Category Archives: Cryptocurrency

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Developers Rake in Million-Dollar Sweeteners Despite Slump

Despite slumping bitcoin prices in 2018, the cryptocurrency space has continued to see a huge development in a market lacking top-level expertise, according to an interview in the Wall Street Journal.

Ripple chief cryptographer David Schwartz pointed out that one developer on his team had recently received two USD 1 million signing bonus offers, one from a crypto startup and the other from a blockchain tech company headhunting for blockchain expertise, according to Business Insider.

According to Finder.au, 4,500 job openings with the terms “blockchain”, “bitcoin” or “cryptocurrency” in the title have been posted on LinkedIn this year, an increase up to May of this year of 151%  over 2017. This compared to 2016 when only 645 openings were posted.

The eye-watering signing bonuses for crypto and blockchain developers with just a few years of experience is unusual in any tech company, despite bonus schemes being the norm with top tech companies, according to recent TeamBlind figures. Its survey revealed that 67% of tech companies questioned received a bonus but only 11% received an amount over USD 100,000.

One of the reasons for the spike in bonuses was due to a surge in demand in December 2017, prompting exchanges to scale up their operations in order to meet customer demand, particularly as the funds were readily available to do so.

Cryptopia, a relatively small New Zealand exchange, started in 2017 with two staff members and finished with about 100, with plans to hire many more. Coinbase aims to double its headcount in 2018 with top talent, while Kraken plans to quintuple it from 200 to 1,000.

Juha Mikkola, co-founder of Wyncode Academy, a coding school, told Business Insider he knows of developers being paid double the going rate for their blockchain experience, claiming, “It’s not just tech companies that need this talent, it’s real-estate, non-profits, and banks.”

There is a shortage of talent and it’s more of a headache than Bitcoin’s volatility, according to Miha Grcar, the head of business development for Bitstamp: “Globally, the pool of talent – people with experience in blockchain and distributed-ledger technology – is somewhat limited… This is a big challenge.”

Ripple’s David Schwartz had the last word: “The hiring packages have gotten insane.”

 

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Singapore Central Bank to Revamp Regulations for Blockchain Industries

A recent consultation paper from the Monetary Authority of Singapore (MAS) makes proposals for existing regulations to be changed; this comes in light of emerging blockchain-related business practices on the city-state island.

The report comes shortly after the Singapore government and MAS made preparations to launch a pilot blockchain proof-of-concept project to conduct inter-bank payments utilizing blockchain technology.

Revamping old regulations

MAS, the central bank of Singapore has had regulations for recognized market operators (RMOs) in place since 2002, and it finds that’s the “single tier” regulatory framework fails to meet the demands of the “changing landscapes.”

“A multi-tier RMO regime with gradated requirements can better accommodate the emergence of new business models such as blockchain-based or peer-to-peer trading facilities, and lower the cost of entry for start-up operators,” writes MAS.

The proposition is to now expand the single tier into three separate tiers that cater to the needs of smaller-sized exchanges entering the market.

MAS has introduced the tiers within the RMO framework in the belief that it would allow for market operators to choose a regulatory tier that better matches “their risk profile and business model”.

Flexible regulations

Tier 1 addresses the requirements of “market operators that wish to target retail investors, but which are smaller in scope and have far less retail investor participation than traditional stock and derivatives exchanges”.  This tier is for operators that don’t pose systemic risks and will be allowed to serve retails investors should they meet additional retail investor protection requirements.

Tier 2 is aimed at market operators who already qualify under the present RMO regime but don’t pose system-wide risks and serve only non-retail investors.

Tier 3 applies to significantly smaller market operators in comparison to established exchanges; operators in this tier will be subject to more flexible capital requirements, technology risk management, and outsourcing.

The MSA explains, “This new tier is designed to facilitate new entrants that develop solutions for wholesale market participants or market operators that have reached the end of their sandbox tenure and are commercially viable, but whose businesses are not able to meet the requirements of the existing RMO regime.”

Earlier this year the MAS chief fintech officer Sopnendu Mohanty revealed his concerns regarding the speculative cryptocurrency investors. He is of the belief that it is negatively impacting on experimentation with blockchain technology.

In an interview with CNBC, Sopnendu said: “But the speculators and the people who are making money out of this speculation of the cryptocurrency (market) are perhaps negatively impacting the whole experimentation of cryptocurrency.”

Furthermore, the MAS is interestingly working on its own blockchain initiative called Project Ubin. which was announced in late 2016 and will contribute to Singapore’s overall advances toward understanding how to regulate cryptocurrencies and blockchain technologies.

