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>>> Forget Bitcoin. Have You Heard of IMFcoin?
IMF would like its special drawing rights to have a digital future, and has spent the past year thinking of a broader role for it
By James Mackintosh
Oct. 5, 2017
https://www.wsj.com/articles/forget-bitcoin-have-you-heard-of-imfcoin-1507228382
Forget Bitcoin, think IMFcoin. The head of the International Monetary Fund has been musing about the future of money, and thinks there is a decent chance it will come from the guardian of the world’s monetary system.
Christine Lagarde, IMF managing director, held up the organization’s special drawing rights (SDRs) as having a possible digital future at a Bank of England forum last week, and put what she said was a “question mark” over whether SDRs could replace existing international currencies. “It’s not a far-fetched hypothetical,” she said, and the IMF needs to be ready.
The SDR is a long way from the digital disruption that cypherpunks hope cryptocurrency can deliver. Dreamed up in the 1960s, SDRs are a kind of artificial currency whose value depends on other currencies. Dollars are a part of it, but so are euros, sterling, renminbi and yen. An SDR is a bit like a currency mutual fund for central banks.
Pounded
Sterling fell as it lost reserve currency status to the dollar from 1914 onwards
For decades it has been an afterthought in the global financial system, but the IMF has spent the past year thinking about how to give SDRs a broader international role. So could some sort of crypto-SDR eventually replace the dollar as the world’s money?
The idea has heavyweight support from those who want to diminish the dollar’s status, notably in China. People’s Bank of China Governor Zhou Xiaochuan called in 2009 for wider use of the IMF’s money to “gradually replace existing reserve currencies with the SDR,” one reason for the latest review.
The reasons are well-rehearsed, and not digital. China—and other emerging markets—would like to diversity their risk away from dollars. They also worry about the inherent problem of using national money for global reserves. When the U.S. faces a conflict between domestic and international needs, it is likely to favor its voters over the world economy.
Buck's the System
The dollar's reserve-currency status means it often strengthens in a recession
So what would digital SDRs add? When monetary economists are drawing up dream scenarios, they often come up with something similar to the “bancor” presented by John Maynard Keynes at the 1944 Bretton Woods conference. International trade would be conducted in bancors with rules about the size of overdrafts allowed, preventing imbalances getting too big.
SDR or IMFcoins would allow a much wider group to use the currency, supplanting the dollar in international trade and reducing both the big currency swings that can destabilize countries and the dangers of large current account deficits. Instead of representing a basket of currencies, the digital SDR would be a currency of its own, albeit one only used for international transactions.
A more limited alternative would try to speed global growth. At the moment, countries hold big piles of dollars as a form of insurance against a balance of payments crisis, damping growth and distorting the world economy. If the IMF was empowered to act more like a global central bank, whisking up new SDRs on its own blockchain in a crisis, it would reduce the need for countries to hold reserves.
José Antonio Ocampo, a Colombian central bank board member also on the IMF’s expert group considering the future of the SDR, thinks annual SDR issuance could be worth $200 billion to $300 billion a year.
“Countries would not have to accumulate reserves, [which] generate a general contractionary effect on the global economy,” he says.
The prospect of giving the IMF the ability to execute global helicopter drops of money worries believers in strong currencies.
No Cross of Gold
Since President Richard Nixon broke the dollar's link to gold, the price has risen.
Jim Rickards, an author and former general counsel for failed hedge fund Long-Term Capital Management, thinks SDRs will be issued to reflate the system in the next crisis, hurting the dollar’s reserve status. “It’s all converging on a world where the dollar will just be a local currency like the Mexican peso,” he says. He is a longstanding advocate of using gold to back money to limit the supply.
The real opposition to an IMFcoin is likely to come not from fans of gold, but from defenders of the dollar’s central role in the global system. Sterling once held the role of global reserve currency, and spent decades in decline once it was abandoned in favor of the dollar, reducing demand for pounds.
The benefit of having the reserve currency is obvious, and much-envied: Americans can offer to buy real things from the rest of the world with money the Federal Reserve creates out of nothing, and other countries have little choice but to accept. The U.S. gets lower interest rates than it otherwise would and can run a permanent current-account deficit with impunity—just so long as it remains the reserve currency.
There is a downside to having the reserve currency, though. The purchase of dollars by the rest of the world makes it harder for the U.S. to devalue to support its own economy. When the banking crisis hit in 2008 investors piled into the reserve currency, and the dollar soared 21% against its trading partners before the panic abated in March 2009. Instead of the weaker currency central banks usually aim for in a recession, the U.S. got a stronger currency.
There is little chance U.S. politicians will want to give up what a French finance minister once called the “exorbitant privilege” of the dollar, no matter what Ms Lagarde, another former French finance minister, might suggest. As she noted, the IMF would need a “geopolitical situation that would be propitious” for the changes she is speculating about to happen.
China wants it, and has been encouraging the issuance of SDR-denominated bonds to try to create a true alternative to the deep and liquid markets of the U.S. (China’s had little success so far, with only two SDR bonds outstanding, according to Thomson Reuters). Ms. Lagarde’s paean to the future suggests she likes the idea. Luckily for those holding dollars, the geopolitical situation is still tilted in favor of the U.S., and there is little prospect we all be trading in IMFcoins any time soon.
<<<
$DIGAF awaiting that reversal for huge news. Bitcoin just popped on yearly pivot support. Crypto stocks looking to boom.
China and Russia are building their own crypto currencies and an encrypted digital ledger to exchange them. This system will be denominated in SDRs (Special Drawing Rights, the global currency of the IMF), and will be free of US interference and sanctions. Net trade balances can be periodically settled in physical gold.
James Rickards explains (starts at 42:50) -
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https://blockchainsuperconference.com/speakers/mike-lorrey/
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>>> There Is No Such Thing as Cryptocurrency
By James Rickards
May 16, 2018
https://dailyreckoning.com/no-thing-cryptocurrency/
There Is No Such Thing as Cryptocurrency
The next time someone talks to you about blockchain or cryptocurrency, you should politely say to them, “There is no blockchain and there is no such thing as cryptocurrency.”
They’ll look at you funny, as if you’ve been living under a rock or just don’t get the latest thing in technology. Now you’ve got them where you want them.
You then go on to explain, “There is no blockchain. There are thousands of blockchains. There is no single cryptocurrency. There are thousands of cryptocurrencies. And they’re all different!”
That last point is the critical one — “They’re all different.”
It’s the same way you would think about stocks. It may be interesting if the stock market went up or down today, but what you really care about is your particular portfolio of stocks.
If you own IBM (IBM), Walmart (WMT) and Amazon (AMZN), then you care about those stocks. If Boeing (BA) went down, that’s too bad for Boeing holders, but it has no impact on you if you don’t own it.
And no one believes that Walmart and Boeing are interchangeable. They’re completely different companies with diverse business models and revenue prospects.
That’s important to bear in mind because too much of the cryptocurrency discussion these days focuses on generalities and broad-brush statements without drilling down on the particulars.
My readers know that I consider bitcoin (BTC) a dead-end cryptocurrency and would not hold it in a portfolio.
Yet I’m convinced that blockchain technology, or what we call distributed ledger technology (DLT), has a bright future. And cryptocurrencies that perform useful functions in an efficient manner on DLT platforms have a bright future as well.
The key to reaping gains from those potentially successful cryptos involves diligence and research as well as finding the right entry point for an investment.
Generally speaking, the new early-stage cryptos have better prospects than some of the well-known names because developers of the new cryptos have learned from the mistakes of the pioneers.
If you’re a golfer with a foursome on the green, you know it’s advantageous to putt last because you can “go to school” on the missed putts of your partners. You’ll watch their putts, read the quirks on the green and improve your own putting.
It’s the same with cryptos.
The early coins had problems of scalability, sustainability and processing time. That’s why they are dead ends. The newer coins solve many of those problems with improved governance models for validating the ledger and layering solutions for improved processing time.
The new cryptos “went to school” on the mistakes of the old ones.
A second wave or new generation of cryptocurrencies is now emerging with better governance models, more security and vastly improved ease of use.
These new-wave coins represent the future of the cryptocurrency technology. These cryptos have much greater potential to disrupt and disintermediate established payments systems and financial intermediaries such as banks, brokers and exchanges.
It is critical that investors have a robust and reliable method for distinguishing between the dead-end cryptos such as bitcoin and the new-wave cryptos with a chance to disrupt banks the way Uber disrupted taxis or Airbnb disrupted the hotel industry.
Regards,
Jim Rickards
for The Daily Reckoning
<<<
>>> The Empire State Moves Against Bitcoin
By James Rickards
April 18, 2018
https://dailyreckoning.com/empire-state-moves-bitcoin/
The Empire State Moves Against Bitcoin
Bitcoin got hammered yesterday after New York Attorney General Eric Schneiderman announced an investigation into some of the major cryptocurrency exchanges.
I’ve been warning about a coming government crackdown on bitcoin for several months, and now we’re seeing it happening around the world.
From China to Japan to South Korea and here in the U.S., the regulators are closing in on bitcoin. And all those who thought their bitcoin was invisible to the IRS are getting a rude awakening these days.
Bitcoin was the classic bubble. Market bubbles are nothing new. In the 17th and 18th centuries we had the Dutch tulip bubble, the French Mississippi bubble and the U.K.’s South Sea bubble.
The 19th century saw bubbles in canal building (1830s), gold (1869) and railroads (1890s). In the 20th and 21st centuries we have seen bubbles in Florida real estate (mid-1920s), stocks (late 1920s), dot-coms (2000) and mortgages (2007).
All of these episodes of investment mania crashed, causing enormous losses for investors. As always, some investors got in early and got out before the crash and walked away with their winnings. But most did not.
Analysts should remind themselves that those bubble winnings of the lucky few represent not wealth creation or rewards for hard work, but a simple wealth transfer from a mass of latecomer losers to a lucky few winners.
That’s hardly a desirable model for finance in particular or society as a whole, not least because the end result destroys confidence in markets and retards normal financial functions for a full generation.
The latest bubble, of course, is bitcoin. Last December as bitcoin was making its way higher from $8,000, I said that bitcoin might go to $20,000 (it did), but that it would surely come crashing down sooner rather than later.
I based this forecast on a Nasdaq chart showing the dot-com bubble of 1996–2000. The hyperbolic rise in the price of bitcoin and dot-com stocks was a close fit, which made the subsequent crash easy to see coming.
Now that bitcoin has crashed more about 70% based on recent lows, the resemblance to the Nasdaq dot-com episode is even more dramatic.
The biggest difference is that the bitcoin rise and fall happened 15 times faster than the Nasdaq collapse. A projection of bitcoin at $2,000 is easily justified.
My own projection is much lower, but either way economic historians will look back on the bitcoin episode as the greatest bubble since the Dutch tulip bubble, maybe greater.
At least with the tulip bubble, the last investors got to keep the tulips. With bitcoin, investors will end up with nothing.
Goldman briefly flirted with cryptocurrencies but eventually came around to the view that cryptos like bitcoin suffer from too many problems.
All of the cryptocurrencies that rely on clunky “proof of work” to validate their blockchains, such as bitcoin, are heading for the scrap heap. They are too slow, too cumbersome and too expensive to compete with Visa, Mastercard and PayPal in the payments space.
The only use case for bitcoin is to support criminal transactions, and even criminals have moved to some other cryptos because they have better security and privacy features. Bitcoin also suffers from slow processing times and other inefficiencies.
Goldman’s assessment is mostly right. However, some coins will survive. And as I’ve argued before, blockchain technology has a bright future.
Goldman also admits that blockchain technology has a future, but caution is indicated because processing speeds are still not as fast as existing systems. The bottom line is don’t invest in cryptocoins but invest in blockchain technology instead.
Regards,
Jim Rickards
Managing editor, The Daily Reckoning
<<<
>>> The SEC Lowers the Boom on Bitcoin
By James Rickards
March 8, 2018
https://dailyreckoning.com/103492-2/
The SEC Lowers the Boom on Bitcoin
I’ve warned repeatedly that government regulators would be putting the squeeze on bitcoin and other cryptocurrencies.
Well, the noose just got tighter.
The Securities and Exchange Commission (SEC) announced yesterday that bitcoin and many other cryptocurrencies meet the government’s definition of a security and are therefore subject to regulation. Importantly, crypto exchanges must register with the SEC.
Here’s what the SEC said:
If a platform offers trading of digital assets that are securities and operates as an “exchange,” as defined by the federal securities laws, then the platform must register with the SEC…
The SEC staff has concerns that many online trading platforms appear to investors as SEC-registered and regulated marketplaces when they are not.
Bitcoin fell about 10% on the news, back under $10,000. That’s less than half its December 2017 highs around $20,000.
Yesterday’s announcement follows action the SEC took late last month, when it issued a number of subpoenas and information requests to companies dealing in the crypto markets.
Christian Catalini, a professor at MIT, estimates that $270–317 million of the money raised by coin offerings has “likely gone to fraud or scams.”
“We’re seeing the tip of the iceberg,” said Dan Gallagher, a former SEC commissioner, adding, “there is going to be a ton of enforcement activity.”
I agree, and I’ve been saying that for months. But it’s not just U.S. regulators that have made the news.
Shortly after the SEC announcement, Japan’s Financial Services Agency ordered two exchanges to suspend activities for a month. It also penalized four other exchanges.
Japan’s crackdown comes a month after the Tokyo-based exchange Coincheck lost about $500 million in a massive cybertheft.
The bottom line is the bitcoin fans who mock the government and play “catch me if you can” are finding out the hard way that the government has the resources to track them to the ends of the Earth.
Besides the SEC, I explained last week how the IRS is also cracking down on bitcoin. It’s already demanding all records of cryptocurrency transactions from cryptocurrency exchanges including names, addresses, Social Security numbers and bank account information about their clients.
One man got a very nasty surprise when he received an IRS Form 1099 from Coinbase, a major U.S.-based cryptocurrency exchange (not to be confused with Coincheck).
It informed him that he owed $2.4 million in taxes, despite his estimate that he only put $8,000 into cryptos. He decided to sit tight in the belief that he does not owe the taxes.
Big mistake.
The IRS will take its copy of the 1099 (the IRS also receives a copy) from the exchange and assert that this man does owe the taxes. The IRS puts the burden of proof on the taxpayer to show they don’t.
Courts have backed up the IRS on this burden-of-proof approach. Just ask Al Capone, the notorious gangster who went to Alcatraz not for extortion and murder but for not paying his taxes! This guy will find this out the hard way how the IRS plays hardball, as will millions of other crypto customers.
The IRS is warming up for a bonanza of tax claims. Cryptocurrency traders who thought they could hide their gains from the IRS should get ready for the mother of all tax nightmares.
Coupled with the latest SEC crackdown, the noose is tightening on bitcoin.
Regards,
Jim Rickards
for The Daily Reckoning
<<<
>>> Big Brother Is Coming for Bitcoin
By James Rickards
March 8, 2018
https://dailyreckoning.com/big-brother-coming-bitcoin-2/
Big Brother Is Coming for Bitcoin
Many advocates of bitcoin and other cryptocurrencies have a naïve belief that their digital assets are “beyond the reach of governments,” “cannot be traced” and “cannot be frozen or seized.”
They’re beginning to learn otherwise.
When it comes to bitcoin, I take a laissez-faire approach. Do your own thing. If you want some bitcoin in your portfolio as part of a diversified bundle of assets, that’s up to you. If you want to speculate in some of the other lesser-known cryptocurrencies, that’s fine, too. You might make a lot of money (I actually recommend one small crypto myself).
My only advice is buyer beware. You need to take the time to understand how it works and what the risks are.
The technology behind cryptocurrencies is usually called the “blockchain,” but a more descriptive term now in wide use is “distributed ledger technology,” or DLT.
There’s no denying that fortunes have been made and still will be made in various DLT applications. While I’m not necessarily a fan of individual cryptocurrencies, I am a believer in this technology.
And here’s the thing:
Governments don’t want to kill the blockchain; they want to control it.
Governments enjoy a monopoly on money creation and they’re not about to surrender that monopoly to cryptocurrencies like bitcoin.
But governments know they cannot stop the technology platforms on which the cryptocurrencies are based. Blockchain technology has come too far to turn back.
They seek to do so using powers of regulation, taxation, investigation and ultimately more coercive powers, including arrest and imprisonment of individuals who refuse to obey government mandates with regard to blockchain.
Governments, regulators, tax authorities, and the global elite are moving in for the crypto-kill. The future of bitcoin may be a dystopia in which Big Brother controls what’s called “the blockchain” and decides when and how you can buy or sell anything and everything.
Furthermore, cryptocurrency technology could be the very mechanism used by global elites to replace the dollar based financial system.
In 1958, Mao Zedong, the leader of the Communist Party of China and China’s dictatorial leader was confronted with demoralized intellectuals and artists who were alienated by Communist rule. As a policy response, he declared a new policy of intellectual freedom.
Mao declared, “The policy of letting a hundred flowers bloom and a hundred schools of thought contend is designed to promote the flourishing of the arts and the progress of science.”
This declaration is referred to as the “Hundred Flowers Campaign” (often misquoted as the “thousand flowers campaign”).
The response to Mao’s invitation was an enthusiastic outpouring of creative thought and artistic expression.
What came next was no surprise to those familiar with the operation of state power. Once the intellectuals and artists emerged, it was easy for Mao’s secret police to round them up, kill and torture some, and send others to “reeducation camps” where they learned ideological conformity.
The Hundred Flowers Movement was a trap for those who placed their trust in the state. It was also a taste of things to come in the form of the much more violent and comprehensive Cultural Revolution of 1964–1974 in which all traces of Chinese bourgeoisie culture and much of China’s historical legacy were eradicated.
Something similar is going on with bitcoin and the Distributed ledger technology (DLT) today. Governments have been patiently watching blockchain technology develop and grow outside their control for the past eight years.
Libertarian supporters of blockchain celebrate this lack of government control. Yet, their celebration is premature, and their belief in the sustainability of powerful systems outside government control is naïve.
Blockchain does not exist in the ether (despite the name of one cryptocurrency) and it does not reside on Mars. Blockchain depends on critical infrastructure including servers, telecommunications networks, the banking system, and the power grid, all of which are subject to government control.
Last year, a group of major companies, all regulated by government, announced a joint effort to develop an open-source blockchain as a uniform standard for all blockchain applications. The group includes JPMorgan, Wells Fargo, State Street, SWIFT, Cisco, Accenture, the London Stock Exchange and Mitsubishi UFJ Financial.
