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The Promise and Regulatory Challenge of “Physical” Bitcoins

05.12.2017 jody 0

Physical bitcoins that can be exchanged like cash have been discussed for years. In 2010, Gavin Andresen himself started a Bitcoin Forum discussion on possible ways to “print out bitcoins to function as user-created paper money.” Physical bitcoins have been often implemented, but there are several challenges. Many physical bitcoin operators active a few years ago have either disappeared or don’t show signs of recent activity. Others are just novelty collectibles that don’t store actual bitcoins. But there are still some interesting options both on the horizon and on the market in the physical bitcoin space.Physical bitcoins are a real killer app for many reasons, first and foremost because they can be exchanged privately and anonymously without leaving any trace whatsoever, just like cash. Of course, this is exactly the reason regulators hate the idea and will do anything to stop physical bitcoins from spreading. Also, designing physical bitcoins with both high security and high usability is difficult.In an ideal world, simple paper wallets could be used as physical bitcoins. In fact, anyone can make a paper wallet, load it with any amount of BTC, print it out and give it to anyone. The recipient can easily check the balance before accepting the paper wallet and folding it in their physical wallet for further use, just like cash.Of course, in the real world the chain will be broken very soon. Since both the public and the private keys are nicely printed on a paper wallet, anyone can empty the paper wallet after having passed it on. This forces the very first recipient to empty the wallet themselves immediately after receiving it, but then the transaction isn’t more private than a normal bitcoin transaction between the first and the second (last) owner.It’s worth noting, in passing, that this simple chain of trust would only work among people who really trust each other. For example, members of a closed club with strong entry vetting could use bitcoin paper wallets as internal currency for goods and services exchanged within the club.In practice, physical bitcoins must have private keys (or equivalent) hidden in a tamper-proof way. One possibility is to use scratch cards like Crypto Scratch Cards (now discontinued). One of the first attempts at developing physical bitcoins, dubbed Bitbills, announced in May 2011, used a credit card-like form with an anti-counterfeiting hologram and a QR code embedded within the card, which could not be read without the card showing evidence of tampering. The project was abandoned a few months after being announced.Another possibility is to manufacture physical bitcoins with the public key visible on the outside, but the private key (or equivalent) hidden inside or by a tamper-evident seal. This method was used by late lamented Casascius Physical Bitcoins, which were discontinued in November 2013 after the Financial Crimes Enforcement Network (FinCEN), a branch of the Treasury Department, informed developer Mike Caldwell that minting physical bitcoins qualified him as a money transmitter business with heavy compliance requirements.Today, there are a few options that seems to have worked out most of these difficulties. The physical bitcoins sold by Denarium, headquartered in Finland, have a private key inside the coin and use a hologram as an anti-counterfeiting measure. “The hologram has a ‘window’ where a portion of the public Bitcoin address of the coin can be read for checking balance and loading bitcoins to the coin,” states the Denarium website. Denarium coins come in two versions, one loaded with a predefined amount, and an “empty” version that must be loaded by the users themselves by sending bitcoins to the coin’s address. Due to regulations, only empty coins can be sold to U.S. residents.All Denarium coins, including pre-loaded ones, can be reloaded by sending bitcoins to the coin’s address. A Denarium coin can be redeemed “by opening the hologram sticker and importing the private key underneath to the wallet of your choice,” reads the Denarium user guide. “Please note that an opened hologram sticker implies that the coin has been spent. The hologram sticker cannot be put back after opening so it should not be removed without the intent to spend the bitcoins.”Opendime, a tiny USB flash drive that can be loaded with bitcoin by the first user and passed along, is more of a light hardware wallet than a heavy paper wallet. Unlike most other options, the private key attached to each Opendime is generated by the device at the time of setup by the user: It is not known by anyone, not even by the first owner. Opendimes can be passed along multiple times to other users and verified; however, it can only be redeemed by the last user, who must break the device to access the private key and import it into any bitcoin wallet.A pack of three Opendimes can be ordered for $37.50. Though perhaps too technically demanding for casual Bitcoin users and too expensive for small values (the device is useless after getting the funds out), Opendimes are certainly usable as physical bitcoins. Earlier this month Fintech Select, a provider of prepaid card programs, mobile banking solutions, announced that it will be launching a test pilot project for physical bitcoins associated with the company’s Selectcoin product line. Another interesting idea, which has been discussed a few times on Bitcoin Forum (e.g. 1, 2, 3), is that of “hijacking” physical banknotes to carry a value in bitcoin. A physical bill (say a $1 bill) identified by a serial number would be assigned a value in bitcoin (say 0.1 BTC) and used as a physical bitcoin bill, with robust anti-counterfeiting measures automatically provided courtesy of the state.The idea was presented in a recent tweet by Andreas Antonopoulos. Cryptographer and Bitcoin developer Sergio Demian Lerner replied: “Not a bad idea: I proposed this seriously in 2013.”<br /> pic.twitter.com/JGvY8DvDWn&mdash; Andreas M. Antonopoulos (@aantonop) October 12, 2017<br /><br /><br /><br /><br /><br /><br />“I found one of those powerful ideas that are so simple, but so odd at first sight, that can go unnoticed,” said Lerner in his 2013 post, inspired by a Bitcoin Forum discussion. “The idea is that people could use fiat banknotes as a medium to transfer bitcoins, for offline Bitcoin payments.”Binding a value in bitcoin to the serial number of a banknote, in such a way as to permit the last bearer to redeem it, seems impossible to do in a watertight and decentralized way, but perhaps a central operator could implement a similar scheme. Lerner’s solution is simpler: “[If] we transfer some BTC to a [unspendable] output which describes the banknote (e.g. country, denomination and serial number), we could bind the BTC to the banknote forever, as long as people believe the banknote represents those ‘destroyed’ BTC,” he said. “[For] the system to work, everyone must agree that those BitBanknotes really hold the BTC value. But you can count on me: I would agree! Why not?”Lerner’s own project to develop physical bitcoins, dubbed “Firmcoin,” seems to have disappeared. But it’s plausible that new implementations of untraceable electronic cash, powered by strong cryptography and NFC-enabled smartphone apps, could resurface at any time to pose a very strong challenge to state monopolies and regulators.The post The Promise and Regulatory Challenge of "Physical" Bitcoins appeared first on Bitcoin Magazine.

