste, urging lawmakers to do so in order to better protect consumer and investors.

South Korea is at a complete turning point, and could very soon be joining the likes of Malta with world-leading and clear laws and regulations.

 

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“Dream City” International Blockchain Collaboration Between China and ConsenSys

In a world first, the Chinese City of Xiong’an will be home to a blockchain deployment program, transforming the newly-established ‘number-one urban project‘ into a “dream city”, backed by President Xi Jinping.

Mega-cities

Over the past three decades, urban development in China has been exploding; major cities have been receiving record levels of funding, and areas such as Shenzhen and Shanghai’s Pudong have been placed on a special list for development throughout the past 40 years.

Xiong’an is one of the most recent additions to the list of “mega-cities” and has been a largely underdeveloped area. In April, plans for the Xiong’an New Area were revealed as well as documents guiding the cities development through to 2035.

Bolstered by blockchain

These ambitious developments have received a rocket-fueled boost as a significant partnership between Xiong’an and blockchain development company ConsenSys.

On 23 July, ConsenSys and the Xiong’an government signed a memorandum of understanding (MoU) for the “dream city” project, marking the first time that Xiong’an has publicly recruited a foreign development studio to aid in its blockchain efforts.

Blockchain is high up on the city’s technological agenda, it is one of several technological fields that the government has listed as part of cutting-edge and can transform Xiongan into a leading tech hub for the country.

Joseph Lubin, Ethereum co-founder and ConsenSys founder said in a statement, “As one of our first major projects in the People’s Republic of China, we are excited to help define the many “use cases” that could benefit from the trust infrastructure enabled by Ethereum technology.”

According to the South China Morning Post, the full MoU has not been published, though in a statement ConsenSys wrote, it would “… follow with agreements addressing different aspects of this innovative multi-faceted initiative, and establish Xiongan as a next-generation smart city and a leading blockchain innovation hub”.

ConsenSys has several global partnerships on the go; Ireland is in partnership with the studio to develop and deploy Ethereum-based blockchain platforms and products, and the Philippines, for example, are working with the studio to bridge gaps between the unbanked and traditional financial services.

Billions upon billions

China is pumping extraordinary amounts of money into domestic blockchain developments. In April, one of the specially designated mega-cities Shenzhen was reported to be investing CNY 500 million (USD 80 million) into blockchain startups in the city in a public-private partnership.

Before that, the city of Hangzhou received USD 1.6 billion to invest in blockchain effort. The funding project has already opened a Blockchain Industrial Park with ten blockchain projects from around the world being “successfully contracted” into it.

Most recently, Nanjing City is set to receive CNY 10 billion (USD 1.48 billion) worth of investment to support public blockchain projects in another public-private fund that will support academic innovations, blockchain startups as well as established companies seeking to adopt blockchain technology.

 

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Chinese Government Not Withdrawing From $1.6B Blockchain Fund

In the midst of a scandal involving a major partner of the Xiong’an Global Blockchain Innovation Fund, a local news report that claimed the local government will be withdrawing its financial support has been denied by the fund.

Venture capital for blockchain

The fund is one of the largest of its kind in China as the country ramps up its support of blockchain initiatives, businesses, smart-cities and other blockchain related industry and institutions.

Worth USD 1.6 billion, part of the venture capital fund is coming from Tunlan Investment, a Hangzhou firm; 30% (USD 400 million) is being provided by the Hangzhou city government.

Government withdrawal

The report was published by the China Business Journal on 26 July and stated that the Hangzhou city government was demanding the fund to stop publicizing itself as a government-backed fund.

The piece refers to an “informed person close to Li Xiaolai” who made indications that governments decision withdraw came down to the aforementioned scandal, which have had negative impacts on the company and city government.

Cause for speculation

Conflict soon erupted when a public feud between Bitcoin advocate Xiaolai and venture capitalist Chen Weixing eventually led to Li’s resignation from the Xiong’an Blockchain Innovation fund, of which he was the managing partner.

Weixing accused Li of being a “fraud” and branded him “a tumor” of the industry, going so far as to accuse the Bitcoin evangelist of owing BTC 30,000 to a group of investors, a debt of which allegedly dates back to 2013.

After a period of back-and-forth responses from the pair, an audio recording from a private meeting that took place in January 2018 was leaked in July. In the leak, Xiaolai made brash comments against companies such as NEO, Ripple and Binance, which he called a “scam”. In early July, Li resigned.

Funding “not suspended”

Though the China Business Journal report had made a response denying that the Xiong’an fund was suspended, he also offered further clarification to CoinDesk that the government had not presently withdrawn or pulled out of future funding.

On 26 July, the fund also issued a statement, further denying the report saying, “There are many false reports on the report that “Xiong Fund is suspected of being stopped by the government for propaganda and investment.” Xiong’an Fund has not received any relevant notice from the government.”

Additionally, the fund says that it will continue with its original intentions, and will retain its right to “pursue legal liability for false reporting media”.

 

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