 

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China Central TV Warns Off Bitcoin Investors

China Central TV has run a news story warning the Chinese public and investors about the related pitfalls of cryptocurrency, China Banking News reports.

The report, entitled ‘Blockchain Cryptocurrency Bubble Accumulates’ (区块链”代币泡沫堆积), is one of many following last years ban in China on ICOs. This report cites an investor named Yang Chao as an example of the misfortunes of crypto investing, reportedly losing tens of millions of Chinese yuan (CNY) this year on his Bitcoin investments, claiming:

“In actuality, this isn’t the first time that Yang Chao has speculated on coins… Prior to the banning of ICOs and cryptocurrency trading platforms, his losses already exceeded 2 million yuan.”

Yang Chao is reported to have suggested that the recent ICO ban has done nothing to dampen the enthusiasm of Chinese investors, and his personal reasons for continuing to invest is a result of cryptocurrencies large fluctuations, adding that investors like himself a relatively few in number.

Although Yang Chao’s continued diligence may be unusual in light of Bitcoin’s fluctuating price range this year, the report goes on to say that due to the “mad increase” in the price of Bitcoin, exceeding CNY 120,000 since its creation, “the allure of becoming rich overnight has attracted a large volume of investors”.

China banned both ICOs and cryptocurrency exchanges in September 2017, but trading by individuals has remained a murky area with many businessmen relocating to Hong Kong or Japan while still raising funds from mainland investors.

China Central TV ended its news feature with a final warning to would be investors, commenting: “The lack of openness, the lack of transparency, the instability of prices, as well as the expectation amongst investors that they will become rich overnight, has magnified risk on the virtual currency market.”

Cryptocurrencies have battled to find a place within China’s massive financial structure due to persistent government and state media pressure, but the same can’t be said for blockchain. Numerous projects are underway such as Shenzhen City government’s latest project investing CNY 500 million (USD 80 million) in blockchain startups.

 

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Parker-Fitzgerald, UK Finance Report Sheds Light on Institutional Attitudes and Approaches to Blockchain

Banks have been flocking to disruptive technologies such as Artificial Intelligence (AI), cloud technologies as well as blockchain technologies. A recent joint report from UK Finance and Parker Fitzgerald warns of the “systemic risks” attributed to the three technological innovations.

New challenges

More specifically, the three-part report goes on to identify the risks attributed with distributed ledger technology (DLT) and blockchain technology. For starters, the paper makes a note of the growing scale of “experimentation and potential adoption” within the industry; it holds the belief that blockchain technologies will require “industry scrutiny,” which is because of issues regarding privacy, scalability, security, and competition.

The paper argues that while the technologies will benefit banks as they can move away from their archaic, inefficient legacy systems, they still carry new risks. For instance, the report harbors concerns with privacy as blockchain anonymizes data such as the keys or certificates of each transaction.

This causes trouble for smaller financial institutions as the transactions will be easier to identify within a smaller network and gives them right to be “understandably concerned” running a network that allows for even their competitors to see the anonymized transaction records.

New solutions

However, it also goes on to state that “technological solutions are possible”; the implementation of ‘cross-chains could address the concerns surrounding privacy by “allowing each participant to maintain a separate bilateral chain with all other participants. To increase security and address privacy others have suggested the potential of storing data ‘off-chain’”.

Though it continues to admit that this could reduce the benefits of using the technology as using cross-chains slows “the clearing of transactions” and in the instance side-chains are used, “reducing the ability to test and confirm the veracity of information on the ledger”.

Some conclusions are made and are generally rather optimistic, acknowledging that despite challenges ahead, embracing the emerging technologies carries far-reaching benefits and will catalyze the enablement of efficiencies and new economies as detailed in the report.

Timing is everything, Poland, and the GDPR

Furthermore, the paper was published a week after Poland became the first country to move banking records on a gigantic scale onto blockchain and recently, “temporarily” suspended tax collection for digital currencies.

It also comes just days before the new EU General Data Protection Law (GDPR) guidelines around data protection were released; the legislation which has been in the works for some years is to be implemented on 25 May 2018 in all EU member states.

In the build-up to the legislation, there had been some knee-jerk responses, fear, and uncertainty, though it is argued that blockchain technology can be used to authenticate user identity as opposed to storing it, which can be a helping hand in meeting the new GDPR provisions.