That’s not exactly five guys in hoodies working in a garage. That’s a sign of the corporate-state consortium taking over.
An elite U.S. legal institution called the Uniform Law Commission (ULC), that proposes model laws intended for adoption in all fifty states, also released a proposal called the “Uniform Regulation of Virtual Currency Businesses Act.”
The ULC released a final version of the Uniform Regulation of the law on October 9, 2017. No state has yet adopted the law yet, but several state legislatures are expected to take it up this year.
This new law will not only provide a regulatory scheme for state regulators, but will also be a platform for litigation by private plaintiffs and class action lawyers seeking recourse against real or imagined abuses by digital coin exchanges and facilities. Once litigation begins, anonymity is the first casualty.
Perhaps most portentously, the International Monetary Fund (IMF) has weighed in. In a special report dated June 2017, the IMF had this to say about blockchain:
“Distributed ledger technology (DLT), in particular, could spur change in the financial sector. …. DLT can be categorized as “permissionless” or “permissioned” depending on who can participate in the consensus-driven validation process. Permissionless DLTs allow anyone to read, transact on, and participate in the validation process. These open schemes (that underlie Bitcoin, for instance) could be very disruptive if successfully implemented. By contrast, in permissioned DLTs, the validation process is controlled by a pre-selected group of participants (“consortium”) or managed by one organization (“fully-private”), and thus serve more as a common communications platform.” (emphasis added).
IMF releases require expert translation because they are never written in plain English, and the real meaning is always hidden between the lines. But, the thrust of this report language is clear.
The IMF favors “permissioned” systems over “open schemes.” The IMF also favors control by a “pre-selected group of participants” or “one organization,” rather than allowing “anyone” to participate.
This paper should be viewed as the first step in the IMF’s plan to migrate its existing form of world money, the special drawing right or SDR, onto a DLT platform controlled by the IMF. In time, all other forms of money would be banned.
These and other developments all point toward an elite group including the IMF, JPMorgan, the Davos crowd, the IRS, SEC and other agencies converging to shut down the existing free-wheeling blockchain ecosphere, and replace it with a “permissioned” system under “consortium” control.
Big Brother is coming to the blockchain.
Regards,
Jim Rickards
for The Daily Reckoning
<<<
>>> Best Bet in Crypto Now Is “Pick and Shovel” Names
By James Rickards
February 28, 2018
https://dailyreckoning.com/best-bet-crypto-now-pick-shovel-names/
Best Bet in Crypto Now Is “Pick and Shovel” Names
My readers know I’m not a bitcoin proponent. I don’t deny that it’s made some people a lot of money. But even with the recent pullback, I believe bitcoin is a massive bubble.
But I’ve also stated my belief in blockchain technology, which is the technology behind bitcoin and other cryptocurrencies. There’s great promise here.
And despite what some critics may claim, I’m not some technophobe who doesn’t understand the technology underlying cryptos.
I know it very well. I’ve been studying cryptos since before many of their current owners even heard of bitcoin. I actually worked with the intelligence community years ago to counter ISIS’s use of cryptocurrencies to bypass the international money system.
And in my opinion, bitcoin’s hype has run far ahead of reality. But again, I also believe blockchain technology is for real and has great potential. So just because I’m not a bitcoin cheerleader doesn’t mean I’m opposed to all blockchain-based cryptos.
Let me explain my position a little more…
One of the most familiar metaphors on Wall Street is the distinction between gold miners and those who supply the gold miners with the picks and shovels needed to mine. The classic 19th-century version from the California Gold Rush of 1848–1855 is a prime example.
First comes an unexpected gold discovery. Next comes the “gold rush,” when prospectors pour in from all over the world, stake their claims and begin mining gold. Some make huge discoveries of “gold nuggets as big as your fist!” Those miners can get rich quick and retire early.
But that’s not the typical case. More often the ore is of poor quality, the sluice has little to show and the miner runs out of time and money and walks away broke. The abandoned claim sits idle waiting for the next gold rush or optimistic newcomer.
Meanwhile, all of the miners — both rich and poor — need equipment and supplies. It starts with picks and shovels but also includes clothing, lamps, oil, food, dynamite and more.
Entrepreneurs set up to supply those needs.
The most famous such entrepreneur was Levi Strauss, who headed to San Francisco during the California Gold Rush to establish a dry goods business selling clothes, boots and other items needed by the miners.
The point is that the suppliers of “picks and shovels” make money from the successful and unsuccessful miners. Every miner needs clothes and food whether he discovers gold or not.
Something similar is going on in the cryptocurrency space today.
There are over 1,000 cryptocurrencies in circulation. Some, such as bitcoin, have produced quick riches for a few and huge losses for many more who jumped in at prices above $12,000 all the way up to the all-time high of $20,000.
Bitcoin can be likened to a gold strike with a few big nuggets lying in a stream but not much below the surface to sustain it in the long run.
Most cryptocurrencies have little or nothing to offer. Investors in those “gold mines” will go home empty-handed.
But some cryptocurrencies, particularly those that meet my COINN criteria, described below, have excellent long-term prospects.
Those will be like the Homestake Mine in Lead, South Dakota, that produced gold for its owners for over 100 years.
Meanwhile, there’s a pick-and-shovel aspect to cryptocurrencies as there is to gold mining. To be successful, a cryptocurrency needs a practical use case, efficient processing and a robust validation scheme.
Success also requires adoption by major enterprises such as banks, NGOs, or industry consortia in energy, agriculture, transportation or other major economic sectors. Important developments come not from garage startups but from the major technology companies such as IBM, Intel, Oracle and Siemens.
The more radical crypto advocates may insist on so-called “trustless” systems that offer peer-to-peer transactions without intermediation. The reality is that there are no trustless systems. Even bitcoin requires holders to trust that 51% of the miners won’t validate a block that wipes out their bitcoin, or that bitcoin exchanges are not roach motels set up to steal investors’ money.
With transaction costs high, validation slow and environmental waste from electricity usage nonsustainable, bitcoin’s days are numbered.
Meanwhile, large enterprises with billions of dollars to spend on R&D and implementation are interested in distributed ledger solutions to concrete business problems.
A second wave or new generation of cryptocurrencies is now emerging with better governance models, more security and vastly improved ease of use. These new-wave coins represent the future of cryptocurrency technology. These cryptos have much greater potential to disrupt and disintermediate established payments systems and financial intermediaries such as banks, brokers and exchanges.
It is critical that investors have a robust and reliable method for distinguishing between the dead-end cryptos such as bitcoin and the new-wave cryptos with a chance to disrupt banks the way Uber disrupted taxis and Airbnb disrupted the hotel industry.
That’s exactly what my team and I developed over the past year. Our analytic method is called COINN. Those initials stand for:
Consensus
Open Source
Impenetrable
No-Nonsense Governance and
Nimble
Let’s take those one at a time to show how you can use the COINN method to distinguish between cryptocurrencies that will soon hit the wall and those with a bright future.
Consensus refers to the fact that participants in a cryptocurrency community are able to select the trusted parties who will perform the blockchain validation function.
This works organically in the same way that Google determines which pages are most sought after for a given search request or Wikipedia determines which content to display from among a community of editors and contributors. It avoids the “dictatorship of the miners” that bitcoin forces on users today.
Open Source refers to the fact that the source code for the relevant blockchain is freely available to all participants. This eliminates closed communities such as a central bank “FedCoin” or an IMF-sponsored “SDRCoin” and other permissioned systems.
Impenetrable refers to the security of the relevant blockchain. The bitcoin blockchain is vulnerable to attack by a cabal consisting of 51% of the total mining capacity for bitcoin. Such a group could create a block that steals all existing bitcoins and then validates that block. Your bitcoin would simply disappear with no recourse, and the malevolent miners would control any amount of bitcoin they desired.
Other types of threats include “Sybil” attacks (so-called after the story of a woman named Sybil who suffered multiple personality disorder). In a Sybil attack, a malevolent actor clones itself on a governance whitelist in order to obtain disproportionate voting power that can be used to steal coins. An efficient coin would be immune to such attacks.
No-Nonsense Governance refers to the technical method for validating a blockchain. Bitcoin today relies on clunky proof-of-work in the form of uninteresting math problems that require nonsustainable amounts of processing power and electricity consumption to solve. This is massively wasteful and inefficient.
Ether requires proof-of-stake, which is wasteful in different ways and excludes white hats who will support honest validations but who may lack the resources to establish proof-of-claim. An efficient coin would allow reliable validation without such wasteful effort.
Nimble refers to the ease of use of the coin. Existing cryptos are too slow, too cumbersome and too expensive to compete with Visa, MasterCard and PayPal in the payments space. The only use case for bitcoin is to support criminal transactions, and even criminals are moving to monero and spectrecoin because they have better security and privacy features.
The same criticism about slow processing times and other inefficiencies also applies to popular cryptocoins such as ether and ripple.
Unless a cryptocurrency can offer payments transactions that are easier, faster and cheaper than existing systems such as Visa and MasterCard, it has no future as a currency. The new-wave cryptos do offer this ease of use.
Older cryptos don’t even come close.
Companies that can create or support cryptocurrencies or smart-contract tokens that meet my COINN criteria are the future of the blockchain.
I myself have argued that blockchain technology has a bright future, even though I believe bitcoin does not.
The bottom line is, don’t invest in older cryptocoins that don’t meet my COINN criteria.
Regards,
Jim Rickards
for The Daily Reckoning
<<<
>>> The IRS Comes for Bitcoin
By James Rickards
February 28, 2018
https://dailyreckoning.com/irs-comes-bitcoin/
The IRS Comes for Bitcoin
A lot of bitcoin advocates sold the idea that it was invisible to the IRS. Well, not really, I said all along. And now that’s becoming evident, as you’re about to see.
I was reminded of a story from about 15 years ago…
A Swiss banker loaded all of the confidential information on Americans with Swiss bank accounts that he could find onto a CD-ROM. He then flew to the United States and handed the information over to the U.S. Treasury and the FBI.
The banker was in trouble for helping Americans evade taxes, and this was his play to avoid prosecution. He blew the whistle on his clients. What ensued was a 10-year manhunt by U.S. tax authorities to find the tax evaders and many more whose information was not included on the original CD.
The U.S. played rough not by chasing the individuals but by putting pressure on the Swiss banks themselves. The big Swiss banks like UBS and Credit Suisse have huge capital markets and wealth management operations in the U.S. The U.S. told those banks they could either hand over the information or we would shut down their U.S. operations.
They handed it over.
Some of the tax evaders got lawyers, turned themselves in and paid their taxes (plus interest and penalties) to avoid jail time. Others waited and ended up in jail. Today, if you go to Switzerland and try to open a bank account, they will turn you away; they have zero interest in taking on U.S. clients.
Now something similar is happening in cryptocurrencies.
The bitcoin fans who mock the government and play “catch me if you can” are finding out the hard way that the U.S. government has the resources to track them to the ends of the earth.
The IRS is already demanding all records of cryptocurrency transactions from cryptocurrency exchanges including name, address, Social Security number and bank account information about their clients.
Consider the latest developments…
IRS Form 1099 is the form used to report most income other than regular wages that go on the W-2. The person paying the income — it could be a bank, broker or any supplier — files a copy of the 1099 with the IRS and sends one to the income recipient.
It’s the recipient’s job to report the income on their tax return. IRS computers match 100% of the 1099s they receive with what taxpayers put on their tax returns. It’s a kind of computerized audit. Those who don’t report the income may not get a knock on the door, but they will definitely receive an official letter asking the income recipient to explain the discrepancy.
Coinbase, a major U.S.-based cryptocurrency exchange (not to be confused with Coincheck), just sent a Form 1099 to one of its customers identified only by the initial “K.”
K was initially freaked out even to be receiving a 1099 from a crypto exchange. What happened to the anonymity in the crypto world?
Apparently, it doesn’t exist, as I have been warning for years.
But when K read the 1099, it got even worse. It showed that he owed $2.4 million in taxes, despite his estimate that he only put $8,000 into cryptos. K has decided to sit tight in the belief that he does not owe the taxes.
Big mistake.
The IRS will take its copy of the 1099 from the exchange and assert that K does owe the taxes. The IRS puts the burden of proof on the taxpayer to show they don’t.
Courts have backed up the IRS on this burden-of-proof approach. Just ask Al Capone, the notorious gangster who went to Alcatraz not for extortion and murder but for not paying his taxes! K will find this out the hard way, as will millions of other crypto customers.
The IRS is warming up for a bonanza of tax claims. Cryptocurrency traders who thought they could hide their gains from the IRS should get ready for the mother of all tax nightmares.
But that doesn’t mean stay away from all crypto investments. Below, I show you why blockchain technology has a bright future — and I say that as a bitcoin skeptic.
Regards,
Jim Rickards
for The Daily Reckoning
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>>> Cryptocurrencies and the Powers That Be
By James Rickards
February 14, 2018
https://dailyreckoning.com/cryptocurrencies-and-the-powers-that-be/
Cryptocurrencies and the Powers That Be
Remember the days (about six months ago) when bitcoin was going to revolutionize banking and disintermediate the mean nasty “banksters?”
Well, a funny thing happened on the way to the revolution. Bitcoin itself has hit an air pocket with a 50% price drop since December. Meanwhile, the banks that were supposed to be so dramatically disrupted by bitcoin are taking over the blockchain.
This is not surprising. Disruptive technology does come along from time to time, but established franchises have a way of either fighting back or co-opting the new technology just by buying it.
Uber is disruptive, but London taxi drivers (the best in the world, by the way) have organized to get Uber’s license there revoked. In the same spirit, it was naïve to expect that banks would just sit there and let blockchain technology eat their lunch. All of the major banks have blockchain research and development projects underway.
Japan is the first major economy to declare bitcoin “legal tender” in payment for goods and services. This does not fix a value for bitcoin, and it does not force anyone to use bitcoin, it just keeps bitcoin transactions safe from counterfeiting charges.
The Japanese banks are taking that opening and driving an armored car through it. Japan’s largest bank is creating its own crypto-currency. Valuation won’t be an issue because each coin will be worth exactly one yen. It’s really just an alternative payment system like PayPal.
What it does is allow bank customers to make and receive payments on the blockchain with a yen equivalent, but with much lower costs. Also, because this is a “permissioned” system (customers only may participate with bank approval) verification does not require the clunky proof-of-work of the original bitcoin blockchain.
Distributed ledgers and blockchain are here to stay, but bitcoin is not. The banks will see to that.
Another major argument bitcoin advocates made was that it was invisible to the IRS.
Well, not really. I’m reminded of a story from about 15 years ago…
A Swiss banker loaded all of the confidential information on Americans with Swiss bank accounts that he could find onto a CD-ROM. He then flew to the United States and handed the information over to the U.S. Treasury and the FBI.
The banker was in trouble for helping Americans evade taxes and this was his play to avoid prosecution. He blew the whistle on his clients. What ensued was a 10-year manhunt by U.S. tax authorities to find the tax evaders and many more whose information was not included on the original CD.
The U.S. played rough not by chasing the inpiduals, but by putting pressure on the Swiss banks themselves. The big Swiss banks like UBS, and Credit Suisse have huge capital markets and wealth management operations in the U.S. The U.S. told those banks they could either hand over the information or we would shut down their U.S. operations.
They handed it over.
Some of the tax evaders got lawyers, turned themselves in and paid their taxes (plus interest and penalties) to avoid jail time. Others waited and ended up in jail. Today, if you go to Switzerland and try to open a bank account they will turn you away; they have zero interest in taking on U.S. clients.
Now something similar is happening in cryptocurrencies. The U.S. Treasury is concerned that cryptos are the “new Switzerland” where Americans are hiding income and avoiding taxes. The Treasury is probably right about that. Treasury will use the same hardball tactics against the cryptocurrency exchanges they used against the Swiss banks.
The IRS is already demanding all records of crypto-currency transactions from these exchanges including name, address, social security number and bank account information about their clients. The bitcoin fans who mock the government and play “catch me if you can” will find out the hard way that the U.S. government has the resources to track them to the ends of the earth.
This is just another sign that reality is catching up to the bitcoin market.
I’ve said for years that bitcoin is a fraud, a Ponzi and a bubble all at the same time. I based this on analysis of price activity and certain other technical analyses and some anecdotal evidence.
Critics have always demanded “proof” that bitcoin was a fraud with smoking-gun-type evidence. That was difficult at first because of the secretive nature of bitcoin trading. Yet now the evidence is arriving almost every day.
New hacks are reported, millions of dollars of bitcoin routinely go missing and exchanges are closing with no recourse for investors. What may be one of the biggest frauds in history, this one involving bitcoin, is now coming to light.
One cryptocurrency exchange called Bitfinex owes customers hundreds of millions of dollars in bitcoin held in their accounts. Bitfinex is nontransparent about the funds it actually has on hand and whether its customer funds are really safe.
Bitfinex sponsored another cryptocurrency called tether, which is tied to the U.S. dollar at a one-to-one fixed exchange rate. Customers give tether $1 (or the equivalent in another crypto) and receive one tether in return. The amounts paid for the tether are supposed to be held in reserve to back up the one-for-one promise.
No one knows if tether has the funds or not. Tether recently parted ways with an auditor who was supposed to answer that question, so there is still no transparency. It also seems that every time the price of bitcoin plunged, millions of tethers were issued out of thin air to prop up bitcoin on the Bitfinex exchange.
All of this has raised suspicions that Bitfinex and tether are Ponzi schemes. A couple of weeks ago, the U.S. government sprang into action by hitting Bitfinex and tether with subpoenas demanding information about reserves and the safety of customer funds.
If it turns out the suspicions of fraud are correct, it could start a run on the bank in all cryptocurrency as holders and investors lose confidence in the crypto space generally. That would be bad enough.
But the greater fear is that panic in cryptocurrencies could spill over into regulated stock and bond markets and mark the beginning of another global financial panic.
If that happens, it’ll make the recent correction look like child’s play. And the only safe haven will be physical gold.
Regards,
Jim Rickards
for The Daily Reckoning
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>>> Noose Tightens on Bitcoin
By James Rickards
February 14, 2018
https://dailyreckoning.com/noose-tightens-bitcoin/
Noose Tightens on Bitcoin
With everything that’s been happening with the stock market lately, people have forgotten about last year’s biggest investment story:
Bitcoin.