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Talla Ignites New Frontiers with Blockchain Platform for A.I. Security, Compliance and Trust

04.12.2017 jody 0

An often heard narrative over the years has centered on the potential impact of artificial intelligence (A.I.) on work. According to CB Insights, last year (2016) more than $5 billion dollars of venture capital was raised by companies where A.I. is a core piece of their product—up from around $3B the year before, and $2.6B prior to that. However while A.I. technology and investments are advancing rapidly, system trust remains a commonly discussed concern for autonomous systems. Situated at the epicenter of this trend is Talla, a company that has an A.I. powered knowledge and information management platform for business teams like HR, IT and product management. Aware from the beginning that compliance, auditability and security would be a critical layer of their software—which can make decisions on behalf of humans, and learns and changes over time—Talla became the first enterprise to deliver a blockchain platform for fellow developers of A.I. software to make chatbots and digital agents meet audit and compliance standards.Known as BotChain, the blockchain platform is based on the premise that, as A.I.-based systems continue to be widely adopted, both users and products will need a technical infrastructure in which identities and transactions are verifiable and auditable. For instance, when an A.I. bot takes action on behalf of a human, such as booking travel, sharing meeting information, or compiling documentation, a digital certificate of those transactions is hashed to a ledger, so that in the event that an audit of what was authorized is needed, it’s immutably stored on the blockchain for reference. Talla believes this technology is the missing element for truly widespread A.I. adoption in business.“We will soon be in a world in which hundreds of thousands of bot  transactions occur each minute,” said Rob May, Talla CEO and author of a popular machine intelligence newsletter. “Some [transactions] are human-to-bot; others are bot-to-bot, and some even involve a series of autonomous bots. Each transaction requires an immutable digital certificate to record what happened and why. Bots in the enterprise will only grow when there are ways for them to establish trust with humans and with other bots.”May asserted that traditional APIs, intended for simple data exchange, are ill-equipped to handle autonomous systems driven by A.I. He also pointed out that the new generation of systems emerging can intelligently adapt, change and make decisions over time. He believes this new generation will help fuel the “Fourth Industrial Revolution,” a historical theme in which artificial intelligence becomes critical to how most work is accomplished. The beauty of BotChain is that it delivers critical systems that it benefits  anyone utilizing A.I. products, as well as those developing them. Another integral part of BotChain’s value is that it maintains that bot identities are verified with certainty for humans that use them, as well as to other bots. Maintaining verifiable bot identities prevents bot spoofing and spamming.BotChain’s value to the world of business and enterprise encompasses the following attributes to govern artificial intelligence:  transparency: an auditable, decentralized trail on autonomous decisions reached as well as clear retraining of machine learning models, something many current systems are missingstandardization: regulated protocols for autonomous systems which allow them to communicate and, therefore, synchronize work across the networkopen commerce: later next year, Talla will launch an open marketplace of skills that bot developers can access and add to their product offeringsThe Genesis of Talla’s Blockchain-powered A.I.Based in Boston, Massachusetts, Talla has raised over $12 million in venture capital, making it one of the best funded startups targeting A.I. autonomous agents for business. The Talla team possesses decades of experience in software building, A.I. and data science. Led by May, the leadership team includes COO Catharina Mallet, Chief Data Scientist Byron Galbraith and Chief Architect Jon Klein. During the first couple years of building their B2B A.I. knowledge management software, Talla recognized that blockchain technology would be the ideal fit for the platform’s compliance, security and audit infrastructure. In addition, the distributed nature of blockchain allowed for a tool for the entire ecosystem of developers to standardize on protocols, helping accelerate adoption and transactions between multiple intelligent agents. Though some time would elapse before they could dedicate their resources to building the BotChain platform, “the idea, once stuck in our heads, continued to grow,” said May.  The BotChain Token SaleThe token sale for BotChain’s BOT token is set to commence in early 2018. There is a total supply for 30,000,000 BOT tokens and the initial price for one BOT token will be $5 USD, though the company notes that those are subject to change. Concludes May: “Ultimately our decision to build BotChain is tied to our belief in the importance of this solution to enable long term adoption of bots in large enterprises. We invite you to read our white paper here and stay tuned as we dive into these issues in greater detail in the days ahead.” The post Talla Ignites New Frontiers with Blockchain Platform for A.I. Security, Compliance and Trust appeared first on Bitcoin Magazine.

