Day: October 5, 2017

As the number of members of the general population that are familiar and acquainted with the blockchain increases, so do the number of financial and banking institutions that are starting to use it. One of the driving forces behind it is the financial consortium R3 CEV, which was first launched in 2015. Yesterday, R3 released … Continue reading R3 Corda Blockchain Receives a Significant Update

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Bitcoin is showing signs its price is on the up, but analysis suggests there are more hurdles on the charts before it can push to new highs.

In an interview with Bloomberg’s Emily Chang at the Vanity Fair New Establishment Summit in Los Angeles, billionaire investor and Dallas Mavericks owner Mark Cuban reaffirmed his investment in bitcoin.

For many months, Cuban had hinted at plans to invest in bitcoin and other cryptocurrencies. On October 3, Cuban confirmed that he had purchased bitcoin through the Swedish bitcoin exchange-traded fund (ETN) XBT Provider, which is traded on Nasdaq Nordic.

XBT Provider is the same bitcoin ETN provider which JPMorgan clients used to invest in bitcoin. In September, it was revealed by bitcoin developer Andrew DeSantis and prominent bitcoin trader IamNomad that custodian accounts of JPMorgan Securities Ltd had processed various transactions to the accounts of XBT Provider, processing investments into the Swedish bitcoin ETN.

There is No Such Thing as Intrinsic Value

During the interview, Cuban emphasized that the baseless condemnation of bitcoin from key figures in the financial sector including JPMorgan Chase CEO Jamie Dimon is inaccurate because the concept of intrinsic value in assets and stocks is fundamentally flawed. Value is subjective and the price of assets and stocks depends on supply and demand. The value of fiat currencies can be manipulated and altered, and hence do not have intrinsic value.

Cuban explained:

“It is interesting because there are a lot of assets which their value is just based on supply and demand. Most stocks, there is no intrinsic value because you have no true ownership rights and no voting rights. You just have the ability to buy and sell those stocks. Bitcoin is the same thing. Its value is based on supply and demand. I have bought some through an ETN based on a Swedish exchange.”

At a banking conference hosted by Barclays which Dimon attended, highly regarded venture capitalist and Golden State Warriors owner Chamath Palihapitiya offered a similar criticism toward Dimon as Cuban, noting that the value of bitcoin depends on the market and that the government has limited power in restricting and regulating bitcoin.

“[Bitcoin is] absolutely not [a fraud]. It cannot be a fraud. What countries can constrain today is how it [bitcoin] is effectively traded but it cannot be controlled. It is a fundamentally distributed system that exists peer to peer. And so to the extent that you can basically eliminate the will and the actions of every single person in the world, you can eliminate it. But in the absence of that, the genie is fundamentally out of the bottle,” said Palihapitiya.

As bitcoin continues to evolve as a technology, digital currency, and a store of value, high profile, institutional, and retail investors will adopt bitcoin and demonstrate increasing interest toward the cryptocurrency market. General consumers and users of existing banking systems are beginning to recognize the benefits of bitcoin as a decentralized financial network and peer-to-peer protocol that eliminates the necessity of intermediaries and mediators.

Image License: Marc Levin, For Commercial Use

One of the world’s largest airlines is looking at how it can apply blockchain tech to track workflows within its aircraft maintenance systems.

A Greek court has ruled in favor of extraditing the alleged former operator of BTC-e, Alexander Vinnik, to the United States. Vinnik was arrested by authorities late July 2017, and stands accused of masterminding a $4 billion money-laundering ring through the cryptocurrency exchange BTC-e.

Also Read: BTC-E Rebrands to Wex Exchange — Claims to Be AML/KYC Compliant

Alexander Vinnik Will Face up to 55 Years in Prison If Extradited to the United States

The Russian is accused of providing money laundering services and facilitating a wide range of crimes extending back from 2011, including drug trafficking and computer hacking. Vinnik denies having been the former operator of BTC-e, instead claiming that he only worked as a “technical consultant” for the cryptocurrency exchange. Vinnik is also accused of having profited from the Mt. Gox hack, with U.S. authorities claiming that Vinnik “obtained” funds that had been stolen from Mt. Gox, before laundering them via BTC-e and Tradehill.

Russia has also submitted an extradition request for Vinnik, who there would be subject to more lenient charges of fraud. Although Alexander Vinnik also denies accusations of fraud, he has consented to Russia’s extradition request. A date has yet to be set for the formal hearing of Russia’s extradition request. Vinnik is one of seven Russian nationals that have been arrested or indicted for U.S. cybercrime charges this year.