It appears as though the global conversation surrounding blockchain technology is reaching a pivotal moment, one in which the global community acknowledges the validity of the tech and works hard to ensure it can be safely, securely and effectively utilized.

 

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Aussie Govt Considers Blockchain for Services, Welfare Payments

Australia’s Prime Minister Malcolm Turnbull has asked the country’s Digital Transformation Agency (DTA) to research blockchain, and how it could be used to improve government services, including welfare payments.

The Australian government has granted the agency a budget of AUD 700,000 (USD 530,000) in order to carry out an investigation into DLT, according to ITNews.

“The Prime Minister, in fact, wrote to our minister and asked us to have a look at blockchain, which evolved into this particular piece of work,” DTA chief digital officer Peter Alexander said.

The move is not entirely surprising given recent interest among financial instructions in the country, most significantly, the Australian Securities Exchange’s (ASX) recent plans to replace its current clearing and settlement system with a DLT model within the next two years.

“ASIC (the Australian Securities and Investments Commission) [was] looking at blockchain, immigration – now home affairs – was looking at blockchain and considering it, and more agencies were talking about it,” Alexander said, adding, “Lots of vendors were coming to government and talking about blockchain.”

The move is one of many focused on how the government can best leverage blockchain’s advantages, including another DTA announcement this week that the agency plans to look into how the technology can be used for making social security welfare payments to citizens.

The new plan is focused on payments by Centrelink, reports CCN. The DTA feels that there are significant advantages of delivering social security welfare to citizens over a blockchain. Centrelink, part of the Department of Health Services (DHS), is responsible for a range of payments, particularly those relating to unemployment, pensions, and health. DTA Chief executive Randall Brugeaud stated:

“Our plan is to look for use cases across the Commonwealth with an initial focus on the welfare payment delivery system, then working with our digital service standard, we’ll conduct user research a view of having a prototype by the end of the next financial years.”

Brugeaud added that the potential of blockchain to securely record transactions would be investigated, drawing on the experience of other public and private sector organizations.

As blockchain is increasingly being developed and employed in new sectors across the country, cryptocurrency is also increasing in popularity. While Australia may not be the largest market for Bitcoin and other digital currencies, it is one that is quickly growing. It is currently ranked the 13th in the world for Bitcoin trading volume.

 

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Blockchain Gains US Momentum as Ohio Examines New Bill

The US state of Ohio is currently proposing a change to state law through a bill which will legally recognize smart contracts and storage of records on a blockchain, according to Coindesk.

There are several states in the US that have adopted blockchain-associated laws. Vermont, Arizona, Delaware, Illinois, Nevada, and Tennessee are among these states. Indiana, Iowa, and Texas have taken a somewhat negative approach against cryptocurrencies or flagged them as potentially risky.

Some states have examined the governmental use of blockchain, either as isolated applications in specific or integrated government functions. Vermont, for example, recognizes data stored on a blockchain as admissible in the court system, according to Brookings.

Washington and New Hampshire have succeeded in passing some legislation and Arizona has introduced or passed regulations ranging from making signatures, transactions, and contracts on a blockchain legally valid, to allowing residents to pay their income tax in cryptocurrencies.

If Ohio becomes another blockchain state and the ‘Revise Electronic Transactions Act/blockchain/smart contracts’ bill signs into law, it will significantly pass ownership rights to those needing to store electronic information on the blockchain. Bill 300 states:

“Notwithstanding any other law, a person that, in or affecting interstate or foreign commerce, uses blockchain technology to secure information that the person owns or has the right to use retains the same rights of ownership or use with respect to that information as before the person secured the information using blockchain technology.”

Changes to the existing bill have notable inclusions in the amendment relating specifically to blockchain, making it clear that smart contracts will legally usable for legal documents.

Brookings research shows that in the past two years, a wave of states has started to shift attention to blockchain technology and explore the potential roles of the technology in public and private services.

Recently, Arizona passed a bill that allows residents of the state to use cryptocurrencies in making tax payments. Also, Wyoming passed its own bill through both legislatures early this year which exempts cryptocurrency from state property tax, potentially making it the friendliest state in the US to investors of crypto assets.

 

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Seoul Mayor Doubles down on Blockchain Pledges Ahead of Local Elections

Ahead of the Seoul mayoral elections in June, the present mayor of the South Korean capital Park Won-Soon has made manifesto pledges to increase blockchain developments, among other high-tech industries.

A progressive power

Park has been mayor since 2011 and is now aiming to secure a third term. In the past, he has put forth encouraging proposals for urban redevelopment under his aspirational ‘smart city’ plans which have been in motion as early as 2014.