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Three New Cryptocurrency Platforms That Help Monetize Your Time

02.12.2017 jody 0

The promise of a new economy built upon a decentralized government can offer a number of benefits to millions of people across the globe. More and more cryptocurrency platforms are being created to ensure faster, more secure payments, data protection, lower transaction fees and other advantages accessible to anyone who wishes to participate.  And as crypto platforms get more creative to offer individuals a number of rewards via tokens, a new “proof of time” protocol is emerging to help users monetize every minute of their day. Just imagine living in a society where people get rewarded for their time spent playing video games or reading articles online.This concept is exactly what three emerging cryptocurrency platforms aim to achieve. Mytime, Stream and Brave Browser are all offering tokens for the time people spend using services, creating video content and even browsing the internet. Rather than feeling like time is being wasted, these platforms are helping users — and service providers — make the most of every minute of their days.MytimeYouTube recently revealed that a billion hours are spent on its video streaming site daily. Users are also using on-demand service apps more than ever before. As a result, users spend thousands of hours each day on various apps and services. And while these platforms are benefiting greatly, users never see any tangible profits.A new cryptocurrency platform called mytime aims to change this business model. Recently launched on October 31, the open-source blockchain-based platform operates by converting time spent using a service to cryptocurrency tokens called MYTC. Users are able to spend these tokens on additional service time or on services provided by other companies participating on the mytime platform. Alternatively, users will also be able to convert these tokens to fiat currency.  As with most blockchain platforms, both parties end up benefiting. With mytime, users will earn MYTC cryptocurrency based on the time they spend using a service. The service providers partnering with mytime also have the opportunity to simultaneously earn MYTC by attracting loyal users to their platforms.Mytime’s system functions on two parallel blockchains to ensure accurate proof of time. One is used to confirm the elapsed time a user spends on a platform for a service. This cannot exceed 24 hours a day and automatically prevents users from logging the same time period for more than one service. The second records the participating company’s MYTC reward dispensation. Token transfer will then occur in users’ and service partners’ applications on the MYTC online wallet. Users can spend earned MYTC rewards on any other mytime participating sites, or the rewards can be exchanged for other cryptocurrencies on the mytime exchange.StreamThe most-followed YouTubers — those with 7 million subscribers or more — are able to earn about $300,000 for a video partnership. However, this isn’t always the case for all video content creators; even some major YouTube influencers are still unable to successfully monetize their content. This is especially disappointing considering how much time and effort goes into making YouTube video that generate millions of views.YouTube continues to reign supreme in terms of revenue though, while their users often get paid very little for their time. A new decentralized, blockchain-based token called Stream aims to change this, allowing video content creators to be fairly rewarded for their time.Launched this past September, Stream incentivizes new and existing video creators to make great content by automatically distributing newly minted tokens (directly exchangeable for any global currency) to creators based on their contributions to the ecosystem. This creates a system where, for the first time ever, video content creators are able to get paid directly for their work, without cost to viewers and without the need to rely on brand endorsements.Stream also allows livestreamers to easily and anonymously accept payments from their global audience members with extremely low transaction fees, without platform lock-in. These innovations enable a fully decentralized system where content creators earn more, viewers pay less, and the industry is no longer dependent on advertising and big-brand partnerships to survive. Brave Browser and the BATOverall, browsing the internet is one of the most time-consuming activities individuals partake in. And while millions of users spend endless hours online, even more time is spent due to the amount of ads that pop up during a browsing session.In order to solve this problem, the co-founder of Mozilla, Brendan Eich, created a niche browser called Brave. Brave’s initial business model gained much attention, as it was known for blocking all ads, as well as ad trackers shown by website publishers. This business model relied on scrubbing websites of ads and ad tracking, then replacing those ads with its own. This model was not aimed at individuals but at the anonymous aggregate of the browser’s user base. If enough people used the browser, Brave would share its ad revenue with users and content creators. Known as “Brave Payments,” this would replace existing ad revenue. Brave Payments were made with bitcoin and funded by users. Website publishers were paid from users’ virtual wallets and Brave took a 5 percent cut from each wallet. However, several complaints were issued by various online publishers around this business model, noting that this practice violated federal laws. Brave looked toward blockchain technology as an alternative to replace Brave Payments and recently launched a cryptocurrency project called BAT, which stands for “Basic Attention Token.” In order to solve the problems associated with digital advertising, Brave’s BAT aims to put a price on online users’ attention with blockchain-based tokens that will be traded among publishers, advertisers and those willing to view ads.Through this model, advertisers can provide publishers with BATs based on the measured attention on ads from users. In turn, users will also receive some BATs for participating, which can be donated back to publishers or used on the platform. In a nutshell, users are essentially being rewarded for the time they spend viewing ads online.Cryptocurrency platforms such as mytime, Stream and Brave Browser’s BAT are just a few examples of new ways digital currency is being applied to help us make the most of our time. Other similar models, like Vezt, are also starting to emerge as this concept gains traction. Finally, content creators, internet users, service providers and more are able to earn currency for time spent doing what they enjoy.The post Three New Cryptocurrency Platforms That Help Monetize Your Time appeared first on Bitcoin Magazine.

