Day: December 10, 2017

When arriving in the United States – and most other countries – customs officials often ask that travelers fill out a form to declare various items. Most of this is to try and catch various contraband items, unapproved foods, and exotic (dangerous to native ecosystems) animals from entering the country. However, these forms also ask about carrying certain amounts of money. This begs the question: if you have a mobile client or a hardware wallet, do you need to claim it? What if you simply memorized your private keys? Wouldn’t this just be treated like a debit card? 

Do I need to declare?

Many travelers have already had to fill these forms out. In the United States, Customs asks if travelers are carrying more than US$10,000 or its equivalent on them in cash. This is largely to prevent money-laundering and other nefarious activity.

But those who have more than ten grand in their bank accounts need not claim their debit cards on these customs forms. Wouldn’t the same apply to having over US$10,000 in cryptocurrency on a mobile wallet, hardware wallet, or in an account for which the individual has memorized his or her seed phrase or private keys?

Probably not, I would argue. Bank accounts are exempt because these can be controlled and frozen. Essentially, having money in a bank means the account holder has given up control of that money; they’ve given over custodianship of these funds to a third party. While the third party should be beholden to its customer, there is always the possibility that it won’t keep the customer in mind. The money stays in the bank, and the account holder requests that they be granted access to their money when using their debit card or withdrawing cash.

Cash, or money over which an individual has full control is really what’s being targeted here. Crypto acts similarly to cash (but is far more secure) in that whoever holds the ability to spend it is the one who owns it. So it is likely that in the future we will see customs require individuals to claim their cryptocurrency holdings, including those that are stored in mobile or hardware wallets, as well as those for which individuals memorize the associated private keys.

I know what many of you are thinking, because was thinking it too: “What if I just don’t tell them?” It would be hard for them to follow up, and most customs agents have no idea what cryptocurrency is. Wouldn’t it be too much of a hassle to explain that knowing a phrase or an app on a phone can have access to funds which may be worth  more than $10K? Perhaps, but it’s about to get way worse if one were to withhold that information.

S.1241, also known as the Combating Money Laundering, Terrorist Financing, and Counterfeiting Act of 2017, might – among other things – make withholding information about one’s cryptocurrency holdings a felony. Private keys are also under attack in this bill, which shows how scary truly private money is to public institutions.

However, it doesn’t need to be scary to them. They should see crypto as something that can enhance the lives of their citizenry. I’ll be reaching out to my representative and senator to express this opinion, and to express my displeasure with the aforementioned bill.

Satoshi Nakamoto is the person or persons who are responsible for the creation of Bitcoin by releasing its whitepaper in 2008. This person, or collective, also was responsible for the majority of the mining at the beginning of Bitcoin’s existence. As a result, their private keys hold about 980,000 Bitcoins, which have been left untouched since Satoshi exited the community. What is the future of this fortune?

Scenario 1: Quantum Computing Makes Satoshi’s Fortune Vulnerable

There are a few projects dedicated to cracking private keys from public keys in the Bitcoin space. One of them is the Large Bitcoin Collider, which has been the subject of some controversy in the past. Despite the drama that has surrounded it, the Collider has successfully cracked a few private keys. However, the computing power required to do so is unfeasible for any large-scale attack on specific wallets, at least currently. Quantum computing will be a different matter altogether, though.

Quantum computing will one day threaten the Bitcoin network. For active members of the community, it won’t be a problem at all, since new SHAs that are quantum resistant will be developed and deployed. However, inactive users who don’t update their wallets – including Satoshi and his 980,000 Bitcoins – this could be a real problem. Private keys could be cracked, and the associated coins could then be transferred to attackers’ wallets. Satoshi’s fortune may be stolen.

Scenario 2: Satoshi Comes Back

At current Bitcoin prices, Satoshi Nakamoto is worth about US$14 billion, comfortably putting them among the top 250 richest individuals in the world. While Satoshi may not have been terribly interested in returning in the past, as Bitcoin’s price continues to grow, this may become more and more tempting, especially if the possibility I outlined above comes true. If Satoshi is wealthy enough that they don’t worry about those 980,000 Bitcoins, they must be pretty well off already. Having said that, US$14+ billion is enough that I think anyone would be tempted to try and protect it from thieves.

If Satoshi comes back, we will be in for an interesting time. This figure has become somewhat religious in nature, and many people will assign them (clearly unwanted) responsibility for the fate of the network. “What would Satoshi do?” seems to underpin many arguments in any debate that arises in the Bitcoin community. For this reason, I truly hope that Satoshi never comes back. Proof-of-personality is unattractive and, frankly, dangerous for crypto-communities. It’s all meant to be distributed.