After briefly topping off around $20,000 in December, today it’s trading around $9,000.
A lot of bad news has come to the bitcoin ecosphere. China, for example, recently ordered its banks to stop providing financial services for any cryptocurrency-related transactions.
This is important because customers wishing to buy or sell cryptocurrencies have to start by funding their crypto accounts from conventional banking sources. Also, when customers are ready to cash out of cryptos, they need to move their account balances back to traditional banks.
Without the ability of crypto exchanges and banks to interact, the crypto exchanges are basically roach motels — you can put your money in, but you can’t get it out. Now you can’t even put it in to begin with.
Crypto exchanges also need banking services to pay vendors, employees, electricity companies and others who want to get paid in yuan rather than crypto.
Those transactions will no longer be possible.
This is all part of a broader crackdown on cryptos by China, which sees them as a threat to the People’s Bank of China’s control of the money supply and capital account.
Some crypto enthusiasts shrugged off the news and said, in effect, “No big deal, the business will just move to Taiwan.”
The problem is other jurisdictions are also taking a hard look. South Korea has been considering a ban on cryptos, although there’s a popular backlash to this because so many everyday South Korean citizens bought into the hype last December and bet their life’s savings on bitcoin at prices of $15,000 per coin or higher.
Many of them are now facing financial ruin and want the government to prop up bitcoin so they can recover their losses. Recently, Germany and the IMF have issued calls for global regulation of bitcoin.
This is likely to be a topic of the next G-20 meeting in Argentina. The bottom line is jurisdictions around the world see that bitcoin in particular and many cryptos more broadly are a threat to independent monetary policy and something that can damage their citizens and possibly their economies. The noose is tightening on bitcoin.
But it’s not just governments that have concerns about cryptocurrencies.
After briefly flirting with trading cryptocurrencies themselves, Goldman Sachs has now seen the light and is saying that many of today’s cryptocurrencies are heading to zero.
Goldman’s assessment is mostly right. All of the cryptocurrencies that rely on clunky “proof of work” to validate their blockchains, such as bitcoin, are heading for the scrap heap.
They are too slow, too cumbersome and too expensive to compete with Visa, MasterCard and PayPal in the payments space. The only use case for bitcoin is to support criminal transactions, and even criminals are moving to monero and spectrecoin because they have better security and privacy features.
The same criticism about slow processing times and other inefficiencies also applies to popular cryptocoins such as ether and ripple.
Having said all that, some coins will survive.
The survivors will have two characteristics. The first is an efficient governance scheme for blockchain validation. The second is a use case supported by real enterprises or governments such as payment remittances or international bank settlements.
And Goldman admits that blockchain technology itself has a future, but caution is indicated because blockchain processing speeds are still not as fast as those of existing systems.
I myself have argued that blockchain technology has a bright future, even though I believe bitcoin does not.
The bottom line is don’t invest in cryptocoins (with a few exceptions), but invest in blockchain technology instead.
Regards,
Jim Rickards
for The Daily Reckoning
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$FUSZ: NEW UPDATED DD~01/27/2018``HOT TECHNOLOGY COMPANY WITH DYNAMIC INTERACTIVE ‘walk-out-style’ VIDEO CRM (customer relationship management) / ICO for Ebates style platform and believed that same people who setup Kodak’s ICO is creating the NFusz CRM ICO
Composed by Sheepwolf.
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=138045471
The Bitcoin Psyop -
>>> Venezuelan President Calls on 11 Countries to Adopt State Cryptocurrency Petro
Altcoin News
January 16, 2018
https://www.ccn.com/president-maduro-calls-on-alba-governments-to-join-venezula-in-adopting-the-petro/
Venezuelan president Nicholas Maduro has called on members of the Bolivarian Alliance for the Peoples of America (ALBA) to support the petro, Venezuela’s state-sponsored cryptocurrency.
The alliance – which consists of Antigua and Barbuda, Bolivia, Cuba, Dominica, Ecuador, Nicaragua, Saint Lucia, Saint Vincent and the Grenadines, Saint Kitts and Nevis, Granada and Venezuela– met last Friday in Caracas, Venezuela’s capital, for an ALBA political council meeting.
In his closing remarks, Maduro urged his compatriots to adopt the petro, the Colombian news outlet El Tiempo originally reported.
“I put on the table, brother governments of the ALBA, the proposal of the cryptocurrency the petro, so that we [may] assume it as one of the projects of integration of the 21st century in a bold way, but also in a creative way.”
Consequently, Maduro’s appeal to the coalition comes in the same week that Venzuela’s parliament declared that the petro is unconstitutional.
The Petro: A Brief History and Context
President Maduro first revealed plans for the petro in a televised address back in December. The cryptocurrency, he announced, would be backed by oil, diamond, and gold commodity reserves. It’s his hope that the petro will “advance monetary sovereignty, as it will help to overcome the financial blockade and thus move towards new forms of international financing for the economic and social development of the country.”
With the petro, the Venezuelan government hopes to circumvent sanctions imposed by the Trump administration, as well as shore up an economic crisis that has the bolivar, Venezuela’s native currency, plummeting against the US dollar.
Meanwhile, Venezuelan citizens are emigrating out of the country in droves, while some who have stayed have turned to mining or buying bitcoin to stay financially afloat amidst a sinking economy.
Two weeks ago, Maduro mandated the circulation of 100 million petro, the first issuance of the state-sponsored cryptocurrency to date. Each coin will be backed by a single barrel of crude oil, making the total supply worth roughly $6 bln at current oil prices. Under government supervision, dissemination of the currency will take place through virtual exchange houses, and transactions will be processed by groups of national miners.
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>>> IBM Unveils Joint Blockchain Company with the World’s Largest Shipper
Blockchain News
January 17, 2018
https://www.ccn.com/ibm-unveils-joint-blockchain-company-worlds-largest-shipper/
Early blockchain tech mover IBM and Danish shipping giant Maersk have announced a joint venture to digitize and enhance global trade efficiency and security using blockchain technology.
One of the world’s oldest industries that has long been notoriously averse to adopt modern technologies is getting a blockchain revamp.
In an announcement yesterday, IBM and A.P Moller – Maersk confirmed their intent to launch a new as-yet-unnamed company that will specifically develop blockchain technology built on open standards ‘designed for use by the entire global shipping ecosystem.’ The new company will be headquartered in New York.
Supply trade chains and logistics are two particular industries ripe for disruption and are certain to instantly benefit from adopting blockchain technology. An immutable, shared ledger with multiple participants including suppliers, shippers, port operators and export/import authorities will help companies continuously track and monitor shipments in real-time. Decades of operational inefficiency due to manual processes and breakages leading to billions in losses could be avoided. The blockchain will enable end-to-end supply chain visibility for all participants with data updated in real-time through a paperless system powered by smart contracts.
Maersk will implement and deploy IBM’s blockchain software – the Hyperledger Fabric – across its fleet, as well as use other cloud technologies in artificial intelligence and IoT to track shipments.
Maersk’s chief commercial officer Vincent Clerc stated:
“The potential from offering a neutral, open digital platform for safe and easy ways of exchanging information is huge, and all players across the supply chain stand to benefit.”
Development of the new joint-company comes amid an ongoing partnership between IBM and Maersk that began in early 2017. The blockchain, which includes a network of freight forwarders, ocean carriers and ports, will support a supply chain that set out to track 10 million containers by the end of the year. IBM estimates annual savings of approximately $38 billion among shipping carriers digitizing their processes using blockchain technology.
The endeavor has proved successful, creating solutions in pilots tested by the likes of Netherlands’ customs authority, the US Customs and Borders Protection, the Singaporean and Peruvian customs authorities as well as industry giants like General Motors and Procter and Gamble for supply chain management.
Awaiting the regulator’s green light, real-world implementation of the joint venture’s solutions are ‘expected to be available within six months,’ IBM added.
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>>> Vitalik Buterin Leaves China-Based VC to Focus on Ethereum Development
Ethereum News
January 16, 2018
https://www.ccn.com/vitalik-buterin-leaves-china-based-vc-focus-ethereum-development/
Vitalik Buterin, the co-founder of Ethereum, has left China-based venture capital firm Fenbushi Capital according to TechCrunch, to focus on the development of Ethereum.
Focusing on Ethereum
Buterin announced that he has stepped down from his role as a general partner of Fenbushi Capital, which has been one of the most active investors in the blockchain and cryptocurrency sector. He noted that he will no longer serve as a full-time partner of the firm, but will remain as an advisor.
During an interview with TechCrunch, Buterin emphasized that although the cryptocurrency market has demonstrated an exponential increase in users and valuation, the practical usability of blockchains have regressed to the rising transaction fees and scalability issues.
To address the growing demand for Ethereum and the high expectations from the global Ethereum community, Buterin explained that he will solely focus on the development of the Ethereum blockchain network and solving scalability issues to provide a better ecosystem for decentralized applications. He stated:
“I expect 2018, at least within the Ethereum space that I’m best able to speak about, will be the year of action. It will be the year where all of the ideas around scalability, Plasma, proof-of-stake, and privacy that we have painstakingly worked on and refined over the last four years are finally going to turn into real, live working code that you can play around in a highly mature form in some cases on testnets, and in some key cases even on the public mainnet.”
The statement of Buterin came after several experts in the cryptocurrency sector including Augur co-founder Joey Krug said that there is a clear lack of developers working on scaling solutions for the Ethereum network. The rise in the popularity of successful decentralized applications such as CryptoKitties, EtherDelta, and 0x have congested the Ethereum network, which is already processing more transactions than all of the blockchains in the global market combined.
Scalability Issues
According to Etherscan, the Ethereum network is processing around 1.2 million transactions on a daily basis, which is more than 4 times larger than the daily transaction volume of bitcoin.
But, as the developers of Bankex explained, who recently introduced a practical implementation of Vitalik Buterin and Joseph Poon’s Plasma, a scaling solution that uses interconnected blockchains to reduce the congestion of the main Ethereum blockchain network, apps like CryptoKitties are executing hundreds of thousands of transations on regular basis, filling the Ethereum network with large-size transactions.
Some decentralized applications like 0x have off-chain solutions to execute orders or transactions off-chain and broadcast them to the main Ethereum network after batching many transactions into one single transaction. Still, the vast majority of applications still do not have innovative solutions to reduce the congestion of the Ethereum network.
As such, Krug emphasized that developers working on Ethereum scaling solutions are crucial for the ecosystem, and there must be more developers contributing to the open-source codebase of Ethereum scaling solutions.
“Ethereum really needs more developers on problems like sharding, proof of stake, and plasma, right now there simply aren’t enough. It should also hire some more operations people to help orchestrate it all, for instance, Solidity is just now being formally audited. Ethereum would be 100x more kickass with these things [and around] 10 developers each working on all three of those hard problems above.”
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>>> JioCoin – India’s Biggest Conglomerate to Launch its Own Cryptocurrency
Altcoin News
January 16, 2018
https://www.ccn.com/jiocoin-indias-biggest-conglomerate-launch-cryptocurrency/
Reliance Industries, India’s biggest and most valuable conglomerate, is diving into blockchain development that will also see the company create its own cryptocurrency, JioCoin, through its telecom subsidiary Reliance Jio Infocomm.
According to a regional report by LiveMint, Indian telecom giant Jio Infocomm is establishing an initiative dubbed the ‘JioCoin project’ that will see a 50-member team of professionals working on blockchain technology to develop applications for supply chain management logistics as well as building smart contracts. The team will reportedly be led by Akash Ambani, the eldest son of Mukesh Ambani who is the managing director of Reliance Industries. One of the world’s richest men, Mukesh Ambani is worth an estimated $40.1 billion with a 44.7% stake in the conglomerate.
The blockchain development team – to consist of professionals with an average age of 25 years – will also work toward developing its own cryptocurrency called Jiocoin.
Speaking to the publication, an anonymous insider familiar with the developments outlined potential use cases for the technology, stating:
“One (application) is cryptocurrency. We can deploy smart contracts. It can be used in supply chain management logistics. Loyalty points could altogether be based on JioCoin.”
Although details remain scarce, it’s easy to spot reasons for Reliance Jio’s foray into developing its cryptocurrency. The company has a massive network of entertainment offerings including Jio Phones, JioTV, JioNet WiFi, Jio Cinema, Jio Music and notably, Jio Money. With Jio Money, Reliance Jio has developed its own payment gateway and wallet that predictably brings a wide range of discounts on purchases in food, travel, apparels and more. With its own cryptocurrency, Reliance Jio could conceivably issue loyalty points in cryptocurrency that can be used for purchases throughout the Jio ecosystem.
While India’s highly competitive mobile telephony market already sees some of the lowest tariffs in the world, the recently-launched Reliance Jio – with a 4G network covering the entire country – has heavily disrupted the sector with significantly discounted data usage rates and freebies to become the country’s fourth-largest telecom operator. A little over a year since it’s launch in December 2016, Reliance JIO now has over 160 million subscribers in the world’s second largest mobile subscriber market (an estimated 1.1 billion users), after China.
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>>> Ethereum Alumni and Cardano Creator Predicts a Cryptocurrency Market Crash
Altcoin News
January 09, 2018
https://www.ccn.com/cardano-developer-portends-a-cryptocurrency-market-crash/
The creator of cardano portends that the cryptocurrency markets will undergo a serious correction that will help weed out projects with poor fundamentals.
The 2017 market run-up injected hundreds of billions of dollars worth of capital into the cryptocurrency ecosystem, but many industry observers believe that the rally has been indiscriminate and could trigger a crash as investors gradually recognize that many projects have poor fundamentals.
“My personal opinion is that we’re going to see a consolidation after a crash,” ethereum co-founder Charles Hoskinson told CNBC in an interview Friday.
Hoskinson served as chief executive of the ethereum project during its early stages in late 2013 and early 2014. At present, he heads blockchain research firm IOHK, which is best known for its development of Cardano, which currently ranks as the fifth-largest cryptocurrency by market cap.
The developer said that he believes the sheer number of cryptocurrencies with poor fundamentals makes a crash inevitable, as many of these projects are wildly-overvalued and ultimately unsustainable.
The latest punching bag for analysts who share this opinion has been Dentacoin, a self-described “blockchain solution for the global dental industry” that currently boasts a market cap of $1.5 billion.
“What’s going to occur is a lot of these ventures that don’t have strong fundamentals, don’t have good tech, or just unrealistic projects, they will eventually run into some major wall they can’t quite overcome,” Hoskinson said. “They will fracture up and you will see a lot of them are certain to fail.”
This, however, could not be realized for some time, as many projects raised large amounts of capital through initial coin offerings (ICOs).
Eventually, though, Hoskinson predicts that the market will undergo a crash that will consolidate capital in projects with stronger fundamentals, strengthening the industry over the long-term.
Early Ethereum Advisor Still Bullish on Near-Term Outlook
Early ethereum advisor Steven Nerayoff, however, foresees a much brighter near-term outlook for the cryptocurrency markets.
“The entire space is increasing. There is huge interest by the public and there are more areas in which the public can invest, even in bitcoin, so you could just see an expansion in the entire space,” Nerayoff told CNBC on Monday.
Nerayoff, who describes himself as the “architect” of the Ethereum ICO, predicted that the ethereum price could triple over the next year, which may or may not lead to the long-anticipated “flippening,” after which ethereum would rank as the most valuable cryptocurrency.
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>>> $6 Billion Oil-Backed Cryptocurrency: Venezuela’s President Orders Issue of 100 Million Petros
Altcoin News
January 08, 2018
https://www.ccn.com/6-billion-oil-backed-cryptocurrency-venezuelas-president-orders-issue-100-million-petros/
Venezuelan president Nicolás Maduro has announced the issuance of 100 million petros, the state’s proposed upcoming national cryptocurrency backed by its oil reserves, the world’s largest by any country.
Venezuela’s national cryptocurrency, the petro, will soon see its first issuance after Maduro’s mandate to issue 100 million units of the digital tokens. Each petro will be directly valued to a single barrel of oil, reports the El Nuevo Herald. At an average of just under $60 per barrel at the time of his announcement, the total value of 100 million petros would be just under $6 billion.
In a state television address, Maduro stated:
I have ordered the emission of 100 million petros with the legal sustenance of Venezuela’s certified and legalized oil wealth. Every petro will be equal in value to Venezuela’s oil barrel.
Following his announcement last week, Venezuela’s first ever national meeting of petro ‘miners’ will convene on January 14, a date when the petro is formally presented. The issuance of the 100 million petros will take place via ‘virtual currency exchange houses that are currently in a trial period’ according to the report.
As reported by CCN in December, Maduro first announced the cryptocurrency as a means to evade and circumvent economic sanctions and the “financial blockade” imposed by the U.S. president Trump’s administration. In August, the US government enforced crippling financial sanctions that have proved a blockade in Venezuela’s access to international banks and global finance.
The petro will also be backed by other commodity reserves like gold and diamonds, Maduro added. The announcement by the Venezuelan leader was met with criticism by his political opponents who dismissed the endeavor as a fanciful idea at a time when Venezuela continues to suffer hyperinflation amid severe food shortages and a deepening economic recession.
That hasn’t stopped Maduro from bullishly announcing the superintendence of the petro in the days before Christmas 2017 by setting up a sperate body to ‘govern’ the cryptocurrency and its transactions.
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>>> KODAK and WENN Digital Partner to Launch Major Blockchain Initiative and Cryptocurrency
KODAKOne platform and KODAKCoin cryptocurrency give photographers a new revenue stream and a secure platform for protecting their work
https://www.kodak.com/US/en/corp/Press_center/KODAK_and_WENN_Digital_Partner_to_Launch_Major_Blockchain_Initiative_and_Cryptocurrency/default.htm
Rochester, NY
January 09, 2018
Today Kodak and WENN Digital, in a licensing partnership, announced the launch of the KODAKOne image rights management platform and KODAKCoin, a photo-centric cryptocurrency to empower photographers and agencies to take greater control in image rights management.
Utilizing blockchain technology, the KODAKOne platform will create an encrypted, digital ledger of rights ownership for photographers to register both new and archive work that they can then license within the platform. With KODAKCoin, participating photographers are invited to take part in a new economy for photography, receive payment for licensing their work immediately upon sale, and for both professional and amateur photographers, sell their work confidently on a secure blockchain platform. KODAKOne platform provides continual web crawling in order to monitor and protect the IP of the images registered in the KODAKOne system. Where unlicensed usage of images is detected, the KODAKOne platform can efficiently manage the post-licensing process in order to reward photographers.