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Op Ed: “We Never Thought of That” — When Venture-Backed Companies Undertake Reverse ICOs

21.11.2017 jody 0

With well over $3 billion raised this year alone, in very little time initial coin offerings (ICOs) have emerged as a major source of venture finance. Even companies that have already raised conventional venture funding will be tempted to raise additional funds through ICOs. Although not fully intuitive, some have labeled token issuances by entities that previously obtained equity financing as “Reverse ICOs.”One prominent example of a Reverse ICO has already occurred. Recently, Kik Interactive successfully completed an ICO of nearly $100 million. With over $3 billion raised in ICOs this year alone, ICOs are not unsubstantial. What made the Kik offering far more unusual is that Kik has already raised over $100 million from venture investors. The standard documents used for angel and venture investing predate the current ICO craze and, not surprisingly, do not expressly address ICOs. Understandably, these documents are all “share-centric.” The question that needs to be addressed, therefore, is: What rights, if any, do existing investors have when their company elects to undertake an ICO? What makes the analysis particularly difficult is that, broadly speaking, there are three types of ICOs:Equity Tokens — these tokens are essentially digital shares with the issuer specifying equity participation, voting rights and other token/shareholder rights.Non-Equity Security Tokens — these tokens do not grant equity rights but under the Howey test are nonetheless classified as securities.Utility Tokens — these tokens allow the purchaser to buy products or services from the issuer.Although not the subject of this article, the U.S. Securities and Exchange Commission (SEC) has issued initial guidance with respect to the securities law status of tokens issued in ICOs. The SEC’s Chief Accountant has also put out guidance detailing some of the accounting issues raised by ICOs. This article will identify several issues raised by ICOs under commonly used SAFE, Convertible Note, Series Seed and Series A documents.Why Existing Investors Might Object to Reverse ICOsOn the surface, Reverse ICOs would seem to be a net positive for existing investors. Except for equity tokens, ICOs provide non-dilutive financing to companies. Even when tokens are classified as securities, they generally are not issued as equity  —purchasers do not have a share in the issuer, do not receive dividends and do not get voting rights. However, there are several reasons why existing investors might be concerned:Multiple “Plays” on the Same Company After a Reverse ICO, a venture-backed company will have both tokens and equity in the hands of investors. Prior to the ICO, the only way an investor could invest in the company was by buying its stock. After the ICO, the investor would have a choice of buying the stock or buying tokens.At least in the current environment, there is reason to believe that demand for tokens will be greater and drive up relative prices for tokens. Equity holders may find reduced demand for their equity. Further, if the tokens remain outstanding at the time of an exit, it is difficult to predict the impact of outstanding token pools on exit valuations in either an acquisition or IPO scenario. Impact on Follow-On Venture Funding Many venture funds make relatively small initial investments, anticipating that they will deploy significantly more capital in subsequent rounds. ICOs may reduce companies’ needs for future equity raises. As a result, venture funds may have reduced opportunities for follow-on funding.Delay or Elimination of Conversion Events For holders of Convertible Notes and SAFEs, under most currently used form documents, ICOs typically will not be considered an event that triggers a conversion. In some cases, ICOs may also delay or even eliminate subsequent equity financings. Further, in successful companies, ICOs often will raise the pre-money valuation at which conversion occurs, thereby diluting SAFE/Note holders (although conversion caps in many of these instruments may mitigate the impact).Avoiding Pre-Emptive RightsUnder the current agreement forms, tokens sold in an ICO would not trigger the pre-emptive rights of existing shareholders — thereby denying them an automatic right of participation in the ICO.Absence of Transfer RestrictionsUnder the current agreement forms, tokens sold in an ICO would not be subject to the rights of first refusal, co-sale rights and the transfer restrictions typically applicable to shareholders in venture-backed companies.ICOs Do Not Trigger Other Typical Preferred Shareholder Provisions Anti-Dilution Protection. If a company underprices its tokens, its impact on valuation could be similar to a “down round.” However, unless tokens are issued as equity, they would not trigger the anti-dilution protection clauses in the standard forms.Liquidation Preferences. If token holders are given equity participation in an issuer, the issuing documentation will need to specify where they stand in the liquidation stack. For utility tokens, if the claim against the company is viewed as contractual (i.e., the holders of a pre-payment for products/services), token holders may be unsecured creditors instead of shareholders — in which case they would rank ahead of all equity classes.Mandatory Conversion of Preferred Shares. Venture documents typically provide for mandatory conversion of preferred shares in an IPO of a specified minimum amount raised and minimum share price or approval by what is typically a supermajority of preferred shareholders. Several ICOs have raised in excess of $100 million. If these companies go public, it is possible that some may not need additional funding and may do so without a public offering of additional shares (i.e., a direct offering). However, if not all shareholders agree with the decision to go public, the mandatory conversion provision could not be utilized unless approved by a supermajority of the preferred shareholders, which in some circumstances could impede the ability of an IPO to proceed.Impact on Future Cash FlowMany ICO issuers are positioning their tokens as “utility tokens” that can be used in the future to buy the issuer’s product or service. As a result, these tokens constitute pre-pays for the future delivery of goods and services. In the future, when the products/services need to be delivered, the venture may experience cash flow issues because no new funds will be coming in to pay for the product or service.Impact of Regulatory, Tax and Accounting Uncertainty Currently, the regulatory status of ICOs is unclear. Issuance of tokens in a manner that does not comply with the eventual regulations that emerge could create liabilities for the company and/or limit its ability to issue equity in the future. In addition, the accounting and tax rules for ICOs have not been established, and as a result, there may be ambiguity with respect to several representations and warranties the company typically will need to make in future financings and liquidity events.Fiduciary UncertaintyOfficers and directors of companies have fiduciary obligations to maximize shareholder value. When companies are insolvent, these duties shift to protection of the interests of creditors. What, if any, fiduciary duties a board has with respect to token holders has not been explored. If a company is facing a decision that would benefit shareholders at a cost to token holders, do board members have any fiduciary obligation to the token holders? Investor representatives on boards of companies that have conducted Reverse ICOs will not only have to deal with uncertainty but also potential conflicts of interest if they have not participated in the Reverse ICO.Can Investors Prevent a Company from Undertaking an ICO?While it is difficult to believe that a company would undertake an ICO without board approval, in many early-stage companies, investors do not have control of the board. However, commonly used investment documents may leave shareholders with limited recourse where boards back an ICO. In general, in SAFEs and Convertible Notes, holders do not have protective rights and, as a result, they do not have the ability to prevent an ICO.The protective provisions in the Certificate of Incorporation for Series Seed financings would not provide Series Seed holders with the ability to prevent an ICO. In the NVCA Series A documents, ICOs do not easily fit into any of the matters for which the investor director’s approval is required. The same applies to the protective provisions for the benefit of preferred shareholders detailed in the Certificate of Incorporation.What Now?For blockchain startups, ICOs have become the dominant form of fundraising — far exceeding venture capital financing. Given the strength of the ICO market, “Reverse ICOs” are likely to become even more pervasive. For investors this could be very challenging. Existing form agreements in the venture space are likely to be revised to address the possibility of Reverse ICOs. However, the regulatory, tax and accounting uncertainties around ICOs may not be quickly resolved, leaving uncertainty around some of the concerns raised in this article.Revising the form agreements will not address the thousands of venture-backed companies that were financed using pre-ICO forms. For existing investors the path forward is more difficult. Where investors control the board or have blocking rights, they will have the ability to prevent ICOs or influence their terms. For other investors, particularly in early-stage ventures with founder-dominated boards, ICOs have the potential to overturn several assumptions under which early investors funded. These investors may have to wait for situations in which their approval is needed for unrelated corporate actions or their funding is necessary and leverage that position to insist upon amendments to existing investment documents to address some of the investor challenges resulting from Reverse ICOs.This is a guest post by Dror Futter. Views expressed are his own and do not necessarily reflect those of BTC Media or Bitcoin Magazine.The post Op Ed: “We Never Thought of That” — When Venture-Backed Companies Undertake Reverse ICOs appeared first on Bitcoin Magazine.