While I doubt Satoshi will come back, even to claim their fortune, it is still possible.

Scenario 3: Satoshi Never Comes Back, Quantum Computing Doesn’t Threaten Their Keys

It is theoretically possible that quantum computing i) won’t happen, or ii) won’t happen the way that we think it will. Scenario 1 is not possible, and scenario 2 is unnecessary. Honestly, this is what I hope will happen. I don’t want Satoshi to come back, but I also do not want their coins to be stolen. Of course, I realize this means I am okay with the fact that almost 1 million of the 21 million Bitcoins that exist will be locked up and lost forever. This has its own set of issues, but that’s for another article.

With many existing projects set to undergo public launches and final product releases throughout 2018, next year seems poised to be perhaps the biggest one yet for cryptocurrencies as a whole. On top of this, new projects with lofty ambitions join the industry every day. Here are five exciting projects whose ICOs are taking place early next year.

Scorum (SCR)

Scorum is an all-inclusive media platform for sports fans around the world. The platform aspires to be a one-stop destination for sports updates, social media, and sports wagering. The social media aspect of the platform mirrors that of Steemit, where users vote on posts they enjoy and content creators are paid in accordance with how popular their posts are. Scorum will act as a wager host, where users will bet against one another directly in a zero-fee environment. The update center offers live broadcasts and implements next-generation statistical algorithms, providing users with more in-depth analysis than its competitors provide.

A whopping 93% of SCR’s total supply will be available through the ICO, with a hard cap of US$17 million. Of the money raised, one half will be used to fund further developments and the other half to reward current users and market to new ones. The sale begins January 14.

Winding Tree (LIF)

Winding Tree is an ETH-based solution to problems that exist in the travel industry. Currently, consumers are plagued by exorbitant fees, currency conversion losses, and a lack of exposure to smaller businesses. Small businesses and independent operations are priced out and overshadowed by major travel players, from booking agencies to airlines, hotels, and everything else along the way. Winding Tree seeks to decentralize this industry on the Ethereum blockchain, allowing consumers to bypass fees and come into closer contact with niche travel options worldwide.

Winding Tree is currently in the pre-sale phase, which is capped at US$1.5 million. The public sale will take place beginning February 1. There is a soft cap of US$10 million, and excess funds will be placed in a smart contract that will allow token holders to sell back their tokens at ICO rates. If under US$5 million is raised, investors will be reimbursed and the tokens will not be created. 75% of the total supply is to be distributed through the ICO.

Fort Knoxster (FKX)

Fort Knoxster refers to itself as “Telegram on Steroids”. It seeks to become the go-to communications platform for the cryptocurrency community. Fort Knoxster offers a host of features – from Skype-esque calling and screen sharing, to decentralized cloud storage. Beyond this, the platform offers Telegram-style group chats, and conference voice and text communications. Everything is managed through a central dashboard and secured via end-to-end encryption, preventing unwanted entities from breaching one’s communications. Fort Knoxster leverages Ethereum smart contracts to support all these features.

59.5% of FKX’s total supply will be available through its token sale, which will take place on February 19. There will be bonuses for “early birds” who register in advance. This ICO is capped at US$15 million.

Chimaera (CHI)

Of these four projects, Chimaera is perhaps the most promising. Chimaera employs a custom blockchain meant to unify gaming entities, connecting players and developers on its decentralized platform. With Chimaera, game developers will be able to publish and maintain their games directly on the blockchain, as well as connect gamers worldwide. This system will allow for real and immutable value for game items and economies, decentralized wagering and matchmaking, and collecting coins through gameplay. This system was initially built through the team’s prototype project, HunterCoin. With HunterCoin having been a success, Chimaera has the potential to take on gaming universally.

There is not currently a set date for this public sale, but it will likely take place near the end of January. A private pre-sale is currently ongoing for larger investors. When this ICO was announced, a cap of just over 20,000 BTC was planned. However, that amount is being reduced with Bitcoin having tripled in value since the announcement.

Traditional banking brings borders, regulations and limitations, but the P2P lending platform completely changes the concept of this financial sector. But how does P2P lending achieve the goal of borderless loans? Karma has the answer with decentralized lending without geographic borders.

The core of the Karma ecosystem are the people who live in the different areas of the world, making cross-border operations essential to this platform. Karma gives the ability for the P2P exchange of assets between citizens and legal entities from various countries. There is a strong need for this as there are countries with cheap money (negative deposits, negative mortgage rates) and countries with expensive money (high-interest rates on loans). There are obvious shortcomings when applying cross-border exchange rates and services.