Vinnik and his lawyers have appealed to the Greek Supreme Court, arguing that “insufficient indications, let alone evidence” had been presented against Vinnik by the Thessaloniki court that ruled in favor of extraditing the Russian. The lawyer leading Vinnik’s defense, Alexandros Lykourezos, told media, “we hope and expect a better outcome.” If the appeal is unsuccessful, Greece’s justice minister will have the final say regarding Vinnik’s future, as the Greek justice minister has the power to approve or block competing extradition requests for individuals tried in Greece. “We have faith in the Greek justice system and a long road ahead of us,” Xanthippi Moisidou, another lawyer defending Vinnik told reporters.

Vinnik Was Arrested in a Coastal Village Located in Northern Greece During Late July

Following Vinnik’s arrest, BTC-e went offline, hosting a static front page claiming that the website was under maintenance. The U.S. Department of Justice described BTC-e as “one of the largest entities in the field of electronic money laundering.”

The arrest and subsequent seizure of BTC-e’s assets has brought into question how far the international jurisdiction of the United States extends with regards to cybercrime. These actions comprised the first instance of U.S. government agencies attacking a completely foreign exchange on foreign soil. BTC-e reported that “on July 25… the FBI staff came to the data center… and seized all equipment, the servers contained databases and purses of our service,” in addition to fining the company $110,003,314 USD. Amidst the chaos, numerous presumably innocent traders’ funds were seized – including an Australian who lost $430,000 USD worth of bitcoin as a consequence of the U.S. government’s seizures.

BTC-e has since rebranded to Wex.nz, and claims to operate in full compliance with Anti-Money Laundering and Know Your Customer laws and requirements.

Do you think that Alexander Vinnik will be extradited to the United States for trial? Share your thoughts in the comments section below!

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A newly funded startup called Blokur aims to use the ethereum blockchain to better manage rights within the music industry.

Things continue to go downhill for Bitcoin Cash as we speak. Although this altcoin has had a pretty solid run during the first few weeks of its launch, things are certainly evolving in a different direction right now.With the Bitcoin Cash price dropping another 7.54% over the past 24 hours, things are not looking all that great. Then again, comebacks are not uncommon in the cryptocurrency world either.

Bitcoin Cash Price Keeps Going Down

No one can deny the past week has anything but pleasant for Bitcoin Cash holders. While this altcoin still tried to make a name for itself, the Bitcoin Cash price is getting battered as we speak. Just a week ago, the BCH value was still above the $450 mark, but today, it has dropped below $360 a few times already. At the time of writing, one BCH is valued at $363.43, which shows there may be some sort of a comeback in the next few hours. Then again, no one should get their hopes up just yet, though.

With the most recent 7.54% decline in value, the Bitcoin Cash price is slowly going down a very slippery slope. Especially the past 48 hours have proven to be rather volatile, although it remains unclear why that is exactly. It is not as if BCH has more or fewer use cases all of a sudden, as the currency’s usefulness has always been rather limited at best. Then again, the value of a particular cryptocurrency isn’t always linked to how useful it is, that much is certain.

What is rather problematic for BCH is how the Bitcoin Cash price is dropping in both USD and BTC value. Losing ground compared to Bitcoin is not all that uncommon in the world of altcoins, as very few currencies effectively keep their value when Bitcoin shows even the smallest sign of a move upward. Right now, nothing major is happening with the Bitcoin price, although it seems the bleeding has been stopped for the time being. Seeing BCH fall to 0.0856 BTC is a surprising turn of events, though, to say the least.

Moreover, the BCH trading volume has dropped quite a bit as well. Although Bitcoin Cash could never rival Bitcoin in terms of trading volume, the drop to $322.278m is not a good sign either. While it is true this volume is still higher compared to most other altcoins in existence today, it doesn’t really matter if people are mainly interested in selling right now.  So far, it seems the selling pressure vastly outweighs any interest from buyers, although this situation may turn around in the future.

Speaking of the BCH trading volume, Bithumb is the leading market right now, with over 33% of all trades. HitBTC and Bitfinex complete the top three. All of these exchanges generate between two and six times the volume of any other exchange in the world. It does appear the Korean platforms value BCH slightly higher right now, but the difference is just a few dollars. None of this indicates there may be any form of positive momentum moving forward, yet things can always turn around.

Whether or not the Bitcoin Cash price can mount a significant comeback in the next few hours or days remains to be determined. For now, there is no indication that will be the case, but we are only looking at a snapshot of the trading action taking place. It could very well turn out to be a great moment to pick up some BCH as a way to make a small profit in the very near future. After all, it only takes a small price swing to generate close to 10% worth of profit, which may occur at any given time.

As crypto visionary Andreas Antonopoulos said of the development of technology trends, “in technology it is often not the best technology that “wins”, but the one that achieves broad enough adoption and recognition early enough. Good enough beats best if deployed broadly.” This highlights the importance of a frictionless and practical landscape for increased blockchain adoption, where the ability to easily communicate transactions with all other actors is more important than flashy solutions that have fewer participants.