“For many in the tech industry, ‘blockchain’ and ‘cryptocurrency’ are hot buzzwords, but for photographers who’ve long struggled to assert control over their work and how it’s used, these buzzwords are the keys to solving what felt like an unsolvable problem,” said Kodak CEO Jeff Clarke. “Kodak has always sought to democratize photography and make licensing fair to artists. These technologies give the photography community an innovative and easy way to do just that.”
“Engaging with a new platform, it is critical photographers know their work and their income is handled securely and with trust, which is exactly what we did with KODAKCoin,” said WENN Digital CEO Jan Denecke. “Subject to the highest standards of compliance, KODAKCoin is all about paying photographers fairly and giving them an opportunity to get in on the ground floor of a new economy tailored for them, with secure asset rights management built right in.”
The initial coin offering will open on January 31, 2018 and is open to accredited investors from the U.S., UK, Canada and other select countries. For more information visit www.kodakcoin.com. This initial Coin Offering is issued under SEC guidelines as a security token under Regulation 506 (c) as an exempt offering.
About Kodak
Kodak is a technology company focused on imaging. We provide – directly and through partnerships with other innovative companies – hardware, software, consumables and services to customers in graphic arts, commercial print, publishing, packaging, entertainment and commercial films, and consumer products markets. With our world-class R&D capabilities, innovative solutions portfolio and highly trusted brand, Kodak is helping customers around the globe to sustainably grow their own businesses and enjoy their lives. For additional information on Kodak, visit us at kodak.com, follow us on Twitter @Kodak, or like us on Facebook at Kodak.
About WENN Digital
WENN Digital, in partnership with Kodak, is the creator of the KODAKOne platform and the KODAKCoin cryptocurrency. WENN Digital is an experienced development and operations team with deep expertise in proprietary blockchain development, big data, copyright law, AI-enabled image recognition and post licensing monetization systems. WENN Digital has a strategic relationship with the Deloitte Analytics Institute in Berlin and the Deloitte Blockchain Institute in Munich. Further, WENN Digital leverages the market position of its 30-year old subsidiary WENN Media, which works with approximately 2,500 professional photographers. WENN Digital’s live operational copyright infringement management system is delivering revenues to photographers worldwide today and will form Phase 1 of the KODAKOne platform.
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>>> Has Jim Rickards Changed His Mind on Bitcoin?
By James Rickards
January 8, 2018
https://dailyreckoning.com/jim-rickards-changed-mind-bitcoin/
Has Jim Rickards Changed His Mind on Bitcoin?
Dear Reader,
My readers know I’m not a bitcoin proponent. I don’t deny that it’s made some people a lot of money, but I believe bitcoin is a massive bubble right now.
Yet it’s been reported in some circles that I’ve recently come out in favor of bitcoin.
It’s not true.
Now, it is true that I’ve stated my belief in blockchain technology, which is the technology behind bitcoin and other cryptocurrencies. There’s great promise here. And despite what some critics may claim, I’m not some technophobe who doesn’t understand the technology underlying cryptos.
I know it very well. I’ve been studying cryptos since before many of their current owners even heard of bitcoin. I actually worked with the intelligence community to counter ISIS’s use of cryptocurrencies to bypass the international money system.
And in my opinion, the hype has run far ahead of reality. This is reflected in bitcoin’s meteoric and unsustainable rise. But again, I also believe blockchain technology is for real and has great potential. So just because I’m not a bitcoin cheerleader doesn’t mean I’m opposed to all blockchain-based cryptos.
(In a few weeks, I’ll actually be conducting a debate with leading cryptocurrency expert James Altucher. The topic will be gold versus bitcoin, and I can’t wait to give viewers the whole story. Stay tuned for details.)
Today, I want to talk a little more about how gold and blockchain technology could lead the world away from the dollar-based system…
Despite everything you may hear in the mainstream media, gold is as relevant as ever.
Russia and China, for example, have been accumulating thousands of tons of physical gold bullion for the last 10 years. That’s not news, of course.
What is news is that both countries are starting to make moves toward the end game of a gold-backed currency that completely bypasses the U.S. dollar payments system.
These moves are both geopolitical and monetary.
In fact, they track the gold-based attack on the U.S. dollar that I devised for the Pentagon in their first-ever financial war game in 2009. That financial war game is described in detail in my 2011 book, Currency Wars.
It looks like the Russians and Chinese read my book!
According to Russian government officials attending a recent monetary conference in Moscow, Russia, China and their BRICS allies are moving toward their own gold trading system (bypassing London and New York).
From there it’s a small step toward a new gold-backed digital currency using distributed ledger technology and military-grade encryption. Distributed ledger technology is another term for the blockchain technology I discussed above.
But unlike cryptocurrencies like bitcoin, this digital system is backed by gold.
Once that system is up and running, the BRICS can trade and settle oil, commodities, weapons, manufactured goods and the overall balance of payments without using dollars or Western financial intermediaries at all.
And from there, a global loss of confidence in the dollar is not far behind. Do you think bitcoin will win the most in this scenario?
It won’t. The big winner in all of this will be gold.
Below, my colleague and senior geologist Byron King shows you how Russia is stockpiling gold as a “fire escape” currency to bypass the U.S.-backed monetary system. Read on to see how this development will dramatically affect the price of gold in the years to come.
Regards,
Jim Rickards
for The Daily Reckoning
<<<
The role of Blockchain/DLT in the IMF's plan to replace the US Dollar as the world's reserve currency -
>>> Dear President Trump: America is in for a Rude Awakening in January
By James Rickards
September 8, 2017
https://dailyreckoning.com/president-trump-america-rude-awakening/
Dear President Trump,
Over the last couple of years I’ve been all over TV… from Fox News to CNBC, CNN and Bloomberg. I’ve been telling our fellow Americans that the financial global elite was planning to issue their own globalist currency called special drawing rights, or SDRs.
And that those elites would use this new currency to replace the U.S. dollar as the global reserve currency.
I’ve even written about this extensively in my best-selling booksThe Road to Ruin and The New Case for Gold.
I’m sure some people in the mainstream media thought I was out of line — but the United Nations and the International Monetary Fund (IMF) have both confirmed this plan to replace the U.S. dollar is real. I’ve made this warning many times, but it seems to be falling on deaf ears. That’s why I’m writing directly to you.
Here’s the proof that the U.S. dollar is under attack, right in front of our eyes:
The UN said we need “a new global reserve system… that no longer relies on the United States dollar as the single major reserve currency.”
And the IMF admitted they want to make “the special drawing right (SDR) the principal reserve asset in the [International Monetary System].”
More recently, the IMF advanced their plan by helping private institutions, such as the UK’s Standard Chartered Bank, issue bonds in SDRs.
Although our mainstream media ignored this major event, the UK media reported:
"Standard Chartered successfully issues SDR bonds in China" (SDR = Special Drawing Rights)
This is all happening. And on January 1st, 2018, this trend to replace the U.S. dollar will accelerate. That’s when the global elite will implement a major change to the plumbing of our financial system.
It’s a brand-new worldwide banking system called Distributed Ledger Technology. And it will have a huge impact on seniors who are now preparing for retirement.
When this system goes live, many nations will be able to dump the U.S. dollar for SDRs.
For now, the U.S. dollar is still the world’s reserve currency. Other nations have to hold and use the U.S. dollar for international trade, instead of their own currencies.
This creates a virtually unlimited demand for U.S. dollars, which allows us to print trillions of dollars each year to pay for wars, debt and anything we want. It keeps our country operating.
Now, we can see that the global elites are working to unseat the U.S. dollar as the global reserve currency.
Here are the three key pieces of information that prove this will happen.
Fact #1 — The IMF issues a globalist currency called special drawing rights, or SDRs.
Fact #2 — The IMF has confirmed they want to replace the U.S. dollar with SDRs.
Fact #3 — The IMF has confirmed Distributed Ledgers can be used for “currency substitution”… and they’ve even set up a special task force to speed up implementation.
The IMF is using this technology to create an SDR payment system, because that’s the currency they issue.
>> Picture of Christine Lagarde, head of the IMF <<
When asked about the task force, she (Lagarde) said:
“As I see it, all this amounts to a brave new world for the financial sector.”
Yes, a brave new world where the dollar is no longer the world reserve currency.
Barbara C. Matthews, a former US Treasury Department attaché to the European Union, has reached the same conclusion.
She said the link between the globalists’ currency and Distributed Ledgers “is impossible to avoid.”
And that “the IMF seems to be exploring the possibility of permitting a broader use of [their globalist currency] beyond internal transactions among member central banks.”
Make no mistake, if the IMF is planning to use Distributed Ledgers to replace the U.S. dollar with SDRs. And just to be clear, when SDRs take over, the American people will be left with devalued dollars.
Once other nations start accumulating the globalist currency through Distributed Ledgers, they will no longer need to hold dollars. Once Distributed Ledgers go live, other nations will no longer need to buy Treasury bonds./b]
And that means our government — your government — will no longer be able to finance its normal operations, including welfare programs like Social Security. For those who have their retirement account parked in stocks, they could watch it evaporate in a matter of days. The weakest companies in the stock market could collapse once this plan goes live.
Just look what happened the last time we had a big change in our global financial system. In 1971, Nixon announced the U.S. would no longer officially trade dollars for gold. That created a lot of uncertainties, turning that decade into a nightmare for stock investors.
Take a look… the Dow Jones, an index of “stable” blue chip stocks (the kind most retirees like to hold), was cut in half. Stock investors bailed out of the market and, for the most part, didn’t come back for a decade.
Dow Jones Historical Chart
I expect something similar once Distributed Ledgers go live.
The transition from a U.S. dollar system to a new system dominated by SDRs will be messy. Stocks will collapse… and will stay down. There will be no recovery this time, because the U.S. government won’t be able to come to the rescue like they did in 2008.
You won’t even have funding for normal operations, let alone enough funds to save stock investors.
I know that governments have been patiently watching Distributed Ledger (often referred to as blockchain) technology develop and grow outside their control for the past eight years. Libertarian supporters of Distributed Ledgers celebrate this lack of government control.
Yet, their celebration is premature, and their belief in the sustainability of powerful systems outside government control is naïve. Governments don’t like competition especially when it comes to money.
You probably know that you, or any government, cannot stop Distributed Ledger technology — in fact you probably don’t want to. Governments and monetary elites want to control it using powers of regulation, taxation, and investigation.
An elite U.S. legal institution called the Uniform Law Commission, which proposes model laws intended for adoption in all fifty states, has released its latest proposal called the “Uniform Regulation of Virtual Currency Businesses Act.”
This new law will not only provide a regulatory scheme for state regulators, but will also be a platform for litigation by private plaintiffs and class action lawyers seeking recourse against real or imagined abuses by digital coin exchanges and facilities.
We know the U.S. government will want to use this technology for its benefit. One step toward government control just occurred a few weeks ago.
On August 1, 2017, the SEC announced “Guidance on Regulation of Initial Coin Offerings,” the first step toward requiring fundraising through Distributed Ledger, or blockchain-based tokens to register with the government.
But consider the following additional developments:
• On August 1, 2017, the World Economic Forum, host body to the Davos conference of global super-elites, published a paper entitled “Four reasons to question the hype around blockchain.”
•On August 7, 2017, China announced they will begin using Distributed Ledger technology to collect taxes and issue “electronic invoices” to citizens there.
Perhaps most portentously, the International Monetary Fund (IMF) has weighed in.
In a special report dated June 2017, the IMF had this to say about Distributed Ledgers: The IMF favors control by a “pre-selected group of participants” or “one organization,” rather than allowing “anyone” to participate.
This paper should be viewed as the first step in the IMF’s plan to migrate its existing form of world money, the SDR, onto a DLT platform controlled by the IMF.
They’re telling you exactly what their plan is. It would be foolish to ignore them, or assume the U.S. dollar will remain the global reserve currency much longer once this plan is implemented, as early as January 1, 2018.
You know the global elites’ aren’t your biggest fan. You know the U.S. dollar has been under attack.
This is the global financial elites’ plan to remove the U.S. dollar from its position of power and to attack your administration all at once.
Who do you think American’s will blame when the stock market crashes, or Social Security runs out? We can hear the talking heads already.
Best,
Jim Rickards
for The Daily Reckoning
<<<
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>>> Bitcoin tops $17,000; hack raises concerns ahead of US trade
By Elaine Kurtenbach
Dec 7, 2017
http://abcnews.go.com/Technology/wireStory/bitcoin-miner-nicehash-reports-hack-theft-wallet-51636976
Bitcoin surged past $17,000 Thursday as the frenzy surrounding the virtual currency escalated just days before it starts trading on major U.S. exchanges. Bitcoin has gained more than $5,000 in just the past two days.
At the same time, there are fresh concerns about the security of bitcoin and other virtual currencies after NiceHash, a company that mines bitcoins on behalf of customers, said it is investigating a breach that may have resulted in the theft of about $70 million worth of bitcoin.
Research company Coindesk said that a wallet address referred to by NiceHash users indicates that about 4,700 bitcoins had been stolen. NiceHash said it will stop operating for 24 hours while it verifies how many bitcoins were taken. Wallet is a nickname for an online account.
As of 11:15 a.m. EST, bitcoin was valued at $17,482, according to Coinbase, the largest bitcoin exchange. At the start of the year, one bitcoin was worth less than $1,000.
The surge in the price and the hack of NiceHash occurred just as the trading community prepares for bitcoin to start trading on two established U.S. exchanges. Futures for bitcoin will start trading on the Chicago Board Options Exchange on Sunday evening and on crosstown rival CME Group's platforms later in the month.
That has increased the sense among some investors that bitcoin is gaining in mainstream legitimacy after several countries, like China, tried to stifle the virtual currency.
Bitcoin is the world's most popular virtual currency. Such currencies are not tied to a bank or government and allow users to spend money anonymously. They are basically lines of computer code that are digitally signed each time they are traded.
A debate is raging on the merits of such currencies. Some say they serve merely to facilitate money laundering and illicit, anonymous payments. Others say they can be helpful methods of payment, such as in crisis situations where national currencies have collapsed.
Miners of bitcoins and other virtual currencies help keep the systems honest by having their computers keep a global running tally of transactions. That prevents cheaters from spending the same digital coin twice.
Online security is a vital concern for such dealings.
In Japan, following the failure of a bitcoin exchange called Mt. Gox, new laws were enacted to regulate bitcoin and other virtual currencies. Mt. Gox shut down in February 2014, saying it lost about 850,000 bitcoins, possibly to hackers.
NiceHash did not respond to an emailed request for more details about the breach.
"The incident has been reported to the relevant authorities and law enforcement and we are cooperating with them as a matter of urgency," it said in a statement, where it also urged users to change their online passwords.
Slovenian police are investigating the case together with authorities in other states, spokesman Bostjan Lindav said, without providing details.
<<<
>>> Here’s why UBS is bullish on blockchain, but not bitcoin
By Ryan Vlastelica
Oct 26, 2017
https://www.marketwatch.com/story/heres-why-ubs-is-bullish-on-blockchain-but-not-bitcoin-2017-10-24
It’s ‘akin to investing in the internet in the 90s’
Skeptical about buying bitcoin, but think the underlying technology driving the red-hot digital currency has world-changing potential?
UBS has such a split view, seeing the cryptocurrency as a dangerous place to put one’s money, even as it expects blockchain technology to revolutionize the world. The investment bank argued that the recent jumps in cryptocurrency valuations—bitcoin prices are up more than 500% thus far this year, while rival Ether has soared more than 3,400%—as “a speculative bubble,” adding that it was “highly doubtful whether they will ever become mainstream currencies.”
But despite that, the investment bank is extremely optimistic about the prospects for blockchain, the technology that bitcoin and other cryptocurrencies run on, which essentially functions as a decentralized ledger used to record and verify transactions. It is what allows digital currencies to function as a way to exchange value without the participation of a central bank or government.
“While we are doubtful cryptocurrencies will ever become a mainstream means of exchange, the underlying technology, blockchain, is likely to have a significant impact in industries ranging from finance to manufacturing, health care, and utilities,” UBS wrote.
How massive an opportunity could blockchain represent for investors? It is “akin to investing in the internet in the mid-nineties,” the investment bank wrote, estimating that blockchain technology could add as much as $300 to $400 billion of annual economic value globally by 2027.
“Just as internet has transformed our lives with email, e-commerce, or smartphone apps, we believe blockchain as an infrastructure technology can power future disruptive technologies through distributive ledgers, smart contracts, tokens or identity management,” it wrote, although it didn’t provide specific investment recommendations.
Such growth won’t come without risk, and UBS noted a number of fundamental questions that surround the industry’s prospects. “For the time being, technological shortcomings still need to be resolved, it remains unclear which specific applications will prove most useful/profitable, and actual revenue and profitability associated with the industry is currently limited,” it wrote.
Nonetheless, it does see myriad uses for blockchain across sectors, predicting “billions of dollars of savings or economic value” being created in the manufacturing sector alone thanks to the impact blockchain could have on supply chains and network efficiencies.
For health care, it wrote that blockchain can help with data management, “by providing anonymized clinical data as part of a distributed ledger, allowing inspection agencies like the U.S. Food and Drug Administration or research institutes to access only the relevant information, while maintaining patient confidentiality.”
Another sector that could see heavy blockchain adoption is the financial industry, where UBS has been making investments of its own. The bank noted that it was “exploring distributed ledgers and smart contracts and how they may apply to complex financial instruments, and we are engaging in a variety of experiments and the development of new business models.” It has five blockchain projects that have reached a level of maturity where they are running a production pilot.
UBS listed six areas of the financial sector that blockchain technology could be disruptive, including managing insurance claims, foreign exchange transfers, trade finance, and various compliance processes.
That increased adoption comes at a time when digital currencies have seen massive gains thus far this year, bringing an influx of attention to the space. Bitcoin has surged more than 500% in 2017, while Ether has climbed more than 3,400%. A number of initial coin offerings, which have raised more than $1.3 billion this year alone, have also brought renewed interest.
Read: The ‘Wolf of Wall Street’ says ICOs are ‘the biggest scam ever’
The total combined market capitalization of cryptocurrencies is $167.3 billion, according to CoinMarketCap, with bitcoin alone comprising about $98 billion.
Despite the rallies, and the increased legitimacy that cryptocurrencies have gained in their maturation, UBS remains bearish on the asset class. It wrote that “the need for companies and individuals to pay tax receipts in government-issued currency, and the potentially unlimited crypto-money supply, pose significant barriers to widespread adoption.”
