$15,000: Is There a Limit to Bitcoin’s Meteoric Rally?

$15,000:
Is There a Limit to Bitcoin's
Meteoric Rally?

Bitcoin's stellar run continues with prices leaping

one major psychological hurdle after another. At 11:00 UTC today, the world's largest cryptocurrency by market value reached a new lifetime high of $15,058, according to CoinDesk's Bitcoin Price Index (BPI). In the last 24 hours, bitcoin (BTC) has appreciated by more than $2,000. As per CoinMarketCap, gains are close to 19 percent over the same period. Prices have since dropped back slightly and stand at $14,562 at press time

The primary theory about the astonishing rally being put forward by investors on social media is that bitcoin is pricing in the entry of big institutional money via the introduction of the first BTC futures products. Both CBOE Global Markets and CME Group are set to launch the new futures contracts on Dec. 10 and Dec. 17, respectively. With the notable shift in the industry, bitcoin may remain well bid at least until Sunday's listing of BTC futures on the CBOE. That said, the technical chart studies show BTC could face immediate resistance at around $16,194.

The charts show:

  • The 127.2 percent Fibonacci extension of the rally from the November low stands at $16,194 levels. The next big resistance is lined up at $18,261 (161.8 percent Fibonacci extension) and $18,399.50 (261.8 percent Fibonacci extension of the rally from the September low).
  • On the downside, support is seen at $12,476.51 (161.8 percent Fibonacci extension of the rally from the September low).
  • 5- and 10-day moving averages (MAs) are sloping upwards, suggesting any corrective pullback is likely to be short-lived.
  • The RSI and stochastic indicate overbought conditions.

Bitcoin could easily extend the rally to $16,194 levels in the next few hours. But, while the investor community is mostly happy to see the cryptocurrency heading for the moon, as indicated by comments on social media, there is growing discomfort with the pace of the ascent. Still, today, the recipe for a notable technical correction is absent. History shows that bitcoin usually suffers big sell-offs following confirmation of a bearish RSI divergence. Yet, the charts show no such development so far. In the past, bitcoin has suffered pullbacks when the RSI and stochastic turned lower from the overbought territory (see circles on chart). Currently, both indicators show overbought conditions, yet are still rising.

Look at these Stats.

  • Bitcoin could extend gains to $16,194 and possibly even further.
  • A pullback to $11,000 cannot be ruled out, but dips below the upward sloping 10-day MA of $11,500 are likely to be short-lived.
  • As of now, a significant correction is unlikely and could be seen only on confirmation of a bearish price-RSI divergence and/or if RSI and stochastic move lower from the overbought territory.

Chuck Reynolds


Marketing Dept
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Coinbase: The Heart of the Bitcoin Frenzy

Coinbase:
The Heart of the Bitcoin Frenzy

SAN FRANCISCO —
The booming stock market of the 1920s had the New York Stock Exchange.

The tech bubble of the 1990s had Nasdaq and E-Trade. And the virtual currency market of the last year has had Coinbase. Coinbase employees lining up for free food in the gaming room of the company's office in San Francisco.CreditJason Henry for The New York Times Coinbase has been at the center of the speculative frenzy driving up the value of Bitcoin — which topped $13,000 on Wednesday — and similar currencies. While there are many Bitcoin exchanges around the world, Coinbase has been the dominant place that ordinary Americans go to buy and sell virtual currency. No company had made it simpler to sign up, link a bank account or debit card, and begin buying Bitcoin.

The number of people with Coinbase accounts has gone from 5.5 million in January to 13.3 million at the end of November, according to data from the Altana Digital Currency Fund. In late November, Coinbase was sometimes getting 100,000 new customers a day — leaving the company with more customers than Charles Schwab and E-Trade. The company faces challenges that are a reminder of the early days of now-mainstream online brokerages, which suffered through untimely outages and harsh criticism from traditional finance companies and government regulators. And Coinbase’s missteps make it clear that the virtual currency industry is still young, with little of the battle testing that other financial markets have faced.

An employee working in a nook inside Coinbase’s offices.CreditJason Henry for The New York Times  Coinbase’s offices in downtown San Francisco show a start-up straining to keep up with growth. The company offers all the usual perks: free lunch and dinner, a sizable cafeteria and a room with yoga mats and board games. Recently, every last inch of space has been pressed into action. The day after Bitcoin hit $10,000 last week, a training session for Coinbase managers was moved to the game room because the engineering team needed to set up an emergency war room in the regular conference room.