Users who have used the international payments option have met with many challenges. Banks need references and documents when transferring even small amounts of money. Karma has found a solution to this issue by automating and simplifying the process.

P2P platforms aren’t new on the scene when it comes to lending. For instance, Kiva, founded in 2005, is a non-profit organization which enables people to lend money to low-income entrepreneurs and students. This project has been successful by reaching to over 80 countries and the system has been operating within the legal arena for many years.

There are different options when transferring cross-borders. When transferring in fiat currency, transfers take place through an escrow account in a bank connected to the Karma application using their application program interface (API). The application automatically recognizes which payment is connected which c contract and what kind of payment it is: an investment or a loan repayment.

The other version of cross-border transfers are fiat – crypto asset – fiat. Right now the transactional costs in process are a lot higher than with fiat transfers. This operation, too, will be connected to the ecosystem of Karma.

Another important point of Karma’s cross-border function is the decentralization of competencies to various countries of presence. Banks, investment funds, P2P-platforms usually operate inside the same region because they don’t have capabilities in other areas. Karma platform offers a model which enables to create a community of experts who would be accessible in any country.

Insuring against the currency risk is the other feature of cross-border lending. It’s suggested to give out loans in the currency in which the borrower earns, though, the rate of this currency can rise or fall in relation to the exchange rate favored by the investor.

In the early stages of Karma, a separate fund for insuring risks for investors will be created. The fund will accumulate funds to cover risks against currencies and reinsure them from large players or hedge in open markets. The cost of currency insurance will be per market and individual for each currency pair. The investor has the option whether or not to choose to pay for currency insurance, and investors can choose the most favorable conditions from all of the options.

Get good Karma by participating in the token sale https://tokensale.karma.red/ and get a 15% discount today.

This is a sponsored press release and does not necessarily reflect the opinions or views held by any employees of The Merkle. This is not investment, trading, or gambling advice. Always conduct your own independent research.

The Lightning Network will be a game changer for Bitcoin. That is, assuming this concept comes to market in the near future. A lot of progress has been made behind the scenes as of late. A successful mainnet test, a new explorer, and more developers working on this technology are all positive developments. The wait for proper scaling and microtransactions as part of Bitcoin is almost over, by the look of things.

Bitcoin users have been excited about the Lightning Network for some time now. The technology promises lower fees, instant transfers, and microtransactions. All of this is assuming the developers will deliver on this technology’s promise. We will find out if that is the case soon enough, by the look of things. Some major developments involving this technology will bring LN to market soon. No specific dates have been communicated at this point in time, though.

Lightning Network Development Progresses Nicely

With the first successful mainnet test, an important step has been taken. It is the first time such a major Lightning Network test is in the green across the board. This initial success shouldn’t be ignored, although it isn’t of great value for Bitcoiners either. It simply means the implementations are effectively capable of handling mainnet transactions. They will still need to be pushed to the limit, though. Without an official release date, it may still take weeks or months until we can benefit from this technology.

Additionally, the Acinq team launched a new Lightning Network explorer. Although this is only a minor tool, it shows things are evolving nicely behind the scenes. Users can visualize all payment channels on the network in real-time. This explorer works not just for Acinq’s own implementation, mind you. Various teams of developers are working on LN technology. Nodes can even advertise their own color and alias, which is rather nifty.

Last but not least, the Lightning Network still needs additional developers. There is a growing demand for coding expertise in this regard. Additionally, more testing participants are welcomed with open arms as well. No one can deny the LN technology is still in its infancy right now. Without proper testing, there is no point in bringing this technology to the masses. We can only hope more developers and testers dedicate their time to this project.

Header image courtesy of Shutterstock

The post Lightning Network Inches Closer to Being Deployed on the Bitcoin Mainnet appeared first on NEWSBTC.

Jim Cramer, the outspoken host of ‘Mad Money,’ has called Bitcoin ‘Monopoly Money,’ and has suggested that the futures market will ‘annihilate’ the cryptocurrency’s value when they open.

Merchants and service providers all over the world are flocking to cryptocurrency. Despite major network issues and high transaction fees, Bitcoin is still a quite popular payment method. In fact, major gold brokers are now introducing Bitcoin payments on their online platforms. APMEX is the latest to do so, and it’s chosen BitPay as its payment processor.

APMEX Finally Integrates Bitcoin

If there is one assumption people have made far too often, it is how Bitcoin and gold are somewhat related. We often talk about the value of Bitcoin in terms of how many ounces of gold one can buy with it. This equation has quickly evolved in favor of Bitcoin throughout 2017, and it seems gold will not be making a comeback anytime soon. However, that doesn’t mean that people who deal in physical gold and related items aren’t keeping an eye on Bitcoin. After all, any business needs to innovate if it wants to survive.