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Rublix Is Reimagining Crypto Trading

20.11.2017 jody 0

The soaring fortunes of bitcoin and cryptocurrencies is attracting massive amounts of media attention worldwide. This has led to a steady stream of traders flocking to the space amid record prices and subsequent asset returns. In some circles, this exuberance has to raise concerns about a bubble akin to the great global recession of 2008. On a weekly basis, a seemingly endless stream of new crypto projects, many predicated on little more than a hastily developed white paper and website, are being launched and creating a crowded array of options for would-be traders. Enter Rublix, a Canadian blockchain and smart contract technology startup that aims to eliminate many of the common concerns and uncertainties arising in the prevailing world of decentralized markets or speculative asset classes. Charting a course of transparency, while nurturing a world-class ecosystem of problem solvers and supporters, Rublix endeavors to create a new normal for trading performance among cryptocurrencies or any asset class. Bolstered by highly astute technology and investment experts, Rublix is actively unveiling a suite of products tied to an ambitious roadmap with a series of launch dates.The Rublix platforms are being developed in collaboration with some of the top designers and coders in the world and the team is seeking to attract professionals in the finance space who desire to actively participate in the world of decentralized markets. Its target market? Traders of any sophistication level in any industry including people who believe that cryptocurrencies and the blockchain have barely scratched the surface in terms of its growth potential.HedgeRublix’s flagship product is called Hedge, a platform which assists those who are interested in, yet unacquainted with, trading in making thoughtful, informed and educated decisions. Users will have the ability to track and mimic trades made by sophisticated investors on the platform with a verified ranking. The more accurate a trader, the higher their corresponding rank. The platform features an advanced block explorer that displays and records real-time trading predictions on the Rublix chain. The result is that novice traders will be able to rapidly assess and learn from more experienced counterparts with proven track records. “The problem with many trading platforms that allow entry level traders to follow ‘successful traders’ is that they employ a month-by-month portfolio model,” said Rublix co-founder and CEO David Waslen. “Unfortunately, portfolio growth is only one piece of the puzzle when analyzing performance. A twenty percent increase in one’s portfolio is not an accurate measure as to whether a trader is highly skilled or not. Perhaps they got lucky with one trade while the balance of their portfolio is mediocre or poor.”The goal of Rublix, Waslen added, is to change this dynamic.“Rublix, therefore, aims to expose each trading prediction both before and after the event to increase transparency and accountability,” he said. “By making each blueprint public information with blockchain immutability, we give users a secure tool that will aid in making calculated decisions on which information to trust the we hope will help them enter the cryptocurrency space and successfully trade.” Cryptocurrencies, with prevailing volatility in a marketplace that never closes, provide an abundance of opportunities for any trader. What is needed is a trusted source of advice to help professional and novice traders develop their knowledge base and hone their skills. That is why through integration with three inherent components of blockchain technology – transparency, decentralization, and immutability – Rublix’s Hedge platform debunks market manipulation while providing a trusted source of trader information.“The blockchain aids in keeping our data secure and unsusceptible to intrusion or manipulation,” Waslen said. “It’s obviously a foundational element in helping us create a reliable, unbiased data source that will allow users to make calculated decisions on how to trade appropriately. A decentralized database of users’ past trade history paired with smart contract verification will give us a significant competitive advantage over other trading networks.” Waslen goes on to note that the platform rewards users with the company’s native RBLX token on an exponential scale based on how many times they are “accurate” in their predictions. Hedge is targeted for release in Q1 2018. TradersEdgeRublix’s next product for helping new traders enter the cryptocurrency market is called TradersEdge. Set to launch in Q3 of 2018, it will feature a suite of tools that offer a similar feel and aesthetic to that of many well-known modern trading platforms. This attention to user experience is seen as a vital cog to building long-term interest and user adoption in the crypto-sphere as many cryptocurrency exchange platforms lack a user friendly interface.CenturioFinally, Rublix is building a tool called Centurio which will assist newcomers in getting up to speed with how to use cryptocurrencies for daily transactions and savings. This cross-platform solution, which doubles as a wallet and contract organizer, is targeted for release in early 2018.Unfriendly platforms, difficulties in finding trusted information and general hesitation are what limit the growth and proliferation of cryptocurrencies. Recognizing this, Rublix is laser focused on bringing a whole new cast of entrants into the marketplace by mitigating a number of common concerns that hinder adoption. Rublix’s goal is to create an environment where embracing the blockchain and owning cryptocurrencies feels second nature. The post Rublix Is Reimagining Crypto Trading appeared first on Bitcoin Magazine.