The engineering team was trying to get Coinbase back up after the company’s site was knocked offline, overwhelmed by a wave of incoming traffic. The number of visitors was double what it had been during the previous peak — two days earlier — and eight times what it had been in June, the peak until recently. All of the big Bitcoin exchanges went down for at least part of the day, and Coinbase got back online faster than most. Still, any sort of downtime like that would be unacceptable in more traditional exchanges where stocks and commodities are traded. “There are some well-known places this year when we weren’t able to keep up with the volume,” said Jeremy Henrickson, the chief product officer at Coinbase. “We are not where we need to be yet.”

Coinbase employees tossed around a "talk box" during a question-and-answer session with company executives.CreditJason Henry for The New York Times Most Friday afternoons, Brian Armstrong, the chief executive of Coinbase, holds a session in the cafeteria where employees can ask him anything. On the Friday of the record-hitting week, Mr. Armstrong discussed how the company was planning to grow and introduced Asiff Hirji, the new president and chief operating officer who will help him oversee it all.

The addition of Mr. Hirji, who had the same role at TD Ameritrade, was an implicit recognition that this new industry needs more seasoned hands to help young executives like Mr. Armstrong, who is 34. Mr. Hirji will manage Coinbase’s trading operations while Mr. Armstrong focuses on new projects. rian Armstrong, the chief executive of Coinbase, speaking with employees.CreditJason Henry for The New York Times Mr. Armstrong has been running Coinbase since he co-founded it in 2012. Soft-spoken and reserved, he is an unusual figure in an industry filled with loud ideologues. He has done few public appearances during Bitcoin’s recent bull market, and he recognizes the current frenzy has come with downsides.

“It’s probably a little bit too focused on the price or people trying to make money,” Mr. Armstrong said last week. “The thing I’m passionate about with digital currency is the world having an open financial system.” There is some irony to the success that Mr. Armstrong has experienced as a result of Bitcoin’s rising price. In 2015, he helped lead a push to get the Bitcoin network to expand so it could handle more transactions. That effort failed, and Mr. Armstrong said in a recent interview that Bitcoin “did break my heart a little bit.” He said he now holds more of his wealth in a Bitcoin competitor, Ether, which Coinbase also offers to customers.

A monitor in the Coinbase office displaying the value of several virtual currencies.CreditJason Henry for The New York Times. Most of the screens in the Coinbase offices show the performance of the company’s servers and customer metrics — like the number of customers downloading its iPhone app. For a time last week, Coinbase was among the 10 most downloaded iPhone apps, ahead of Uber and Twitter. There are a few screens, including one in the cafeteria, that show the price of Bitcoin, Litecoin and Ether, the three virtual currencies that Coinbase buys, sells and holds for customers. Litecoin was created by a former Coinbase employee and is often described as silver to Bitcoin’s gold. The newer Ether, which lives on the Ethereum network, is the second most valuable virtual currency after Bitcoin.

Licenses issued to Coinbase.CreditJason Henry for The New York Times Coinbase set itself apart from other early Bitcoin companies when it was one of the first to get a new, special license for virtual currency companies in New York, called the BitLicense. In the last year, though, Coinbase’s most notable interaction with the government came after the Internal Revenue Service asked the company to hand over all of its customer records. Bitcoin holders are supposed to pay taxes if they collect gains from selling coins, but the I.R.S. has said that only a few hundred people have done so each year. Coinbase fought the broad request from the I.R.S. and last week, while the price was skyrocketing, announced an agreement to hand over only the records of customers who made transactions involving more than $20,000 of virtual currencies — around 3 percent of the company’s customers.

Adam White, the general manager of a Coinbase exchange for large investors.CreditJason Henry for The New York Times In addition to the brokerage service for small investors, Coinbase also runs an exchange, called GDAX, tailored to larger investors. GDAX is overseen by Adam White, a former Air Force officer and a graduate of Harvard Business School. The day Bitcoin hit $10,000, he was in New York speaking with big financial institutions that are looking into Bitcoin. Some companies are getting ready to begin trading Bitcoin futures contracts in December, when that activity becomes available on the Chicago Mercantile Exchange.

A year ago, his Wall Street outreach was difficult, but “it’s all inbound now,” Mr. White said.Workers preparing new office space for Coinbase, part of the company's significant expansion plans.CreditJason Henry for The New York Times Not surprisingly, Coinbase is on a building spree. It recently leased office space in New York that will handle the Wall Street business and a new service that holds virtual currencies for large customers. In San Francisco, the company is adding two new floors in the building where it now has one.

New Coinbase employees learning the ins and outs of virtual currencies during a lunchtime meeting.CreditJason Henry for The New York Times Still, the main concern among virtual currency investors is that Coinbase has not expanded fast enough. In May, the company was criticized by a customer who could not reach anyone at the company after his account was hacked.