Arianna Simpson, an early-stage investor in various cryptocurrency businesses, said she took issue with the “pro-blockchain, anti-crypto” point of view, calling it “a convenient way of taking a politically acceptable and ‘safe’ position.”
“The main issue is that the way the bitcoin network was constructed (and a majority of crypto assets have followed suit) requires the miners to expect that the bitcoin they are given as reward for performing the work will increase in value over time, or at the very least has value now,” she said. “If not, there is no rational reason why they would invest in mining equipment, electricity etc., and without the miners, the system does not work.”
<<<
>>> Two ETF sponsors file for funds related to blockchain, bitcoin’s foundational technology
By Ryan Vlastelica
Nov 3, 2017
https://www.marketwatch.com/story/a-potential-etf-looks-to-provide-exposure-to-blockchain-bitcoins-foundational-technology-2017-11-02?siteid=bigcharts&dist=bigcharts
Fund plans to hold companies involved in the blockchain ecosystem
The race is on.
Two different companies filed for what would be the first exchange-traded fund to track the blockchain ecosystem on Thursday, in a bid to offer investors exposure to one of the most hotly watched new technologies in years.
Amplify ETFs on Thursday filed for the Amplify Blockchain Leaders ETF, an actively managed fund that seeks to offer exposure to companies and other securities involved in blockchain, the technology that bitcoin and other cryptocurrencies run on. Separately, Reality Shares filed for the Reality Shares Nasdaq Blockchain Economy ETF, which would be a passively managed vehicle.
Blockchain essentially functions as a decentralized ledger used to record and verify transactions, and it is what allows digital currencies to function as a way to exchange value without the participation of a central bank or government.
During the Gold Rush, it was a common belief that entrepreneurs could make more money selling equipment to the miners hoping to strike it rich, rather than taking their chances on finding the precious metal itself. Amplify used this as a metaphor for its strategy with what has been described as the gold of the 21st century: bitcoin.
“We believe there’s a ‘pick and axe’ play here, where we’re not just looking to sell the gold, but also the equivalent of the mining equipment,” said Christian Magoon, chief executive officer of Amplify ETFs. “Bitcoin is just one application for blockchain, the best known one, but there will be all kinds of applications, not just cryptocurrencies. We think it is like the internet was 20 years ago.”
The Reality Shares fund “is designed to measure the returns of companies that are committing material resources to developing, researching, supporting, innovating or using blockchain technology for their proprietary use or for use by others,” according to a filing with the Securities and Exchange Commission.
Bullishness over the potential for blockchain is nothing new, although the fund, if approved, would be the first ETF to specifically focus on it. In October, UBS said that investing in blockchain was “akin to investing in the internet in the mid-nineties,” and estimated that it could add as much as $300 to $400 billion of annual economic value globally by 2027.
Blockchain “is likely to have a significant impact in industries ranging from finance to manufacturing, health care, and utilities,” it added. “Just as internet has transformed our lives with email, e-commerce, or smartphone apps, we believe blockchain as an infrastructure technology can power future disruptive technologies through distributive ledgers, smart contracts, tokens or identity management.”
More detail: Here’s why UBS is bullish on blockchain, but not bitcoin
Investors seem desperate for any kind of blockchain exposure, to the point where companies that put the word “blockchain”—or other cryptocurrency terms—into their name have seen share prices soar, a trend that some experts compared with an essentially automatic boost enjoyed by the technology companies that added “dot-com” to their name during the tech bubble.
It was unclear when either fund might begin trading, if approved. The Reality Shares filing didn’t give either a ticker symbol nor the expense ratio that would be charged, while Magoon said final decisions had yet to be made on those issues for the Amplify fund.
The index the Reality Shares fund will track will select its holdings through what it calls a “Blockchain Score,” a “proprietary ranking system developed by the Index Providers designed to identify those Blockchain Companies expected to benefit most (e.g., from increased economic profit, operational efficiencies or transformational business practices) from the innovation, adoption, deployment and commercialization of blockchain technology,” the filing read. The 50 to 100 companies with the highest such scores will be included and weighted based on their scores.
The Amplify fund will be actively managed, meaning the holdings will be individually selected by a portfolio manager, as opposed to its tracking the performance of an underlying index.
Magoon said he expects Nvidia Corp. NVDA, -1.51% will likely be one of the holdings, although he couldn’t officially confirm any portfolios positions.
Nvidia “meets the criteria as a lot of their products are used for mining or blockchain research, and those are the types of plays the fund would hold,” he said. “The top holdings will likely include some semiconductor companies, some financial service companies, and tech companies—those are all areas that have investments in blockchain or revenue coming from it.”
One thing it won’t hold directly is bitcoin itself, which extended its astonishing year-to-date advance on Thursday by leaping above $7,300, hitting record territory, though it subsequently pulled back. A single bitcoin BTCUSD, +6.65% is currently trading for about $7,000; the world’s largest digital currency is up more than 600% thus far this year. It currently has a market capitalization of $117.7 billion, according to data website CoinMarketCap, making it larger than such companies as Honeywell International Inc. HON, -1.00% Texas Instruments Inc. TXN, -0.11% and Goldman Sachs Group Inc. GS, +0.53% The market cap of the entire crypto space is $191.6 billion.
Earlier this year, the Securities and Exchange Commission nixed a proposed rule change that would have cleared the way for the first exchange-traded fund to track bitcoin. Other attempts to bring such a fund to market were subsequently withdrawn; the recent news that the CME Group plans to kick off a futures contract based on bitcoin was seen as easing the path to one being approved at some point in the future.
There are still ETFs that offer indirect exposure to bitcoin, through use of the Bitcoin Investment Trust GBTC, +9.47% which operates as a private, open-ended trust that invests solely in bitcoin, with the value of its shares entirely derived from price moves in bitcoin. Magoon suggested that the Trust might be among the holdings of the Blockchain ETF.
<<<
>>> The Only Russia Story That Matters
By James Rickards
October 6, 2017
https://dailyreckoning.com/russia-story-matters/
The Only Russia Story That Matters
The World Gold Council has reported that the Central Bank of Russia has more than doubled the pace of its gold purchases, bringing its reserves to the highest level since Putin took power 17 years ago.
Russia’s desire to break away from the hegemony of the U.S. dollar and the dollar payment system is well-known. Over 60% of global reserves and 80% of global payments are in dollars. The U.S. is the only country with veto power at the International Monetary Fund, the global lender of last resort.
Perhaps Russia’s most aggressive weapon in its war on dollars is gold. The first line of defense is to acquire physical gold, which cannot be frozen out of the international payments system or hacked.
With gold, you can always pay another country just by putting the gold on an airplane and shipping it to the counterparty. This is the 21st-century equivalent of how J.P. Morgan settled payments in gold by ship or railroad in the early 20th century.
Russia has now tripled its gold reserves from around 600 tonnes to 1,800 tonnes over the past 10 years and shows no signs of slowing down. Even when oil prices and Russian reserves were collapsing in 2015, Russia continued to acquire gold.
But Russia is pursuing other dollar alternatives besides gold.
For one, it’s been building nondollar payments systems with regional trading partners and China.
The U.S. uses its influence at SWIFT, the central nervous system of global money transfer message traffic, to cut off nations it considers to be threats.
From a financial perspective, this is like cutting off oxygen to a patient in the intensive care unit. Russia understands its vulnerability to U.S. domination and wants to reduce that vulnerability.
Now Russia has created an alternative to SWIFT.
The head of Russia’s central bank, Elvira Nabiullina, has reported to Vladimir Putin that “There was the threat of being shut out of SWIFT. We updated our transaction system, and if anything happens, all SWIFT-format operations will continue to work. We created an analogous system.”
Russia is also part of a reported Chinese plan to install a new international monetary order that excludes U.S. dollars. Under that plan, China could buy Russian oil with yuan and Russia could then exchange that yuan for gold on the Shanghai exchange.
Now it appears Russia has another weapon in its anti-dollar arsenal.
Russia’s development bank, VEB, and several Russian state ministries are reportedly teaming up to develop blockchain technology. They want to create a fully encrypted, distributed, inexpensive payments system that does not rely on Western banks, SWIFT or the U.S. to move money around.
This has nothing to do with bitcoin, which is just another digital token. The blockchain technology (now often referred to as distributed ledger technology, or DLT) is a platform that can facilitate a wide variety of transfers — possibly including a new Russian-state cryptocurrency backed by gold.
“Putin coins,” anyone?
The ultimate loser here will be the dollar. That’s one more reason for investors to allocate part of their portfolios to assets such as gold.
Regards,
Jim Rickards
for The Daily Reckoning
<<<
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>>> The Government Crackdown on Bitcoin
By James Rickards
September 25, 2017
https://dailyreckoning.com/government-crackdown-bitcoin/
The Government Crackdown on Bitcoin
Many advocates of bitcoin and other cryptocurrencies have a naïve belief that their digital assets are “beyond the reach of governments,” “cannot be traced” and “cannot be frozen or seized.”
But it’s really not true.
On Sept. 12, China announced that it was banning the launch of initial coin offerings (ICOs) in China and closing all Chinese bitcoin exchanges. The next day, it was reported that China demanded the books and records of those exchange customers and all transactions.
From there, it’s just a short step to arresting customers for violating foreign exchange and tax regulations in China.
The attack on bitcoin does not stop with China.
North Korea’s cyber-brigades have hacked into South Korean bitcoin exchanges both to steal customer bitcoins and demand bitcoin ransom to cease the attacks. North Korea is building up a bitcoin stash to pay for weapons and food as the U.S. ramps up sanctions on conventional banking channels.
This operation reflects the fact that using bitcoin on the dark web is a haven for criminals, arms dealers, tax evaders and state enemies of the U.S. How long will it be before the U.S. joins the effort to shut down, interdict and disrupt bitcoin message traffic on the dark web and the bitcoin exchanges themselves?
Bitcoin prices fell 40% in response to these and other developments before stabilizing to some extent. But it remains highly volatile.
Now, I said it last week, but I’ll say it again…
When it comes to cryptocurrencies like bitcoin, I take a laissez-faire approach. Do your own thing. If you want some bitcoin in your portfolio as part of a diversified bundle of assets, that’s up to you. If you want to speculate in some of the other lesser-known cryptocurrencies, that’s fine, too. You might make a lot of money.
My only advice is buyer beware. You need to take the time to understand how it works and what the risks are.
Governments enjoy a monopoly on money creation and they’re not about to surrender that monopoly to cryptocurrencies like bitcoin.
But governments know they cannot stop the technology platforms on which the cryptocurrencies are based. Blockchain technology has come too far to turn back. These are usually called the “blockchain,” but a more descriptive term now in wide use is “distributed ledger technology,” or DLT.
There’s no denying that fortunes have been made and still will be made in various DLT applications.
And while I’m not necessarily a fan of individual cryptocurrencies, I am a believer in this technology.
Governments don’t want to kill it; they want to control it.
They seek to do so using powers of regulation, taxation, investigation and ultimately more coercive powers, including arrest and imprisonment of individuals who refuse to obey government mandates with regard to blockchain.
As I also explained last week, blockchain depends on critical infrastructure, including servers, telecommunications networks, the banking system and the power grid, all of which are subject to government control, as the Chinese action shows.
That’s the back door governments will use to regulate and control the blockchain.
There’s something else to consider about cryptocurrencies…
If the power grid goes down for whatever reason (ask Puerto Rico after Hurricane Irma), good luck accessing your bitcoins. Bitcoin may have made you a millionaire on paper. But what good does it do if you can’t access it when you need it most?
People will always accept gold and silver in emergency situations. My advice is to stock up before the crisis strikes.
They will be unavailable once a crisis arrives.
I was actually singled out in this past Saturday’s New York Times for my advice on “how to survive the apocalypse.”
Holding gold, silver and other hard assets is definitely part of that plan.
Regards,
Jim Rickards
for The Daily Reckoning
<<<
>>> BTL Group (BTLLF)(TSXV:BTL)
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=134644005
Market cap: $62.59 million; current share price: $3.34
BTL is a Vancouver-based company that offers blockchain solutions across multiple industries–from banks to energy, and even to fantasy sports. BTL has a money transfer platform using distributed-ledger-technology and smart contracts, called Interbit.
On that note, the company announced in June that it is “taking steps towards a go-to production phase” of the Interbit, having completed its European energy trading pilot. As noted in the press release, the 12-week pilot included building the framework on an energy trading confirmation solution to BTL’s platform, which was tested in 8 different scenarios.
“At BTL we truly believe that, by using blockchain technology and our proprietary platform, Interbit, there is a better and more efficient way for enterprises to build applications,” Guy Halford-Thompson, cofounder and CEO of BTL said. “Having demonstrated the reductions in risk and cost savings that are achievable we now have an opportunity to deliver the first successful blockchain based application to the energy market. We are also very excited that the pilot has enabled participating companies to better understand the benefits of Interbit and identify other areas in their organizations where they can apply it.”
At the end of August, BTL Group announced the beta launch of Interbit as it becomes closer to being launched in live commercial environment.
While the company’s headquarters are in Vancouver, BTL Group also operates in Calgary and Canary Wharf in London, England.
<<<
>>> BTL Group Ltd., a technology company, focuses on developing blockchain technologies for businesses across various industries. The company?s Interbit is a secure multi-chain technology platform that allows enterprises to build their own applications focusing on trading, settlement, remittance, audit, and back-office processes. Its technology platform is a remittance business, known as Xapcash, which, combined with its proprietary technology, Interbit, is focused on leveraging blockchain technology to create ?cash-in cash-out? settlement solutions from Canada and the United Kingdom to target countries. BTL Group Ltd. primarily serves finance, energy, and gaming sectors. The company is headquartered in Vancouver, Canada. <<<
https://finance.yahoo.com/quote/BTLLF/profile?p=BTLLF
>>> 7 Blockchain Technology Stocks
Fintech Investing
Jocelyn Aspa
September 13, 2017
https://investingnews.com/daily/tech-investing/fintech-investing/blockchain-technology-stocks/
Banks, financial institutions and many others are adopting blockchain technology faster than anticipated. INN takes a look at public companies taking advantage of this rapidly-growing sector.
blockchain technology stocks
It’s getting harder to ignore the fact that blockchain is on the rise, particularly as more banks and financial institutions are adopting the technology faster than anticipated.
Case in point, IBM (NYSE:IBM) released a report in 2016 suggesting that 15 percent of all banks will be using the technology in 2017. By 2020, the firm states that 66 percent of all banks will have blockchain in commercial production.
On a broader scale, a Market and Markets report states that the blockchain technology market size will be worth 2.3 billion by 2021, increasing at a compound annual growth rate (CAGR) of 61.5 percent. In other words, there’s room for plenty of opportunities for investors to benefit from in this exciting–and expanding–market.
“Do you want to profit from tech companies who are shaking up the banking industry?”
Global Blockchain Technology Market’s research report is a little more conservative, projecting that blockchain technology will grow at a CAGR of 55.59 percent between 2017 and 2021.
The banking and finance industries aren’t the only ones adopting blockchain technology. For example, it has been used in securing elections, and big companies are also making the leap into blockchain; Capital One has confirmed a blockchain project, partnering with Gem on healthcare claims.
Putting it simply, there’s a wealth of opportunity to be had in the blockchain industry, and it’s only getting started. As such, here is a look at 7 publicly-listed blockchain technology stocks for your consideration.
1. BTCS (OTCQB:BTCS)
Market cap: $8.91 million; current share price: $0.09
The first of our blockchain technology stocks is BTCS. The company is also the first blockchain-focused public company in the US, and was ahead of its time in exploring digital currency ecosystems. The company self-describes itself as an “early mover” in the digital currency ecosystems sector.
The company’s CEO, Charles Allen, was interviewed by Bloomberg explaining the company’s mission to “gather a currency that can be spent on goods and services”, using bitcoin to buy products like televisions.
In August, BTCS announced it had signed a non-binding letter of intent to merge with Blockchain Global.
2. BTL Group (TSXV:BTL)
Market cap: $62.59 million; current share price: $3.34
BTL is a Vancouver-based company that offers blockchain solutions across multiple industries–from banks to energy, and even to fantasy sports. BTL has a money transfer platform using distributed-ledger-technology and smart contracts, called Interbit.
On that note, the company announced in June that it is “taking steps towards a go-to production phase” of the Interbit, having completed its European energy trading pilot. As noted in the press release, the 12-week pilot included building the framework on an energy trading confirmation solution to BTL’s platform, which was tested in 8 different scenarios.
“At BTL we truly believe that, by using blockchain technology and our proprietary platform, Interbit, there is a better and more efficient way for enterprises to build applications,” Guy Halford-Thompson, cofounder and CEO of BTL said. “Having demonstrated the reductions in risk and cost savings that are achievable we now have an opportunity to deliver the first successful blockchain based application to the energy market. We are also very excited that the pilot has enabled participating companies to better understand the benefits of Interbit and identify other areas in their organizations where they can apply it.”
At the end of August, BTL Group announced the beta launch of Interbit as it becomes closer to being launched in live commercial environment.
While the company’s headquarters are in Vancouver, BTL Group also operates in Calgary and Canary Wharf in London, England.
3. Coinsilium Group (ISDX:COIN)
Market cap: GB$3.62 million; current share price: GB$3.25
Coinsilium Group is a London-based blockchain technology investor that develops and invests in blockchain technologies, aiding new fintech applications. The company is the world’s first recognized IPO for blockchain technology company and lists on the NEX Exchange, a recognized investment exchange as per the Financial Services and Markets Act 2000.
According to its website, Coinsilium is relatively new in the blockchain field: the company has been actively involved in “accelerating seed-stage blockchain tech ventures” ever since 2014.
At the beginning of August, the company announced that it had completed the sale of interest in SatoshiPay, a company that processes nanopayment transactions usually in the form of bitcoins. Meanwhile, closer to the end of August Coinsilium Group announced a formation of its wholly-owned subsidiary, Terrastream, which aims to build an enterprise standard blockchain-powered platform for token-based alternative funding solutions.
4. DigitalX (ASX:DCC)
Market cap: AU$6.79 million; current share price: AU$0.064
Next on our blockchain technology stocks list is DigitalX. The company develops fintech products and services using blockchain technology and a secure ledger system for the global digital payments industry, specifically in mobile bill payments and remittance.