As reported by local news outlet The Korean Herald, Park had highlighted “six strategic sectors that the city hopes to expand, including the Internet of Things, AI, big data, and bio-health, while creating more jobs in less affluent neighborhoods to promote ‘balanced regional development’”.

CoinDesk Korea also reported that he is doubling down on his commitment by furthering efforts to create a center for blockchain incubation in the city district of Mapo. His words will undoubtedly chime well with the swathes of millennials in South Korea who are investing in cryptocurrencies and are soon to be part of a “cashless society” pilot project conducted by the Bank of Korea.

Park’s blockchain commitment, which was announced on 20 May, is a pledge to turn the Mapo Fintech Lab into a dedicated hub for blockchain and fintech development. It is the first proposal in history from the Seoul Metropolitan Government to back blockchain technology.

South Korea appears to be moving past its skeptical views of initial coin offerings (ICOs) and cryptocurrencies at an accelerating pace. Fresh regulatory stances, taxation laws and the push to legalize ICOs have put South Korea at center stage of blockchain advancements, and Park’s propositions are putting him at the epicenter of further industry attention.

In early April, Bitcoin News reported that the mayor had announced plans to further implement blockchain technology in the capital city, citing economic benefits, savings on utilities and providing new work opportunities for the young and unemployed populace of Seoul.

S-Coin and beyond

The mayor has also put forth even bolder plans to introduce a cryptocurrency for the city. Park is working towards creating appropriate institutional frameworks for Seoul to have its own digital currency, ‘S-Coin’, which will be used in city-funded social benefits programs.

With it, he is keen to address the scrutinous views presently held by the South Korean government. Park suggests that with evidence of success, further developments will follow soon after.

In an interview with CoinDesk Korea, Park said, “As Seoul is the world’s leading city in the field of information and communications, including the Fourth Industrial Revolution, I think we should study new technologies such as blockchains.”

The news has received international attention and should the mayor attain his third term, Seoul could become the blockchain capital of the world, challenging highly favorable crypto-friendly nations like Switzerland.

 

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Crypto CEOs Are Making Moscow Home

Moscow has the highest percentage of CEOs or founders of ICO-seeking projects working from the Russian capital, claims international technology investment company Atomico.

In figures acquired in 2017, Atomico cited Russia at the top of a list of major crypto-active locations around the globe, followed by Silicon Valley, New York, and London. No Asian capitals appeared in the statistics which were posted on news website Quartz earlier this week.

Quartz writer John Detrixhe claims that Russia’s programmers leave a significant footprint in the world of cryptocurrency, particularly in ICO markets. He suggests that Russian accents are always a feature of ICO pitch competitions, although when it comes to actually raising funds, the US, Singapore, Switzerland, and the UK top the charts. Germany, the UK, and France each have more professional developers than Russia, according to Atomico. The Netherlands has many more developers on a per-capita basis.

Tech professionals, according to Detrixhe, are quick to point out that Russia is rich in programming skills and cryptography, a legacy of the old Soviet Union’s focus on science. The USSR still ranks second, behind China, in International Mathematical Olympiad wins, even though it sent its last team in 1991.

Crypto innovation is coming out of Russia because it has some of the best intellectual capital in the world, said Oliver Hughes, chairman of Tinkoff Bank, a digital lender based in Moscow. Even Sberbank, Russia’s biggest bank, behaves like a fintech firm, according to him. Sberbank reportedly has more than 11,000 developers, which is more than all the employees at Snap, Square, and Twitter combined.

After the breakup of the Soviet Union, a plethora of scientists became available and startups were an ideal home for some of these, and those with any knowledge of digital systems were ideally placed in the newly computerized Russia.

Russians today have become cryptocurrency savvy, and even Vladimir Putin is being advised to break new ground and embrace a technology which could indeed prove be a useful panacea to the ongoing US and European sanctions.

Quartz claims that there are concerns in Russia that Moscow is trying to influence the blockchain and cryptography standards in a way that allows the state to undermine it. Putin met with Ethereum creator Vitalik Buterin last year, and since then the Russian government has started to take the possibility of a central bank digital currency a little more seriously, despite a crackdown on private sector use.

If cryptocurrency is adopted in Russia by the central bank, it remains to be seen if it simply becomes a feature of overseas trade, utilized for sanction busting by the Kremlin, or made available to all. If it’s the latter, clearly, if these statistics are correct, Moscow has the technical capacity and know-how to make its domestic crypto space a success.