So it can be assumed that the platform which gets traction as a “good enough” solution in each of the many industries which can benefit from blockchain will gain a big first-mover advantage. Of all of these industries, the business-to-business technology market is possibly the most lucrative, since it is worth around $330 billion dollars and is also the setting for some of the most enthusiastic uptake of private blockchain projects.

The platform that offers an acceptable solution for the many blockchain-to-blockchain transactions that banks, corporations, and governments will be undertaking in the near future can expect a huge ROI on their development efforts. One such platform is Aion, developed by the team at Nuco. As the CEO of Nuco Matthew Spoke said: “The hundreds of blockchains existing today will soon become thousands, then millions. Future adoption of this technology relies on a network of blockchains, both enterprise and public, and we’re on our way to achieving this mission.” The Nuco team hope that the upcoming Aion blockchain solution will meet the considerable demands for a frictionless and open blockchain-to-blockchain network.

This is the holy grail of enterprise blockchain development. But it is not without its challenges. As of yet, the landscape for large organisations to integrate their business processes with others through blockchain is limited.

Burdens on blockchains

The cryptosphere has seen persistent issues in its early days regarding scale and security which are now being addressed by a range of developers and teams. The Raiden and Lightning networks and the Bitcoin Fork all aimed to tackle the problem of data overload leading to congested transactions. But private users sending small amounts of cryptocurrency across the network will pale in comparison to the vast quantities of data that a smart-contract powered business landscape will require. As Spoke said, there is a need for  “middleware for blockchains to communicate with each other, and the ability to pass messages between them.” Being able to do this in a prompt and scalable manner is something missing at the moment.

Another thing lacking from the current environment is the ability to set up transactions quickly with other blockchains. This is the concept of interoperability: that e.g. a bank’s blockchain would be able to quickly validate a transaction on a company’s blockchain which has formed the basis of a smart-contract with a 3rd party. In an interconnected world like this, everyone needs to be confident that their transactions can be communicated with all others involved. “Blockchain technology will soon become integral to every industry’s infrastructure, and a framework for interoperability is critical to scaled adoption,” according to Spoke.

And there is also the consideration of privacy in blockchain transactions. Enterprises have much higher requirements than ordinary users in this regard. Spoke said that “core to our hypothesis at Nuco is that many enterprise blockchains will be built, and that they will fundamentally transform the way most industries function.” These enterprises are in need of a solution that safeguards their privacy if needed.

How to bring blockchains together

Nuco’s Aion network aims to address these obstacles with certain features. The blockchain will allow quick creation of new blockchains while retaining control for the creator. Transactions on these chains can be linked easily to other blockchains that also participate in the Aion ecosystem. And companies can also use the Aion ecosystem to scale up their blockchain resource needs.

This could all lead to a much more efficient landscape for companies. Spoke described a possible use case: “A simple example that people often point to is in financial services, being able to create a close-payment network, for example, between a group of domestic banks. In Canada take the five biggest Canadian banks and, say, they wanted to create a faster payment or settlement system, they might decide to do that on the distributed network rather than creating an intermediary organization for that.”

Pitching to corporations

The founders of Nuco were also the creators of Deloitte’s blockchain practice, Rubix. This should help them get their message across to the large companies that could be enticed to use the platform. According to Spoke “… you can imagine that we face typical challenges like scale and credibility. On the one hand, we’re working very hard on cementing a network of enterprise partnerships to help us achieve market reach and scale. So far, we’ve been very successful at this by leveraging our phenomenal relationship with Deloitte to get access to international opportunities that they open the doors for.”

There will be activity on the network soon. The Aion token will allow participants and developers to create and transact with blockchains in the Aion ecosystem, as well as develop applications for other Aion users. The token for the Aion blockchain is being sold from October 3rd.

Changing the face of the corporate world

Considering the huge amount of data (and money) that flows through enterprise IT systems, developing a shared protocol is a lucrative prize. This will be the next step in the development of blockchain technology. As Spoke said himself, “blockchains don’t talk to each other at all right now; they are like the PCs of the 1980s. In the future, blockchains will federate data and value in a hub and spoke model similar to the internet.” It will be interesting to see who creates the internet of blockchains.

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The world of blockchain and cryptocurrencies may appear to be flourishing on the outside, but there’s a lot of shady stuff going on behind the scenes. Last month, the Securities and Exchange Commission or SEC in the U.S. managed to foil plans of a certain Maksim Zaslavskiy, who planned to defraud investors through two apparent … Continue reading SEC Gets Tough on ICOs, Files Charges Against Two Projects

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Bank of Canada and R3 have concluded that their Project Jasper initiative could provide a basis for building cash-based settlements systems in future.