More specifically, its mobile product AirPocket provides consumers secure cross-border payments and remittances from over 30,000 payout locations in 14 countries with a heavy presence in North America and South America.
In September, it was announced that DigitalX and Stargroup (ASX:STL) have joined forces to develop “two way” bitcoin ATMs to buy and sell bitcoin.
5. First Bitcoin Capital (OTCMKTS:BITCF)
Market cap: $108.75 million; current share price: $0.23
First Bitcoin Capital, fifth on our blockchain technology stocks list, bills itself as the first vertically integrated consolidator in the bitcoin and crypto-currency arena. The company is focused on the acquisition of bitcoin startups and funding companies developing bitcoin software and hardware.
Although bitcoin is blockchain’s favourite child, blockchain is no longer living vicariously through it. Although blockchain is most understood as the backbone of bitcoin, it is now standing tall in different spheres of applications.
With that in mind, the company is working on a number of projects, including: CoinQX, Bitessentials, BitClassTravel, Bitcoin.cc & Bitcoin ATM.
On August 2, the company announced that it will be the first company to pay dividends to its shareholders via cryptocurrencies.
That being said, the SEC suspended trading of First Bitcoin Capital’s shares on August 24 until at least September 7 due to its share price rocketing more than 6,000 percent so far this year.
“The Commission temporarily suspended trading in the securities of BITCF because of concerns regarding the accuracy and adequacy of publicly available information about the company including, among other things, the value of BITCF’s assets and its capital structure,” the statement read.
First Bitcoin Capital then issued its own statement, stating the company has not accessed capital markets from “the day we began developing cryptocurrencies until this day.”
6. Global Arena Holding (OTCMKTS:GAHC)
Market cap: $6.45 million; current share price: $0.014
Global Arena Holding acquires companies and patents that use the blockchain crypto technology. They invested in Blockchain Technologies Corporation, a startup accelerator who have developed a patent pending voting technology.
They are also working on applying blockchain technology to ATMs. Smart contracts can be used in wills, eliminating the need for estate executors, triggering a chain of events starting with verifying the death and subsequent asset distribution. CEO John Matthews claims “the Blockchain will evolve to be as crucial as the Internet itself and many time more valuable.”
In August, the company announced that its subsidiary, Global Election Services announced the implementation of new software and hardware to use in ballot scanning during the tabulation process.
7. HashingSpace (OTCMKTS:HSHS)
Market cap: $3.67 million; current share price: $0.022
Rounding out the blockchain technology stocks list is HashingSpace–a company that is undergoing restructuring, the new management stated that it is going to focus on providing the tools needed to develop future blockchain technologies.
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>>> North Korea is dodging sanctions with a secret bitcoin stash
Bloomberg
Yuji Nakamura and Sam Kim
9-13-17
http://www.msn.com/en-us/news/other/north-korea-is-dodging-sanctions-with-a-secret-bitcoin-stash/ar-AArJ5Cu?OCID=ansmsnnews11
North Korean state-sponsored hackers are trying to steal bitcoin to evade sanctions
North Korea appears to be stepping up efforts to secure bitcoin and other cryptocurrencies, which could be used to avoid trade restrictions including new sanctions approved by the United Nations Security Council.
Hackers from Kim Jong Un’s regime are increasing their attacks on cryptocurrency exchanges in South Korea and related sites, according to a new report from security researcher FireEye Inc. They also breached an English-language bitcoin news website and collected bitcoin ransom payments from global victims of the malware WannaCry, according to the researcher.
Kim’s apparent interest in cryptocurrencies comes amid rising prices and popularity. The same factors that have driven their success -- lack of state control and secretiveness -- would make them useful fund raising and money laundering tools for a man threatening to use nuclear weapons against the U.S. With tightening sanctions and usage of cryptocurrencies broadening, security experts say North Korea’s embrace of digital cash will only increase.
“We definitely see sanctions being a big lever driving this sort of activity,” said Luke McNamara, a researcher at FireEye and author of the new report. “They probably see it as a very low-cost solution to bring in hard cash.”
The 15-member Security Council on Monday approved sanctions aimed at punishing North Korea for its latest missile and nuclear tests. U.S. officials said the new measures would cut the country’s textile exports by 90 percent, restricting its ability to get hard currency.
So far this year, FireEye has confirmed attacks on at least three South Korean exchanges, including one in May that was successful. Around the same time, local media reported that Seoul-based exchange Yapizon lost more than 3,800 bitcoins (worth about $15 million at current rates) due to theft, although FireEye said there are not clear indications of North Korean involvement.
North Korea’s telecommunications ministry didn’t respond to an emailed request for comments. The country’s diplomats and official media have denied the country played any role in cyberattacks, including the hacking of Sony Pictures Entertainment in 2014.
North Korea Hacks Coincide With Bitcoin Rally© Bloomberg North Korea Hacks Coincide With Bitcoin Rally
North Korea operates what South Korea believes is an army of hackers expanding its focus from military espionage to financial theft. The regime’s Reconnaissance General Bureau, which directly reports to Kim Jong Un, handles peacetime cyber operations from espionage to network disruptions and employs an estimated 6,000 officers, according to a 2016 report from the International Cyber Policy Centre at the Australian Strategic Policy Institute.
In the recent round of attacks, South Korea may have become a target not just due to its proximity to Pyongyang and shared language, but because the country has become one of the busiest trading hubs for cryptocurrencies this year. Seoul-based Bithumb is the world’s biggest exchange for ethereum. In June, it said hackers had stolen customer information from an employee’s computer, without identifying the attackers.
"As more money goes into cryptocurrency exchanges and more people buy bitcoin and ethereum, exchanges become larger targets for this group,” said McNamara. He said so far he did not have evidence that Kim Jong Un’s regime has targeted cryptocurrency exchanges outside of South Korea, but did not rule out the possibility in the future.
Besides exchanges, FireEye said an English-language bitcoin news website was breached by North Korea, which would likely allow hackers to identify people visiting the site. It declined to name the website and said it believes North Korea prefers larger targets like exchanges than individual owners of cryptocurrencies.
The firm said previously it had found a connection between Pyongyang and the WannaCry attack from May and June, which affected more than 300,000 computers worldwide. McNamara said he also sees indications North Korean hackers are getting involved in cryptocurrency mining.
Attacks on the South Korean exchanges were carried out through so-called spear-phishing attacks, or emailing files laced with malware to specific targets. FireEye identified the malware, known as PEACHPIT, and provided examples of documents it was attached to, including one published by Seoul-based Hyundai Research Institute about the state of bitcoin industries. When contacted, the author of the report confirmed he wrote it in 2014, but was unaware that someone was distributing a press release about it this year.
The group behind the hacks, which FireEye identified as TEMP.Hermit, has made a name for itself out of bitcoin theft, including a 2015 attack on South Korea’s nuclear industry. The hackers have also been tied by other security firms to last year’s attack on Samsung Electronics Co.’s corporate messenger app and, most prominently, the breach of Sony Corp.’s film studio, which the FBI blamed on North Korea.
"They’re pretty capable actors in comparison to other North Korean activity we see,” said McNamara. "They’ve been creative in how they use their cyber-espionage capability."
The malware used in bitcoin hacks is linked to the group suspected of attacks on the payment systems of global banks last year, according to FireEye. The FBI is also examining North Korea’s link to the theft of $81 million through the New York Fed last year, Bloomberg Markets reported last month.
FireEye said if the hackers wanted to convert bitcoin or ethereum into dollars or won, they’d likely first exchange them into harder-to-trace cryptocurrencies like Monero and then into fiat currency. A similar technique was used last month to empty the bitcoin wallets related to WannaCry.
“They could compromise an exchange and transfer those bitcoins to other exchanges elsewhere in Asia or exchange them for a more anonymous cryptocurrency,” said McNamara. “There are variety of things they could do to cash out.”
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CuriousWon on Litecoin -
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=134537080
>>> Reasons why I believe in Litecoin:
1. Strong, united development community.
As you've seen with Bitcoin’s recent forks, having disagreement among the developers can lead to difficult situations. The first hard fork with bitcoin cash was one thing, the next one coming up is looking even more dire. Litecoin's developers are ACTIVE (unlike a lot of cryptos which the devs abandoned), and have a solid roadmap, looking to add tons of new features and functionality. Check out the roadmap here: https://litecoincore.org
2. Performance!
Litecoin processes blocks 4 times faster than bitcoin (every 2.5 mins vs every 10). I've experience this first hand when performing transactions, with Litecoin taking signifanctly less time to clear than Bitcoin or Ether.
3. Scalability.
They implemented SegWit with no political doldrums, the network scalability is much less prone to bottlenecks like Bitcoin is in its current state. It also leverages scrypt algorithm eather than SHA-256, which makes mining (and thus, the entite network) more scalable.
4. Acceptance
5. Again, development, two big things being:
A. Lightning Network
Litecoin may be the first to implement the lightning network, allowing for instant payments, even greater scalability, lower fees, and even "atomic swaps" (trading once currency for another that uses the same fryptographic hash algorithm).
B. Smart Contracts
Ethereum? How about Litecoin! The developers are working on adding anonymous smart contract support as well. It may be too late for Litecoin to grab a significant portion of this market, but who knows? Regardless, it's additional functionality which I feel, when paired with the other features and benefits of Litecoin, will add value and become leveraged to some extent.
Litecoin has also generally been, up until about the last 2 weeks, more stable than others, and better able to hold on to gains. The explosive growth end of August has changed this, but we are still hovering ar 65-70, much higher than the 45 before the run.
For the reasons above, I think the tech and promise of Litecoin is much more favorable than other cryptocurrencies. I also think the ambitious roadmap will only reinforce Litecoins favorability, paving the way for more growth, both in price and in function.
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>>> Grayscale Investments Launches $10 Million Ethereum Classic Private Fund
by Alex Lielacher
Apr 28, 2017
https://bitcoinmagazine.com/articles/grayscale-investments-launches-10-million-ethereum-classic-private-fund/
The U.S. investment management company Grayscale Investments LLC has launched the first-ever private fund that invests in the digital currency ethereum classic (ETC) with $10 million in seed capital. The new fund is called the Ethereum Classic Investment Trust.
Grayscale Investments, an investment subsidiary of the Digital Currency Group (DCG) founded by entrepreneur and investor Barry Silbert, has raised $10 million in seed capital from the Digital Currency Group, Silbert himself and Glenn Hutchins, co-founder of the private investment firm Silver Lake and board member of DCG, NASDAQ and AT&T. The purpose of the fund is to track the price of the digital currency ethereum classic (ETC), which was created a little under a year ago following the Ethereum hard fork. Ethereum Classic provides developers with the opportunity to create smart contracts as well as decentralized apps.
Ethereum Classic has since emerged as one of the leading digital currencies in the market in terms of market capitalization and investor interest. The all-time high of ethereum classic was $5.11 on April 27, and its market capitalization currently stands at around $440 million, making it the sixth largest digital currency in the market according to CoinMarketCap.
“I’m excited about Ethereum Classic, as opposed to Ethereum (ETH), because ETC has a fixed supply and the potential to serve as the smart contract and micropayment layer to the Internet of Things,” Silbert said to Bitcoin Magazine.
The Ethereum Classic Investment Trust is set up with a similar structure as Grayscale’s Bitcoin Investment Trust, the only publicly traded bitcoin investment vehicle in the U.S., which launched as a private vehicle in 2013 and began being publicly traded in 2015. The new fund allows investors to hold ETC without needing to go through the technical hassle of purchasing and securely storing the digital coins.
The fund is launching at a time when the digital currency market is witnessing new all-time highs in its two largest currencies, bitcoin and ether, as well as an impressive rally in altcoins, such as Litecoin, Ripple, DASH as well as ethereum classic.
“As investors have grown more interested in digital currency as an asset class, we’ve also seen growing frustration with the difficulty in purchasing non-bitcoin digital currencies,” Silbert told Reuters when he first announced his intentions to launch the Ethereum Classic Investment Trust at the beginning of March.
“We’re excited to launch a fund for ethereum classic to satisfy the growing interest we are seeing in ETC from more mainstream investors,” he added.
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>>> Segwit2x Dev. Jeff Garzik Expelled from Bitcoin Core Repository
by Josiah Wilmoth
22/08/2017
https://www.cryptocoinsnews.com/segwit2x-dev-jeff-garzik-expelled-from-bitcoin-core-repository/
The bitcoin scaling debate heated up over the weekend, following a controversial blog post from payment processor BitPay. In the post, the company urged users to update their nodes before Segwit activation to avoid security risks. What incited controversy is that they directed people to download btc1 nodes, which are designed for Segwit2x implementation. BitPay is a New York Agreement signatory, so it’s not surprising that they want to promote btc1. However, many prominent figures accused BitPay of using deceptive–or even fraudulent–tactics to accomplish their goal. In reaction to the post, BitPay was removed from Bitcoin.org.
Segwit2x Dev. Jeff Garzik Expelled from Bitcoin Core Repository
That same day, Segwit2x developer Jeff Garzik was expelled from the Bitcoin Core repository on Github. Garzik tweeted that his removal from the repository was indicative of a “culture of reprisals.”
That this happened was not surprising; as Peter Todd noted, Garzik–who opposes Core’s position on scaling–has not made any significant contributions to the repository since 2014.
However, the timing of Garzik’s expulsion is very significant. He could have been removed at any point over the last several years for his inactivity, but it happened now, just as the Core and Segwit2x factions have grown increasingly hostile toward one another. Noting that they appear to have most of the network hashpower on their side, Segwit2x supporters claim that the Core version of bitcoin will be a “dysfunctional minority chain” once the Segwit2x hard fork takes place in November. Core supporters deride Segwit2x as an altcoin (which some have nicknamed Jeffcoin) or an attempt at a hostile corporate takeover.
Tempers Flare Over Lack of Replay Protection
Tempers have particularly flared over the issue of replay protection. Replay protection ensures that two blockchains and currencies with shared histories remain separate. Without these protections, an attacker can initiate a replay attack, whereby he broadcasts a transaction on both chains. Bitcoin cash, for instance, implemented this security measure to prevent replay attacks following its hard fork, along with choosing a new name to (somewhat) reduce user confusion.
Following the Segwit2x chain split in November, there will again be two different versions of the bitcoin protocol. This time, both versions claim that theirs is the real “Bitcoin,” while the other is not. Both users and exchanges will have to grapple with how to navigate that murky situation.
The lack of branding differential will create a great deal of confusion, but there is more at stake. Thus far, Segwit2x has not committed to implementing replay protection into the btc1 protocol, implying that the onus is on Bitcoin Core to add protection to the “legacy” chain. Core repudiated that position in a recent blog post, stating:
“It is irresponsible to ignore the outcome of these events when planning for the future. As an example, we’ve seen the confusion that arises when a single address is valid across two chains, yet the Segwit2x proposal intends to repeat the same mistake. Furthermore, BCH’s implementation of strong replay protection provided significant protection to users of both BCH, as well as Bitcoin, something Segwit2x does not plan on providing.
If both development groups remain entrenched, it will be the users who suffer.
The renewed focus on this contentious debate has been accompanied by a decline in the bitcoin price. Since August 17, the bitcoin price has fallen from a record $4,467 to a present mark of $3,998 (per CoinMarketCap).
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>>> The World’s First Government ICO: Estonia Could Offer Its Own Token
by P. H. Madore
22/08/2017
https://www.cryptocoinsnews.com/estonia-could-offer-its-own-ico/
Estonia has taken to being at the forefront of the European blockchain revolution swimmingly, offering its e-residency program and now considering a way of offering currency to e-residents.
On a page that about the proposal, Vitalik Buterin is quoted as saying:
“An ICO within the e-Residency ecosystem would create a strong incentive alignment between e-residents and this fund, and beyond the economic aspect makes the e-residents feel like more of a community since there are more things they can do together.
The page does not list much in the way of details, but the idea seems simple enough. Further, the idea would incentivize people to become e-residents, so that they could have an international currency at their command as well. It’s important to note that the e-residency program has yet to run into any legal challenges from international governments or organizations. According to a blog on the subject:
“The ability to start a location-independent company is now the main ‘product’ that’s driving the growth of e-Residency. If we left it at this then it is likely that we could still achieve a respectable rate of growth (especially among the fast growing ‘digital nomad’ community) while solving a major problem facing our world, which is how to ensure everyone has the opportunity to benefit from entrepreneurship and rising e-commerce.
Now, suppose that anyone in the world can establish residency in Estonia and then establish a business, and then in that business they can transact in a government-issued digital currency. This currency can of course be used to pay the country’s minimal taxes. Local industries will be stimulated as a result, industries which cater to foreign residents who are trying to do such things as create businesses, acquire property, and so forth.
The whole thing begs the question of when other countries will begin to compete with Estonia for real estate in the blockchain kingdom. There are many islands that have sought to enter the 21st century in ways that enabled global participants to engage in mutually beneficial behavior with them – the .TK domain comes to mind, wherein people around the globe were able to get free top-level domains as well as purchase domains from a tiny island nation.
Another useful point to make is that global know-your-customer compliance can be easier achieved when digital residents become the norm. In the case of Estonian e-residents, selective information could be shared with agencies who needed it in order to verify the status of someone trying to do business or invest.
“The private sector is investing in products and services specifically for e-residents and there is a tremendous amount of excitement in how the secure digital identities offered by e-Residency can enable easier KYC and onboarding, therefore making the e-Residency community an attractive customer market for new online services.
In general, the Estonian program is exciting for blockchain enthusiasts looking to start businesses or simply wondering when the revolution will really begin. If people around the globe can seamlessly become citizens of another country through the magic of technology, then perhaps money can be liberated through technology as well.
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>>> Securing Food on a Blockchain: Walmart, Nestlé, Unilever Partner IBM
by Samburaj Das
23/08/2017
https://investorshub.advfn.com/secure/post_new.aspx?board_id=32392
Technology giant IBM has partnered the biggest names in the global food supply chain to launch a new blockchain consortium focused on food safety.
Some of the world’s biggest retailers and food companies are now working with IBM to identify key areas of the global food supply chain that can benefit from blockchain technology. The working group sees blockchain as the solution to improve food traceability and transparency in the supply chain. The consortium’s members include Dole, Driscoll’s, Golden State Foods, Kroger, McCormick and Company, McLane Company, Tyson Foods, Nestlé, Unilever and Walmart, working in partnership with technology provider and developer IBM.