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Blockchain Coalition Seeks to Make Bitcoin Welcome in Wyoming

18.11.2017 jody 0

A group of people are on a mission to bring Bitcoin back to the state of Wyoming after unfriendly laws made it impossible to transact with cryptocurrencies there more than two years ago.The Wyoming Blockchain Coalition announced its formation this week. Its volunteer members aim to create a legal and regulatory environment in the state that welcomes cryptocurrencies and blockchain technology companies with open arms.Among the group’s advisors are Patrick Byrne, CEO of Overstock — Byrne lives in Utah but has been a Bitcoin advocate for years — a former Wyoming governor, and two deans and a computer science department head from the University of Wyoming.Outdated LawsBitcoin used to be welcome in Wyoming. But a 2015 interpretation of the Wyoming Money Transmitters Act (which the state passed in 2003, years before Bitcoin even existed) by the Wyoming Division of Banking made it impractical for cryptocurrency exchanges to operate in the state. Cryptocurrencies are not specifically included on the list of “permissible investments” within the Act, as stocks or securities would be. As a result, after learning it would have to put up huge financial backing to stay in operation in the state, Coinbase suspended its operations in Wyoming indefinitely in June 2015.   But a lot of people think the law doesn’t make sense. They see cryptocurrency as the future, and they think Wyoming would benefit from being more progressive.Caitlin Long is one of those people. Now living in New York, where she serves as chairman and president at smart contracts platform company Symbiont, Long grew up in Laramie, Wyoming.Over the summer, she wanted to give back to her alma mater. But when she went to personally fund an endowment for female engineers at the University of Wyoming, she found out the school was unable to accept her bitcoin as an appreciated asset.  Fortunately, Long was able to find a charity outside of Wyoming that could legally liquidate the bitcoin and send it to the university through a donor-advised fund.“They still got the cash, but it prompted a lot of discussion internally in the university about ‘what just happened here?’” Long told Bitcoin Magazine.Long would not disclose how much she donated, but typically, donations to an endowment are $50,000 and up. “When universities have donors that are interested in donating properties, they usually try to find ways to accept the properties,” she said.  The event prompted a lot of discussion among some of the people within the university and eventually led to the formation of a coalition aimed at educating about and advocating for the adoption of blockchain technology in the state.  Long offered up her services as an advisor member. “I’m in the business,” she said. “So I volunteered to help with both the bitcoin and the blockchain education efforts.”No Time to LoseThe coalition is moving quickly. Within a week, the group formed an LLC, sent out a press release stating its goals and launched a website. “This is very, very new, and it is happening in real time,” said Long.They have good reason to make haste. The new legislative session begins in February. If the coalition wants to push through a bill that will get digital currencies recognized as a “permissible investment” under the Wyoming Money Transmitters Act, they will need to move quickly.Currently the group is working on legislative language with local attorneys and legislators. Next, they need to educate the citizens of Wyoming and the legislators about the benefits of Bitcoin and blockchain technologies. Some of that will involve webinars and live events, as as well as organizing a dinner in Cheyenne during the legislative session.  Last year, a similar regulatory effort, Wyoming House Bill 26, did not pass, but that was due to lack of knowledge and some “unrelated political feuds,” Robert Jennings, another one of the group’s advisor members, told Bitcoin Magazine. This time around, he thinks “blockchain [technology] and cryptocurrency will stand on its own merits.” Jennings added, “There is already a groundswell of support in the state due to the rise in popularity of Bitcoin.”But, he cautioned, it will require “an extensive education campaign, which is why we formed the Wyoming Blockchain Coalition.”The post Blockchain Coalition Seeks to Make Bitcoin Welcome in Wyoming appeared first on Bitcoin Magazine.