This also means companies will need to switch up their payment options in the coming months. Consumers have different demands compared to a few years ago, and catering to these new preferences won’t necessarily be easy. Although Bitcoin is a very niche market – especially when it comes to spending BTC – it is still an option worth looking into. Especially now that the value of Bitcoin is rising, it is only normal that we will see more and more people pay attention to the world’s leading cryptocurrency.

In the case of APMEX, the decision to accept Bitcoin payments is a big step forward. It is not the first precious metals dealer to embrace Bitcoin, nor will it be the last. It makes a lot of sense for a company looking to become an industry leader in online gold sales to add support for Bitcoin. In doing so, it acknowledges that Bitcoin has become more popular and widely accepted as a payment option. The latter point is somewhat controversial, though, as we have also seen a fair few merchants ditch Bitcoin support.

The choice to process Bitcoin payments through BitPay is also an interesting one. This company has not shied away from stating how it will integrate support for additional cryptocurrencies in the future. Although no one knows for sure which currencies those will be, there are a lot of exciting opportunities waiting to be explored. Bitcoin Cash, for example, is a very likely candidate at this stage.

As one would expect, APMEX is providing an incentive to pay in Bitcoin. More specifically, it’s offering a 4% discount on all APMEX orders paid in Bitcoin, although this will only be available for a limited time. Whether or not that will be enough of an incentive to spend one’s BTC remains to be seen. The current backlog combined with high transaction fees make this currency pretty much useless for payments. No one likes to pay US$20 or more to spend Bitcoin, as doing so shouldn’t be necessary.

It will be interesting to see how things play out in this regard. On the one hand, it’s good to see Bitcoin get wider recognition as a payment option. However, this news shouldn’t distract from the problems which are plaguing the network right now. There are a lot of issues associated with Bitcoin in its current form, and they will take a lot of time and effort to get solved. It remains to be seen how long APMEX will offer Bitcoin as a payment option, as it may not be a big success in the long run.

Following hints that an increase in cryptocurrency regulation is coming to the British Isles, the government there have enlisted a curious team to help them understand the space better. The Telegraph report that the UK’s Treasury department have called upon their domestic spy agency to better appreciate the risks posed by the permission-less digital currency.

The deputy director for cyber skills and growth at the National Cyber Security Centre, a department of the Government Communications Headquarters explained to the British newspaper:

We are interested in anything that could affect the country, so Bitcoin is a major thing now.

The agency is said to be calling on mathematicians, academics, and those already familiar with the cryptocurrency sector to help government workers further understand the space.

The UK government recently announced that they were considering a regulatory move against Bitcoin. At present, exchanges fly under the legislative radar. However, based on EU money laundering laws, it’s likely that a “know your customer” approach will have to be followed by vendors in the future. This would mean that customers would need to provide full identification to use any exchange.

Whilst the Telegraph article and Chris Ensor from the NCSC have dressed the research probe up as an attempt to protect citizens from the “risks” of Bitcoin, it’s much more likely that the moves are aimed at protecting the national coffers. In the wake of Brexit, the government are trying whatever trick they can get away with to generate extra more revenue. This has even gone as far as to include taxation on the bonus free bets bookmakers give to loyal customers.

Rather than stop the problem of tax avoidance, the move against crypto will likely drive those wishing to engage in illicit activities like money laundering towards privacy coins such as Monero, Verge, Z-Cash, or Dash.

As the price of Bitcoin has risen so much during 2017, the sums of money potential being moved or hoarded without the government’s knowledge is becoming an ever-increasing concern to law makers across the globe. Earlier this month, the Guardian reported on the UK’s moves to legislate cryptocurrency. Interestingly, however, the Treasury are distancing themselves from the money laundering angle at present but they do contend that the problem is likely to get worse. They told the newspaper:

There is little current evidence of them [cryptos] being used to launder money, though this risk is expected to grow.

With some commentators predicting over six-figure Bitcoin valuations in the coming years, cash strapped politicians would just love to try and lay claim to some obscene percentage of the gains made on the silly digital money you bought five years ago when they were all too happy to dismiss it all as nonsense. It’s likely we’ll see greater measures to identify those holding Bitcoin as we move into 2018.

Image: PixaBay

The post UK Government to Enlist the Help of Spies to Crack Bitcoin’s Enigma appeared first on NEWSBTC.

The economy is up, but according to Deutsche Bank Chief International Economist Torsten Slok, the major risks for the global economy in 2018 include a crash of Bitcoin.