“Unlike any technology before it, blockchain is transforming the way like-minded organizations come together and enable a new level of trust based on a single view of truth,” stated Marie Wieck, general manager of IBM Blockchain.
The ultimate goal will see all participants in the global food supply chain – growers, suppliers, processors, distributors, retailers, regulators and consumers – gain permissioned access to every point of data from the origin to the sale of the food product. IBM will provide its blockchain tech via its IBM Cloud platform for the consortium’s efforts.
Frank Yiannas, vice president of food safety at Walmart stated:
“Blockchain technology enables a new era of end-to-end transparency in the global food system- equivalent to shining a light on food ecosystem participants that will further promote responsible actions and behaviors.
Traceability in Seconds
IBM has already conducted blockchain pilots across a number of industries around the world including trade, pharma, retail and more. In October 2016, Walmart partnered IBM to digitally track the movement of pork in China, a nation which has seen a number of food safety scandals in recent years. The trials revealed that tracking a product from the very farm it originated from to the retailer’s shelf could be achieved in seconds, rather than days or several weeks.
Such efficiency can help food providers and retailers to trace a contaminated product to its very source in a matter of seconds to issue an effective food recall and stop the spread of diseases and illnesses.
Other notable efforts of tracking food supply on a blockchain include the United Nations’ World Food Programme (WFP) tapping the Ethereum blockchain, a Taiwanese e-commerce platform also using the Ethereum blockchain in its own supply chain and an Arkansas livestock farmers cooperative using blockchain tech to trace meat through the supply chain.
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>>> Microsoft’s Ethereum-Friendly Blockchain Framework ‘Coco’ Hits 1,600 Txns/Sec
by Samburaj Das
23/08/2017
https://www.cryptocoinsnews.com/microsofts-ethereum-friendly-blockchain-framework-coco-hits-1600-txnssec/
Microsoft has unveiled its newest blockchain protocol in the Confidential Consortium (Coco) framework, an open-source system aiming to provide large-scale, confidential blockchain networks for companies and organizations alike.
In an announcement this month, Microsoft revealed its Coco framework reduces the complexity of implementing current blockchain protocols to the operational and security needs of enterprises by solving critical hurdles in transaction speeds, confidentiality and distributed governance.
“Coco achieves this by designing specifically for confidential consortiums, where nodes and actors are explicitly declared and controlled,” explained Mark Russinovich, technology chief at Microsoft Azure, the technology giant’s cloud computing platform.
He added:
“Coco presents an alternative approach to ledger construction, giving enterprises the scalability, distributed governance and enhanced confidentiality they need without sacrificing the inherent security and immutability they expect.
By design, the framework will be built to work with any blockchain ledger protocol. Initial implementations will include developments with a number of enterprise-blockchain heavy-hitters including Ethereum, R3’s Corda, Hyperledger Sawtooth and JP Morgan’s Quorum. Notably, the framework also works with hardware-based trusted execution environments (TEEs) such Intel’s Software Guard Extensions (SGX) or the Windows Virtual Secure Mode (VSM.
Microsoft claims its Coco framework will be capable of scaling beyond speeds of 1,600 transactions per second when integrated with a blockchain network. The framework will also aim at a pioneering governance model for enterprise blockchain networks by establishing a network constitution where members can vote on all governing terms and conditions of the blockchain software.
“Coco will be compatible, by design, with any ledger protocol and can operate in the cloud and on premises, on any operating system and hypervisor that supports a compatible TEE,” Russinovich added.
Microsoft has released a technical white paper with a demo of the Coco framework prior to its launch on GitHub in 2018 as an open source project.
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>>> The Cryptocurrency Funds Have Arrived, And They're Bringing Wall Street Money
Mar. 6, 2017
Includes: ARKK, ARKW, COIN, GBTC
Kevin Gao
https://seekingalpha.com/article/4052276-cryptocurrency-funds-arrived-bringing-wall-street-money
Summary
•Cryptocurrency funds are a small but growing share of a $24B asset class.
•Public buy and hold funds like GBTC are the largest and best known.
•There are two others: Private buy and hold funds, and Hedge funds.
If 2013-2016 was the era of venture investment in bitcoin and blockchain startups - VCs put north of a billion dollars to work, peaking at $290M in the first half of 2016 - then 2017-2020 will in hindsight be seen as the Wall Street era. The startup equity investors have come and - in the absence of unicorn valuations or breathtaking growth - they're starting to move on. But now the bitcoin and cryptocurrency funds have arrived, and they've brought public markets investors with them.
Just about every week I'll discover a new investment fund that gives investors liquid exposure to the cryptocurrency asset class. At latest count, there are at least 5 exchange-listed bitcoin investment products, 3 U.S.-based ETFs under review by the SEC, and hedge funds that cover just about every cryptocurrency asset type and investment strategy. By my estimate, these funds represent roughly 5-10% of the $24B in total that's now invested in cryptocurrencies.
For clarity, I define a cryptocurrency fund as a pool of professionally managed capital, available to outside investors, where the majority of AUM are invested in publicly tradable cryptocurrency assets. Examples of such assets include bitcoin, ethereum, and the 500+ altcoins and 50+ digital tokens listed on Coinmarketcap. Thus venture capital funds who invest in shareholder equity of blockchain startups don't qualify.
I've sorted the different funds into three broad categories and wanted to give a description of each category along with some prominent examples. They are:
1.Publicly traded funds
2.Private buy-and-hold funds
3.Hedge funds
1. Publicly traded funds
These funds follow a buy-and-hold strategy and usually focus on a single asset. For now, all of them are bitcoin-only, although I expect publicly traded ethereum funds to come online perhaps as early as this year.
A management fee is charged for the service, which ranges from 1.5-2.5% per year. As more funds enter the space, fees will likely decrease, perhaps to below 1% which is what most vanilla ETFs charge. You may wonder why anyone would invest in a public bitcoin fund when you can just buy bitcoin and hold it yourself, but you could ask the same of gold. The biggest gold ETF - the SPDR Gold Trust - manages $35 billion USD. That's double the bitcoin market cap - all in one ETF. The attractions for investors are varied, from ease of access to peace of mind to lighter regulatory regimes. The consistent price premium of Grayscale's Bitcoin Investment Trust (OTCQX:GBTC) shares over the NAV of its bitcoin holdings is more evidence that such vehicles are desired.
Within the cryptocurrency universe, there are roughly two types of such funds: ETFs and ETNs (what are also called asset backed notes). The main difference is that an ETF's value is collateralized by an equivalent value of its underlying benchmark asset and allows an investor to redeem their ETF shares for the asset.
An ETN doesn't allow redemption and doesn't make the same guarantees about how much e.g. bitcoin it actually holds. An ETN is better thought of as unsecured debt that roughly tracks the price of its benchmark asset but has looser reporting and compliance requirements. Because of these differences, ETNs are a bigger credit risk, and we've already seen this risk manifest when KNC Miner filed for bankruptcy. KNC Miner was the guarantor of the COINXBT and COINXBE ETNs on the Nasdaq Nordic, and the bankruptcy filing forced trading to a halt. Two weeks later, the investment firm Global Advisors stepped in and became the new guarantor and trading was allowed to resume.
Examples of bitcoin ETNs include BTCETI (which is co-listed on the Gibraltar Stock Exchange and the Deutsche Borse) and the above-mentioned Global Advisors' COINXBT and COINXBE.
Thus far no bitcoin ETFs have been approved. There are three U.S.-based funds under review by the SEC. They are, in order of their filing:
•COIN from Winklevoss Bitcoin Trust
•XBTC from SolidX Bitcoin Trust
•GBTC from Bitcoin Investment Trust
GBTC is a hybrid, in that it's currently an ETN which is filing to become an ETF. While it has filed for a $500M IPO on NYSE Arca to become an ETF, it is currently traded on the U.S. OTC exchanges and doesn't allow redemption of shares into bitcoin.
The only ETFs with bitcoin exposure are Ark Investment Management's ARK Innovation ETF (NYSEARCA:ARKK) and ARK Web x.0 ETF (ARKW), but these hardly count as official cryptocurrency ETFs because both hold less than 0.3% of their portfolio in GBTC.
Bitcoin IRA is an interesting outlier in that it's a public bitcoin investment fund, available to any investors who have or want to open an IRA, a type of U.S. retirement savings account. They allow the redemption of bitcoin, but the company is not listed on any publicly traded exchange. You must contact them directly to invest. Bitcoin IRA charge a 15% one-time upfront fee of any money invested.
Finally, while the publicly traded funds are all bitcoin, the ethereum funds are coming. One example is the EtherIndex Ether Trust which filed in July 2016 with the SEC to be listed on the NYSE Arca, but has seen little activity since. Here are my notes on its filing. I have seen some other ethereum-based efforts and I expect at least one will be approved for public trading this year.
2. Private buy-and-hold funds
These differ from public investment funds in that they usually have restrictions either on investment size (e.g., $100K USD and above) or status (e.g., accredited investors only). They're not listed on publicly traded exchanges, without the attendant regulatory requirements and investment disclosures, and you can't use investment software like Bloomberg to obtain quotes and place trades. But otherwise the strategy and product and fees are similar: they offer investors comparatively simple and safe exposure to cryptocurrency and charge an annual fee for the service.
The best known example is probably the Pantera Bitcoin Fund. Pantera Capital is a blockchain investment firm which has multiple funds. One of them specializes in equity investments of blockchain startups. The one relevant for our discussion is a private bitcoin buy-and-hold fund which has over $100M in AUM and charges 0.75% annual management fee and a 1% fee for redemption.
An ethereum example is Grayscale's Ethereum Investment Trust, which has not formally launched but will be a private product that provides qualified investors access to Ethereum Classic.
DLT10 Index is an interesting example of a private buy-and-hold fund which offers a proprietary basket of 10 publicly traded cryptocurrency assets. The index is a mixture of leading cryptocurrencies and digital tokens, with a preference for enduring assets.
3. Hedge funds
Last we have cryptocurrency hedge funds. A hedge fund is a pool of lightly regulated capital that invests in whatever it likes within some broad strategic parameters. They have active trading strategies including e.g., leveraged trading, price arbitrage, and algorithmic trading. In addition to charging a management fee comparable to the above two types of funds, they also charge a performance fee that in this space can range from 15-45%. The performance fee is only paid out when the hedge fund beats an agreed-upon benchmark, such as the price of bitcoin. So if a hedge fund can generate better returns than simply owning bitcoin, they're paid very well for doing so. This benchmark outperformance is called alpha.
Known cryptocurrency hedge funds include:
• Global Advisors - a Jersey bitcoin fund that is the sponsor of COINXBT and COINXBE
•Polychain - a U.S. fund digital token and ICO fund started by Coinbase's first employee, Olaf Carlson-Wee and seeded with a $10M investment from prominent VC firms
• Metastable - a U.S. bitcoin and altcoins fund which counts some prominent Silicon Valley names among its investors
• Logos Fund - a German bitcoin and mining fund from the founders of Genesis Mining
I believe the above-mentioned funds are all actively seeking outside investment. Coinfund.io is an example of a cryptocurrency hedge fund which is no longer taking outside investors. They focus on digital token investment, what are often called ICOs, and host a knowledgeable and active community chat on Slack.
A final interesting example is the TaaS fund (Token-as-a-Service), which will exist on the Ethereum blockchain and in March will sell up to $100M of their tokens via the ICO process. The fund will keep some proceeds to fund operations and invest the remainder in a proprietary mixture of bitcoin, altcoins, and other digital tokens. Token holders will receive an ongoing percentage of trading profits.
The hedge fund space - of the three categories - is likely to see the most growth and proliferation because of its light regulatory touch, the speed to market, and the chance for fund managers to make outsized profits in a still volatile and developing asset class.
The next 3 years are a window of opportunity for starting and investing in cryptocurrency funds
We've entered a golden era of professionally managed money moving into liquid cryptocurrency assets. The risks that prevented Wall Street investor types from entering the market earlier - lack of liquidity, regulatory uncertainty, China trading centralization, lack of sophisticated financial products - are now reduced enough that those hungry for returns have taken the lead and others are starting to follow.
There's no better time to start a fund or raise one, and there's no better time to take a cryptocurrency position if you manage money, especially when you consider the past price performance of cryptocurrency assets and research that proves bitcoin's lack of correlation with existing asset classes. An approved U.S. bitcoin ETF will only add fuel to the growing fire.
In the coming years, the above-mentioned three funds types will expand and evolve: Hedge funds will grow larger and develop more exotic trading strategies, increasingly blending cryptocurrency with mainstream asset classes like equities and commodities. Private funds will diversify from one cryptocurrency asset to multiple assets and seek listing on exchanges. Finally, publicly traded funds will expand from bitcoin to ethereum and then cryptocurrency indexes, and fees will likely come down as competition grows
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>>> Savvy Publicly Traded Bitcoin Players Contributing to Cryptocurrency's Widespread Adoption
July 13, 2017
PRNewswire
http://www.marketwatch.com/story/savvy-publicly-traded-bitcoin-players-contributing-to-cryptocurrencys-widespread-adoption-2017-07-13-82033152
Bitcoin is rapidly being adopted and accepted as a valid form of payment, with major retailers like Overstock.com, Microsoft and Subway[1] among several U.S. companies that now accept digital currency - or cryptocurrency - as a form of payment. Japan adopted bitcoin as an official currency in April 2017, which has been a major step forward for this cryptocurrency on a global scale. Savvy companies are rushing to profit from the growing acceptance of bitcoin, whether by aiding further accessibility or by applying digital currency as a payment solution for high-risk industries that are considered 'unbankable'. Standouts in the bitcoin rush include ChineseInvestors.com, Inc. , SinglePoint, Inc. , Bitcoin Investment Trust , BTCS, Inc. (BTCS) and Bitcoin Services, Inc. .
One of the major attractions of bitcoin is that it facilitates the transfer of funds independent of banks and, therefore, cannot be regulated by governments. This is a major boon for industries like the rapidly growing legalized marijuana market, which is currently hobbled by federal restrictions in the U.S. that deprive it of FDIC approval and cooperation from banks. The majority of U.S. cannabis businesses have been forced to conduct cash transactions, which have been a serious hindrance, but the advent of bitcoin payment solutions could change everything.
One company making a bold foray into bitcoin as a solution for cannabis enterprises is ChineseInvestors.com [https://www.networknewswire.com/clients/chineseinvestors-com-ciix/?symbol=ciix ]. A leading financial information website for Chinese-speaking investors, CIIX recently announced (http://nnw.fm/w3pbB) that Chinesehempoil.com Inc., its wholly-owned subsidiary, will now accept bitcoin payments. This will allow purchasers of hemp-based health products, foods and beverages, to use bitcoin alongside other, more common methods of online payment such as credit cards and PayPal.
CIIX is focused on becoming the leading publicly traded Chinese medical marijuana company. As part of this mission, the company is engaged in investing in the distribution and R&D of cannabidiol-based (CBD) medicines and health products to Chinese-speaking consumers across the globe. While marijuana use is currently illegal in China, cannabis-based oils are legal, which gives CIIX access to a market of nearly 2 billion customers in China. The company is also expanding its business presence to other countries and recently incorporated CBD Biotechnology, Inc. in British Columbia, Canada, to focus on R&D and distribution of health products, including hemp-based CBD, food and beverage items, in that country.
Other recent milestones include the launch of http://www.ChineseCBDoil.com in the free-trade zone of Shanghai. The first CBD health products online store to launch in the Chinese language, ChineseCBDoil.com went live on January 31, 2017. Concurrent with the website's launch, CIIX debuted a Yelp-style social media app - the first Chinese language app of its kind - which features a database of cannabis dispensaries and marijuana strains. The app features a platform for reviewing and discussing cannabis products, maps showing the locations of marijuana dispensaries, and summary reports of marijuana business in Los Angeles and other major cities. The app has received approval from the Apple store.
Another company endeavoring to offer bitcoin as a payment solution for the cannabis industry is SinglePoint . SinglePoint recently joined forces with First Bitcoin Capital Corp. to develop a proprietary bitcoin payment solution that can be downloaded directly to any point-of-sale machine, enabling marijuana dispensaries and other cannabis businesses to accept debit and credit card payments. SinglePoint believes it has found a means of applying bitcoin technology in a way that will make the credit/debit card payment experience seamless for customers at cannabis dispensaries. SinglePoint has already successfully completed technology integrations with companies like Twilio, RedFynn and IATS, as well as with major carriers like Verizon, AT&T, T-Mobile and Sprint, and intends to utilize these integrations in developing its bitcoin payments technology.
Other publicly traded companies tuned into the pioneering opportunities associated with bitcoin technology are fueling its widespread adoption. Digital currency play Bitcoin Investment Trust (otcqx:GBTC) was recently named to OTC Markets Group's 'OTCQX Best 50' for 2017. GBTC is a U.S.-based, open-ended grantor trust sponsored by Grayscale Investments that is exclusively invested in bitcoin. The company's shares are the very first publicly quoted securities solely invested in and deriving value from the price of bitcoin, enabling investors to gain exposure to bitcoin's price movement through a traditional investment vehicle and avoid the challenges of buying, storing and safekeeping bitcoins.
BTCS (BTCS) is an early mover in the blockchain and digital currency ecosystems and has been recognized as the United States' first 'pure play' public company to focus on blockchain technologies, which are the technologies that underpin bitcoin digital currency.
Bitcoin Services is another company helping to further the common acceptance of bitcoin currency. BTSC offers a bitcoin escrow service, which acts as a neutral third party between buyers and sellers in online transactions, holding the buyer's bitcoins until both parties are satisfied with the transaction. Additionally, BTCS offers bitcoin mining services and blockchain software development.
As bitcoin gains ground as a valid and accepted form of currency, benefitting from high demand for convenient digital payment capabilities, savvy investors will do well to take note and look to enterprises like the named companies, which are at the forefront of this burgeoning digital currency.
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>>> Delaware Governor Signs Blockchain Regulation Bill into Law
Rebecca Campbell
24/07/2017
https://www.cryptocoinsnews.com/delaware-governor-signs-blockchain-regulation-bill-law/
The governor of Delaware has officially signed a bill into law that recognizes the trading of stocks on the blockchain.
In April, the Corporation Law Section of the Delaware State Bar Association (DSBA) had approved Delaware Law Amendments with the intention of delivering statutory authority for businesses in the state to use the blockchain to maintain corporate records.