 

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Japan’s Largest Bank Partners with US Tech Giant for Blockchain Payment Service

The biggest bank in Japan has partnered with a US tech company to design a blockchain capable of handling 1 million transactions per second, boosting speed and reducing transaction feeds through distributed ledger technology.

MUFG and Akamai partnership

The Mitsubishi UFJ Financial Group (MUFG) partnered with US-based Akamai to deliver a new global payment network service, which is intended to be available from 2019 and will be compatible with Internet of Things (IoT) style payments and other emerging technologies.

“MUFG and Akamai, using Akamai’s globally deployed high-speed and high-security platform, will utilize this new blockchain’s high-speed processing and secure value transfer abilities to promote pay-per-use, micropayments, and other new IoT generation payment methods, and to support the diverse payment options of the sharing economy by offering an open platform,” reads the 21 May press release.

The new blockchain developed contrasts with the original cryptocurrency Bitcoin, which was built on the first blockchain in the world and can only process seven transactions per second; the distributed ledger developed by MUFG and Akamai is “permissioned”, which means that verified computers are the only ones able to join the network.

Risk and reward

MUFG and Akamai detailed the growing interest in blockchain technologies and highlighted its capacity to “strengthen protection against falsification of transactions and drastically lower costs”, as well as the fact that financial institutions across the globe are partnering with tech companies to also test proof of concept designs.

While the technology is reported to “create new risks for banks”, the Japanese financial giant has embraced it with Akamai, which according to the press release is “the world’s largest and most trusted cloud delivery platform”.

Blockchain has been receiving surging amounts of interest from governments and institutions since ICOs and cryptocurrency markets exploded in 2017. Industry heavyweights such as IBM, Amazon, Microsoft, and JPMorgan are making bold steps toward adopting the disruptive technology, which will only contribute to the future successes of the blockchain industry.

Blockchain, banking, and a cryptocurrency

Earlier in May, the Japanese financial giant reported that it had intentions of trialing its own cryptocurrency in 2019, which lines up perfectly with the intended release date for the new blockchain service.

As reported by Japanese local news outlet NHK, the fifth largest bank in the world by assets will be rolling out a trial app to approximately 100,000 MUFG account holders who can install the app on their smartphones and convert their deposits into the MUFG coin; one MUFG coin will be worth one Japanese yen. Users will also be able to use the currency wherever they so please and transfer the currency to accounts of other participants.

It is a clear indication that the global stance on blockchain and cryptocurrency technologies is shifting toward the mainstream. Should the partnership and digital currency trial be successful, it will prove a transformative moment for the industry, financial institutions and society.

 

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Spain Opens Legal Doors for Funds Investing in Crypto

Spain’s Comisión Nacional del Mercado de Valores (CNMV) or National Securities Market Commission, recently stated that investment funds could interact with Bitcoin.

The statement was within a Q&A document for fintech companies, with one of the questions asking if a fund registered by CNMV could directly invest in cryptocurrencies. The answer by the CNMV was:

“This type of funds would have a legal place in Law 22/2014, which regulates, in addition to venture capital entities, other collective investment entities of closed type and their management entities.”

Law 22/2014 funds for Spain fall into three categories: closed-end collective investment entities (EICC), closed-end investment funds (FICC), and closed-end investment companies (SICC).

All three funds must have their own conditions and requirements in order for a fund to be classified as such and, therefore, to be able to invest in cryptocurrency. And while the CMNV has made it legally possible for funds to delve into digital currencies, the possibility is only on paper. Separate issues regarding regulations and valuation of volatile assets like Bitcoin and Ethereum still exist. CMNV later states:

“The investment of FICC and SICC in cryptocurrencies raises a series of practical problems on how to comply with the regulations regarding the valuation of assets, the management of liquidity and the custody guarantee.”

The last condition eager funds should know is that this possibility may not be permanent. CMNV is only issuing this ruling until there is a European or international standard. So even if a fund satisfies all the right conditions, all of its hard work may be for naught at a moment’s notice.

Regardless, this is a massive step forward for cryptocurrencies being seen as legitimate assets in institutional trading.

Most regulated funds handling cryptocurrency do it indirectly, either through a price index, derivatives, or other market products. Few hold actual Bitcoin, Ethereum, or any other digital currency.

And while having regulated funds hold something reminiscent of a cryptocurrency, the positive implications for cryptocurrencies market and brand image are more pronounced when they’re holding the real thing.

 

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