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Now the SegWit2x Hard Fork Has Really Failed to Activate

18.11.2017 jody 0

In case there were any remaining doubts, it now seems clear that the SegWit2x hard fork will not happen.The SegWit2x project, a product of the New York Agreement signed onto by a long list of companies and miners in May, had scheduled a hard fork to double Bitcoin’s block weight limit today. And while the controversial effort was suspended by leaders of the project last week, this would not have stopped anyone else from proceeding with it. Companies like Coinbase were indeed taking into account that the SegWit2x hard fork could still happen.The Fork That Wasn’tSegWit2x nodes — most notably btc1 — were programmed to fork away from the Bitcoin blockchain this afternoon (UTC) to create the SegWit2x blockchain and a new currency, often referred to as B2X. However, not a single SegWit2x block has been mined since fork point, nor is there any indication that this is likely to happen. For all intents and purposes, there is no SegWit2x — nor a B2X.Further, software bugs in the btc1 codebase made all btc1 implementations grind to a halt even before it reached the expected fork point. While Bitcoin and SegWit2x nodes were widely expected to share a single blockchain up until block 494783 and then to go their own ways at block 494784, btc1 nodes never made it past block 494782.This is mainly because the first block on the SegWit2x chain was required to have a “base block” larger than one megabyte. This is how the chain would diverge from the original Bitcoin protocol. But due to what is referred to as an “off-by-one error,” SegWit2x blocks started to reject smaller-than-one-megabyte blocks one block too soon — at block 494,783 instead of 494,784.Moreover, another btc1 bug prevented miners from mining a big enough block when it was needed. So even if some miners did want to proceed with the fork, they accidentally wouldn’t have done so — at least not automatically. Miners would instead have had to manually configure their block weight settings, but it’s unlikely they knew about this step. Btc1 maintainer Jeff Garzik (while also denying there was a problem) has since released a patch to resolve this issue.But judging by the absence of any SegWit2x blocks, the patch hasn’t made a difference, most likely because few, if any, miners were interested in mining on the SegWit2x chain in the first place.NO2X?Despite the seeming failure of SegWit2x to take off in any way, it should be noted that there is technically no way to declare a fork like SegWit2x officially “dead” or “failed.”While unlikely, it’s always possible that the SegWit2x hard fork could proceed at some point in the future. In fact, there is no way to tell whether the SegWit2x chain is currently being mined with a little bit of hash power right now, and it is strictly impossible to foresee whether it will be mined later on. Perhaps a SegWit2x block will be found a day from now, a week from now or even ten years from now, at which point SegWit2x and B2X will technically come into existence.However, since the SegWit2x chain did not include a mining difficulty reset, it will be as hard to mine a B2X block as it currently is to mine a BTC block. Meanwhile, market support for B2X appears to be extremely low, with B2X futures trading below 2 percent of BTC. So even if miners decide to mine B2X blocks, they’d almost certainly be earning far less than they would by mining BTC. Or, more accurately, they’d spend more on electricity bills than they’d be able to earn by mining B2X. The financial incentive to mine the SegWit2x chain just isn’t there.Alternatively, SegWit2x could see a bit of a rebirth in the form of “BitcoinX” (BTX). This project, supposedly started by disappointed SegWit2x supporters, will take a snapshot of bitcoin balances at block height 494,783 and start a SegWit2x-like altcoin that offers all BTC holders the equivalent amount in BTX. Though, while this coin is arguably more viable than B2X thanks to a mining difficulty reset and more, it really is a new coin — arguably even more so than B2X would have been.The post Now the SegWit2x Hard Fork Has Really Failed to Activate appeared first on Bitcoin Magazine.