Passing the House at the end of June with one vote against it out of 41, this step brings to end a campaign that began in May 2016 when the-then governor of Delaware, Jack Markell, announced plans to embrace the blockchain and smart contract technology. It was also hoped that the initiative would provide a legal and regulatory environment for the development of the technology in the state in addition to help attract blockchain companies to Delaware.
Now, after many weeks when the bill passed the House, the governor of Delaware, John C. Carney Jr., has put pen to paper and made the recognition official.
Delaware Embraces the Blockchain
Delaware is one state in the U.S. that has taken embracive steps toward the innovative technology.
Previously, a Delaware judge had been reported to have urged investors to protect their votes through the distributed ledger. Last November, vice chancellor J. Travis Laster, said that the technology could help shareholders remove the middleman when it came to votes and shares.
According to Laster, the current system is outdated and too complex, making it difficult to determine who exactly owns a share and how it’s utilized in decision making.
However, with the recent signing into law, it remains to be seen what impact the blockchain bill will produce within Delaware. Yet, it could pave the way for other states to look into the technology more as it gains prominence in several use cases among various industries.
Arizona is another state that is leading the way with the technology. In March, it was reported that the Senate had passed a bill that would give smart contracts and blockchain signatures legal binding status.
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>>> ICO Mania: $1.2 Billion Raised in 2017, $600 Million in the Last 30 Days
Lester Coleman
21/07/2017
https://www.cryptocoinsnews.com/ico-mania-strikes-promising-to-transform-capital-infrastructures/
More than $1.2 billion in cryptocurrency was raised through ICOs in the first half of 2017, far outstripping venture capital investment in blockchain and Bitcoin firms. About $600 million was raised in last 30 days alone.
A 78-page “Token Mania” document from Autonomous NEXT summarizes ICOs and explores many of the issues that have surrounded them, including similarities to the dotcom bubble, the impact of “bitcoin whales,” regulation and other topics. The analysis provides takeaways for startups, financials incumbents and investors.
Until 2017, all token launches were less than 1% of global crowdfunding activity. In 2017, more than $1.2 billion was raised in more than 50 projects. The report lists all 56 2017 token sales.
While the current ICO market has features of a bubble, there is an underlying innovation with the attributes of a massive platform shift in the digital world, the report notes. While most ICOs fail, some will redefine their industries in a winner-take-all dynamic over a 10-plus year holding period.
Financial incumbents should consider using crypto tokens as an operating strategy, such as tokenizing internal currencies and workflows, or catalyzing developer communities around open APIs.
ICOs Are Unique
ICO offerings are akin to the sale of a future money supply or a platform utility enabler, rather than a sale of securities. But unlike the sale of equities in a private venture investment or in IPO, the object sold in an ICO is a digital token that is both scarce and validated based on advanced cryptography techniques.
ICO offerings are issued by groups that may or may not be formally organized as a legal entity. Hence, regulation has not come to an agreement about these offerings. Some jurisdictions treat them as assets, commodities or currencies.
Some ICOs launch with developed products and roadmaps for utilizing proceeds, while others are raising money without a developed product but aiming to leverage speculation.
Crypto Evades Traditional Venues
The crypto economy is growing outside of traditional venues, the report notes, which has happened before with video game gold farming and virtual economies, but not on such a global scale.
Speculation and volatility across the crypto economy are rampant, and many participants are aware of both fraudulent practices and a growing bubble fueled by bitcoin whales. There are many fraudulent ICOs intended to take advantage of excitement in the ecosystem. They do this by leveraging social media for promotion and a lack of enforceable consumer protection, raising legitimate regulatory concerns and attempts by select market participants to self-regulate.
But beneath the turbulent waters are seeds for a massive transformation of the real world.
While many companies of the first tech bubble in the late 1990s have disappeared, winners like Amazon and Netflix have experienced large capital gains and monopolization of their sectors.
Most cryptocurrencies have not been successful, but bitcoin and Ethereum have experienced large capital gains and growing adoption, signaling an underlying structural shift.
Token Benefits
Investment in tokens allows economic participation at the protocol layer of a next-generation Internet.
Token value is derived from two primary sources: functional and speculative. The functional value is that derived from the use of the token itself. The speculative value is the value a trader of the token derives from trading it on an exchange, relative to others. This can be a positive development for the ecosystem as it draws validating capital, which can be invested in real projects. But if tokens are issued primarily for speculation, it raises regulatory issues.
ICO Challenges
While the type of risk in ICOs is similar to other early stage projects, judging quality is different from venture capital, and best practices are only beginning to be defined.
Offerings are shifting from core technology to use cases like markets, investment products, media and identity.
The report goes into detail about large ICOs such as the DAO, SONM, Storj, Status and Gnosis.
Also read: ICOs gallop ahead despite concerns
Institutional Investors Emerge
Institutional investors are in the early adoption phase of investing in the crypto asset class, but they are becoming as important as high-net-worth early adopters. The impact of these “whales” is to distort prices and market mechanics on new offerings.
Cryptocurrency market volatility likely created very large capital gains for early adopters. Large market participants are able to dominate the new assets coming up through ICOs. There are several possible sources for these whales, ranging from crypto players to traditional capital.
The venture capital community has been most engaged with the space, with the earliest investments in the space targeting bitcoin infrastructure.
There is a current realization that ICOs have a similar risk profile to venture investments, and that participating in them within a new structure is worthwhile. As a result, venture funds have invested into either hedge funds or operating companies like Digital Currency Group that are indexed to the rise of the sector.
Like crowdfunding, public participation in ICOs may compete with venture capital as an asset class.
The “high finance” communities like hedge funds and private equity, meanwhile, are just learning the basics. While some firms like Fortress have seeded strategies targeting crypto, it is not yet a broadly accepted asset class given the lack of institutional structuring.
The Bitcoin Investment Trust provides a stark example of bridging the gap between investors/institutions and an acceptable legal structure.
There are also ICOs like ICONOMI that package cryptocurrency indexes into an investable product.
While retail demand is increasing, it has not been able to access the asset class easily.
The Winklevoss twins have been advocates for creating a Bitcoin ETF, but the SEC has stalled the project for years and not allowed it to market; similar efforts are happening for Ethereum.
Opportunities For Financial Firms
Despite the challenges, there are many opportunities for financial services incumbents to incorporate ICOs as an asset class into a business model.
Closed banking networks must become more open through regulation like PSD2, the report noted. Many private blockchain projects– from Hyperledger, Enterprise Ethereum, Ripple, R3 and others –are already putting in place the technical foundation for tokenizing
The report also summarizes the roles of miners and exchanges in the crypto ecosystem.
Miners in proof-of-work blockchains are gold diggers that annualize to hundreds of millions of in proceeds. The report includes a chart listing annual proceeds as of June 16 to 20, 2017. The highest proceed went to AntPool, which mined 93 blocks, each representing 12.5 BTC valued at around $2,600 per coin, annualizing to $282 million per year.
The report also lists the largest exchanges by BTC volume.
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>>> 7 Cryptocurrency Predictions From the Experts
Fortune
Robert Hackett
Jul 25, 2017
https://fortune.com/2017/07/25/bitcoin-ethereum-cryptocurrency-predictions/
Fortune convened some top cryptocurrency entrepreneurs, venture capitalists, bankers, and others to chat about the future of digital money at Fortune’s Brainstorm Tech conference in Aspen, Colo. last week. A select group met at the Aspen Institute for a breakfast roundtable discussion on Wednesday morning.
Headliners on the panel included Balaji Srinivasan, CEO and cofounder of 21.co, a cryptocurrency startup that has raised more in traditional VC funding than almost other one. Another was Peter Smith, CEO and cofounder of Blockchain, a U.K.-based cryptocurrency wallet company that recently raised $40 million from GV, the venture capital arm of Alphabet, parent company of Google (goog). And Kathleen Breitman, CEO and cofounder of Tezos, a blockchain startup that this year raised more than $200 million in an initial coin offering, or ICO, and which counts celeb investor Tim Draper among its backers.
The crew of experts weighed in on everything from the longevity of Bitcoin, the original cryptocurrency and blockchain, or cryptographically secured public ledger, to the latest trend of hosting so-called token sales to fund projects, especially on Ethereum, a rival blockchain to Bitcoin’s, to the future of a decentralized web. Here are some of the predictions we heard.
1. Bitcoin and Ethereum are here to stay.
Most people who are enthusiastic about cryptocurrency appear to agree that Bitcoin and its newer rival Ethereum have staying power, though they may be more bullish on one versus the other. "In terms of 5 to 10 years, Bitcoin and Ether will be around I bet," Balaji Srinivasan told the room of more than 70 people.
Peter Smith said his company, Blockchain, which was early to Bitcoin, has only just started to warm up to newcomer Ethereum. In contrast, Mike Cagney, CEO and cofounder of SoFi, a personal finance company, said during a separate session on the main stage that he was hotter on the latter technology.
Bitcoin "has some purpose but its application for commercial transaction is limited right now," Cagney said. "The blockchain and Ethereum, on the other hand, have absolutely fascinating infrastructure applications,” he continued, mentioning the possibility to overhaul title insurance, which involves policies related to real estate, as one example.
2. As yet unknown coins will hit the big time.
Bitcoin and Ethereum may have stolen the show at this point, but the innovation won’t end there. Expect more winners on the horizon.
Kathleen Breitman is hopeful that Tezos, her own blockchain bet, will fill a niche that solves problems with extant blockchains. In particular, she and her project’s developers are designing Tezos to automatically push software updates out to the network, thus, in theory, avoiding the divisive feuding over upgrades that has wracked systems like Bitcoin over the past few years.
No one can say how many tokens and coins and blockchain protocols will eventually win out, but the experts seem to think there’s room for a multitude. "It’s likely that another one or two dominant ones we haven’t seen yet in the market," Smith projected. "Another really dominant coin could come out this year or next year.”
3. Sure, people will get burned.
For the time being, token sales might seem like a fantastic way to raise a lot of money quickly and with few questions asked. Will this lead to riches for some? Undoubtedly—indeed, it already has. And rip-offs for others? Almost certainly.
Smith said he presumes that market manipulation and insider dealing is rampant among purveyors of initial coin offerings. “We’re cautious about it in the short term,” Smith said of his company. “But you have to temper that with the idea that every new technology is going to be like that in the beginning.”
Brad Garlinghouse, CEO of Ripple and a former executive at Yahoo, voiced his less forgiving concerns about the sector on a separate panel. “Heavily regulated markets are typically heavily regulated for a reason,” he said. “Frauds are happening, people are going to jail.”
4. ICOs will (eventually) give Silicon Valley and Wall Street a run for their money.
The days of making a pilgrimage to the homes of the holders of purse strings are coming to an end. In a world where anyone can participate as an investor online, physical location matters much less.
“It used to be you had to come to Silicon Valley, walk up Sand Hill Road, network with individuals,” Srinivasan said about entrepreneurs seeking funding, often strolling up a strip to the west of Palo Alto that long has been associated with venture capital firms. ICOs change all that.
Projects are already getting funded this Kickstarter-like new way. Breitman said she that when she set up Tezos’ token sale, she aimed to “get as many people who wanted to participate in the ecosystem to contribute.” The company raised more than $200 million to date and, according to her, more than 30,000 Tezos wallets have been opened.
5. Regulations will stick.
Elena Kvochko, chief information officer of the security division at Barclays, said that her bank has had talks with regulators about Bitcoin, blockchains, and their ilk. The rule-sticklers appear to be open to the idea as long as “know your customer” laws are obeyed, although its still early days.
Meanwhile, as governments settle on sets of rules of the road, countries like Switzerland, Singapore, and Estonia are jostling to develop frameworks that easily accommodate the new technology, Srinivasan said. They’re seeking to displace geographic incumbents and become hubs for a new wave of business financing. “If you’re a U.S. person or business, you have a good deal to be concerned about,” Smith said.
Breitman added that until the rules are agreed upon, it’s “best to be transparent” about what one is doing.
6. Speculation will subside as “killer apps” take hold.
As cryptocurrency prices fluctuate wildly, speculators have been having a field day. However, there’s reason to believe the markets will become more stable, as Bitcoin gradually has over the past couple of years (despite its still big price swings), Smith said.
In order for these computer coins to catch on big-time, they need a use-case that beats traditional money. Ideally, this ought to be better than merely “buying drugs,” as Jeff John Roberts, Fortune reporter and the session’s moderator, noted.
Srinivasan proposed one possible scenario. Imagine that “all your waking hours are spent in the Matrix,” he said, referring to a virtual reality in which everyone is enmeshed in the future. As people from all over the world meet and interact, they will need a medium of exchange. “To transact, you can’t just hand over a dollar bill,” Srinivasan said. “You need an international currency for that.”
“It might take a while but there’s going to be more of a need to transact across borders than there is today,” he said.
7. Cryptocurrencies will pressure incumbents to improve.
Whenever a consumer swipes or dips a credit card, payment processors charge a fee.
Nicko van Someren, chief technology officer of the Linux Foundation, pointed out that the fee companies like Visa or Mastercard charge exceeds the cost to clear or settle transactions. These businesses can potentially process transactions quicker and cheaper, he contended.
One potential outcome of the adoption of alternate systems, like Bitcoin, is to provide companies with the impetus to improve their services. “Bitcoin is good because it will make banks move toward the real cost of handling these transactions,” van Someren said. (By extension, in Ethereum's case, one could imagine upstart companies built on it forcing giants like Amazon, Facebook, or Dropbox to reconsider or improve their respective offerings.)
Smith, meanwhile, was less optimistic about incumbents’ ability to adapt to such change. “I don’t think be lot of room for banks to simply adjust their price models,” he said.
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>>> Greece arrests Russian suspected of running $4 billion bitcoin laundering ring
July 26, 2917
Karolina Tagaris , Jack Stubbs and Anna Irrera
http://www.reuters.com/article/us-greece-russia-arrest-idUSKBN1AB1OP
ATHENS/MOSCOW/NEW YORK (Reuters) - A Russian man suspected of being the anonymous mastermind behind one of the world's oldest crypto-currency exchanges and of laundering at least $4 billion has been arrested in Greece, police and sources said on Wednesday.
Police sources identified him as Alexander Vinnik, 38, who was arrested after a tip-off in a small beachside village in northern Greece on a U.S. warrant. Police said the United States would seek to extradite him.
Two sources close to the BTC-e virtual currency exchange, who declined to be identified while the case was open, said Vinnik was a key person behind the platform, which has been offline since reporting "technical problems" late on Tuesday.
"An internationally sought 'mastermind' of a crime organization has been arrested" Greek police said in a statement. "Since 2011 the 38-year-old has been running a criminal organization which administers one of the most important websites of electronic crime in the world."
Police said "at least" $4 billion in cash had been laundered through a bitcoin platform since 2011 - the year BTC-e was founded - with 7 million bitcoins deposited, and 5.5 million bitcoins in withdrawals.
Bitcoin was the first digital currency to successfully use cryptography to keep transactions secure and pseudonymous, making conventional financial regulation difficult.
Vinnik's arrest is the latest in a series of U.S. operations against Russian cyber criminals in Europe. Last week, the U.S. Justice Department moved to shut down the dark web marketplace AlphaBay.
The U.S. prosecutions coincide with intensified scrutiny of Russian hackers after U.S. intelligence officials determined that Russia interfered in the 2016 U.S. presidential election using cyber warfare methods to help Donald Trump, something Moscow denies.
There was no indication Vinnik's case was connected to the U.S. hacking charges. The U.S. Department of Justice, the Russian Foreign Ministry and BTC-e did not immediately respond to requests for comment.
Founded in 2011, BTC-e is one of the oldest and most obscure virtual currency exchanges, allowing users to trade bitcoin pseudonymously against fiat currencies, such as the U.S. dollar, and other virtual currencies. Until today, the people behind it had remained unknown.
It is known in crypto-currency markets as one with the most relaxed standards for checking the identity of its users to combat money laundering, and for not collaborating with law enforcement.
This helped make BTC-e "a favorite money-laundering location," said James Smith, chief executive of Elliptic, a company that works with law enforcement to track illicit bitcoin transactions. The exchange has been connected to recent ransomware attacks, he said.
BTC-e has been out of service for over 24 hours for what it described as "unplanned maintenance." In a tweet on Wednesday after the arrest, BTC-e said it would restore service in the next 5-10 days.
While bitcoins can be bought and spent anonymously using digital wallets with unique addresses, transactions are recorded on a public ledger called blockchain, making it possible to follow the coins.
Over the years, law enforcement agencies around the world have been able to identify users behind pseudonymous wallets connected to illegal activities by tracking bitcoin movements, often with the help of exchanges and security firms like Elliptic.
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Name | Symbol | % Assets |
---|---|---|
GMO internet Inc | 9449 | 5.13% |
Square Inc A | SQ | 4.61% |
Z Holdings Corp | 4689 | 4.18% |
Galaxy Digital Holdings Ltd | GLXY | 3.92% |
Intercontinental Exchange Inc | ICE | 3.44% |
Digital Garage Inc | 4819 | 3.39% |
Kakao Corp | 035720.KS | 3.38% |
DocuSign Inc | DOCU | 3.34% |
LINE Corp ADR | LN | 3.26% |
SBI Holdings Inc | 8473 | 3.23% |
Name | Symbol | % Assets |
---|---|---|
Overstock.com Inc | OSTK | 5.47% |
Square Inc A | SQ | 3.07% |
SBI Holdings Inc | 8473 | 2.20% |
DocuSign Inc | DOCU | 2.15% |
GMO internet Inc | 9449 | 2.14% |
PayPal Holdings Inc | PYPL | 1.91% |
SAP SE ADR | SAP.DE | 1.88% |
JD.com Inc ADR | JD | 1.86% |
NVIDIA Corp | NVDA | 1.84% |
OneConnect Financial Technology Co Ltd ADR | OCFT | 1.81% |
Name | Symbol | % Assets |
---|---|---|
Xilinx Inc | XLNX | 1.77% |
Alibaba Group Holding Ltd ADR | BABA | 1.68% |
Infosys Ltd ADR | INFY.BO | 1.67% |
Tata Consultancy Services Ltd | TCS.BO | 1.67% |
Micron Technology Inc | MU | 1.65% |
Baidu Inc ADR | BIDU | 1.64% |
JD.com Inc ADR | JD | 1.61% |
Cognizant Technology Solutions Corp A | CTSH | 1.60% |
Taiwan Semiconductor Manufacturing Co Ltd ADR | TSM.TW | 1.57% |
Texas Instruments Inc | TXN | 1.55% |
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