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Crypto Trading and Traditional Assets: New Options for Investors

18.11.2017 jody 0

While trading of crypto-assets is booming, some investors are looking for options to trade traditional assets like stocks via cryptocurrencies. Three new operators are among those developing trading platforms to meet this need, with blockchain-based tokens pegged to the underlying assets.AnkorusAnkorus is establishing a platform that will permit trading traditional assets, including stocks, bonds, futures, options, gold, silver, commodities, ETFs, FX and bitcoin futures with cryptocurrency. “Ankorus will establish an online exchange populated by any financial asset currently available worldwide,” reads the Ankorus white paper. “Various auditing measures will be taken to establish transparency, and customers will be able to validate that tokenised assets are fully backed and held by Ankorus.”To enable cryptocurrency holders to buy real-world financial assets, Ankorus will create and allocate tokens that are exactly value-pegged to the underlying assets in exchange for cryptocurrency. Ankorus will hold its “fundraising contribution” or “Token Generation Event” (TGE) between November 25 and December 25. The ANK token will be distributed to contributors during the TGE. “The ANK is a utility token, used for commissions, for datafeeds, professional technical charting software, webinars, financial education materials and also membership for those who wish,” Ankorus CEO John Cruz told Bitcoin Magazine. “The ANK token will be allocated during our TGE and later listed on exchanges, beginning with EtherDelta. It is an ERC20 token.”Another token, the Anchor Token, will be the asset value-pegged token, separately created to tokenize specific securities using a yet-to-be-determined technology.“Anchor Tokens will come later, after we receive the requisite regulatory approval,” said Cruz. “Anchor Tokens will be created for our customers when they wish to tokenize specific assets. For example, if a customer wishes to purchase and tokenize Apple stock, we create an Apple Anchor Token (known as AAPL.A) or simply credit the customer with them if we created one earlier.”One of the most interesting asset classes that Ankorus is targeting is that of traditional financial instruments based on cryptocurrencies, such as futures and derivatives. A few weeks ago Bitcoin Magazine reported that CME Group, one of the world’s largest derivatives exchanges, will launch a bitcoin futures product before the end of Q4 2017. In a video, Cruz explains why he considers CME bitcoin futures as a breakthrough that could soon push bitcoin’s price up to $50,000, and expresses confidence in Ankorus’s ability to offer CME bitcoin futures trading soon. It’s worth noting that Ankorus’s offering can be seen as the reverse of CME bitcoin futures: while CME will offer a traditional financial instrument tied to cryptocurrencies to investors that prefer not to hold and trade cryptocurrencies directly, Ankorus wants to make CME bitcoin futures and other traditional financial instruments available to cryptocurrency holders.One is left to wonder how Ankorus will navigate the compliance minefield, which has blocked similar initiatives before. The Ankorus team insists that they will be totally SEC-compliant and follow all KYC (Know Your Customer), AML (Anti-Money Laundering) and CTF (Counter-Terrorist Financing) regulations. According to the white paper, Ankorus intends to become a fully registered broker-dealer, acquire membership on a large and reputable exchange, follow best practices for insurance and auditing on a regular basis, and establish a compliant trading platform that will bridge the crypto and finance worlds. “By becoming a broker-dealer entity, we will get SEC blessing,” said Cruz. “Everyone else is trying to tokenize assets by not being a broker-dealer entity; this is where they run into trouble with the SEC.” “Within the team we have experience of complying with different market regulators’ KYC, AML and CTF requirements for an FX remittance company,” Ankorus COO Haldane Marnoch told Bitcoin Magazine. “PEP [Politically Exposed Persons] lists are vetted and we check against a suite of sanctions lists too. Documents supplied by our customers for proof of identity or proof of address expire and need to be renewed on a regular basis. Source of funds also needs to be proven for larger transactions.“Our team is familiar with all the provisions required for operating across multiple jurisdictions,” continued Marnoch. “We’ll use as our primary reference the standards set by the SEC and the CFTC, but naturally we’ll be implementing processes to comply with each and every market we trade in, for instance the FCA in the U.K.”“We will become a division of a Futures Commissions Merchant (FCM), expected early March, and will be able to fill orders for CME bitcoin futures at that time,” added Cruz.LAToken and Jibrel NetworkLAToken (LAT), which recently raised $19.6 million in a token sale, wants to broaden the use of cryptocurrencies in the real economy and allow cryptocurrency holders to diversify their portfolio by getting access to tokens linked to the price of real assets. The LAT platform is already operational: asset tokens can be created, listed for sale and traded on the LAT platform. At this time, tokens linked to the price of stocks (e.g., Apple, Amazon, Tesla), commodities (oil, gold, silver) and real estate are already being traded on the LAT platform. Tokens linked to artwork are soon to follow.According to the white paper, the LAT platform provides cryptocurrency holders with transparent price discovery and diversification across multiple asset classes, allowing for the creation or listing of third-party asset tokens compliant with LAToken disclosure and legal structure rules.Jibrel Network wants to provide currencies, equities, commodities and other financial assets and instruments as standard ERC20 tokens on the Ethereum blockchain. Jibrel Network’s draft white paper explains that the platform will support tokens, dubbed Crypto Depository Receipts (CryDRs), which represent ownership of an underlying traditional asset held by Jibrel. On release, Jibrel will support six fiat currencies (USD, CNY, EUR, GBP, RUB, AED) and two money-market instruments. In the future, Jibrel plans offer CryDRs pegged to a wide range of currencies, commodities, securities and derivatives. The project will hold a token pre-sale between November 27 and January 27.Both LAToken and Jibrel Network expect to be fully compliant with applicable regulations, including KYC/AML rules, and apply for relevant licenses where needed. Full compliance may prevent the companies from targeting customers in certain jurisdictions. For example, the Jibrel token sale will not be available to U.S., Chinese and Singaporean residents.The post Crypto Trading and Traditional Assets: New Options for Investors appeared first on Bitcoin Magazine.