Coinbase is trying to be more responsive. At the beginning of the year, the company had 24 employees providing customer support. It now has around 180, with most of them outsourced from a call center in Texas and an email response team in the Philippines. The cafeteria is often turned into a “Crypto Club” where new employees are taught the ins and outs of virtual currency. Daniel Romero, the general manager of Coinbase, said he wanted to have 400 customer support employees by the first quarter of next year to provide phone support around the clock. But in the meantime, there is a 10-day backlog of service requests. “When your customer support issues are that publicly bad, and you have your site go down when people want to be trading,” it’s a very humbling experience, Mr. Romero said.

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
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Australia’s CommBank Plans to Issue a Bond on the Blockchain

Australia's CommBank Plans to Issue a Bond on the Blockchain

The Commonwealth Bank of Australia has revealed a plan

to issue a bond over a blockchain system, possibly as soon as next year. Though few details were revealed, Sophie Gilder, CommBank's head of blockchain, said that the bond would be transferred and paid for over a blockchain-based system in collaboration with an unnamed major world issuer, according to ZDNet report.

In comments made during the GMIC Sydney conference Tuesday, Gilder said that bank has been exploring blockchain use cases for more than four years and has completed 25 proofs-of-concept and trials aimed to address real-world business issues. CommBank, she continued, is eyeing the technology for equities, bonds, syndicated loans and other applications where it considers there are high levels of "friction."

Gilder stated:

"We think the platform we have built can make this more efficient."

Earlier this year, as reported by CoinDesk, CommBank announced that it is developing a blockchain-based system for the sale of government bonds. The concept was tested by the Queensland Treasury Corporation, which acts as the Australian state’s central financing authority. Other institutions are also moving to adopt blockchain technology for bond issuance.

This October, Russia's National Securities Depository said it had issued its first-ever live bond using blockchain. The financial instrument, a $10-million bond for shares in Russian telecom giant MegaFon, used smart contracts and the open-source Hyperledger Fabric blockchain. And, in late 2016, French bank BNP also announced that it was exploring the technology for use in distributing instruments known as "mini-bonds."

Chuck Reynolds


Marketing Dept
Contributor
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How Blockchain Is Restoring Value And Transparency In Online Search

How Blockchain Is Restoring Value And Transparency In Online Search

In today’s digital age, the timely retrieval of information

is critical to human functioning. This reality means millions, even billions, of users coalescing around internet search. Information dependency has created an impossibly rich online concentration of potential prospects. Businesses cannot ignore search engine marketing and digital advertising. They have to be where people are.

Now, the primary objective of a search engine is simple: deliver trustworthy, authoritative and timely information in response to a query. As searchers query, click and learn, they naturally interact with businesses. These interactions can be enriching to both sides. Consumers want answers to questions, while businesses want to provide solutions to problems they are positioned to solve. When working, it’s a virtuous cycle of meaningful digital engagement at scale. Unfortunately, because of the outsized influence had by search engine platforms and their advertising network intermediaries, the experience is rarely this idyllic.

The Sad State Of Search

"Assume you know little about wine but you are nevertheless interested to purchase some good quality wine online. … But how can you search about something you do not really know much about? … Unfortunately, as any search will show, what you end up getting are results based mostly on popularity and semantic context. The little-known wine producer in Italy with the right wine for you has no hope of ever reaching you with his digital content if you just type 'red wine' in the online search field. … What you are most likely to get from any agnostic query are results from those who had a big budget to spend on digital marketing. In other words, the global digital media landscape today is a very uneven field that favors the rich and powerful." Consumers lose in a search environment unduly influenced by spend. They contribute valuable, actionable data with every click but don’t reap any reward from this contribution. Nor are they sure about the efficacy of the results they browse.

For businesses — even those with big budgets — the situation is perhaps bleaker.

For every dollar of digital advertising spent last year, $0.40 went to Google and $0.37 went to Facebook. Literally, every other participant on the world’s most ubiquitous online social channels (think: Snapchat, Twitter, Amazon) battle for leftovers. The utter non-competitiveness does little to promote transparency and innovation or return control to advertisers and consumers. Jeremy Epstein, CEO of the blockchain marketing company Never Stop Marketing, recalls the conversation he had with Stacy Huggins, CMO of MadHive. According to her, for every $1 you invest in digital advertising, you only get $.44 of value.

For years, these advertisers’ efforts to secure authentic, valuable connections with consumers have been stymied. Opaque data, convoluted campaign terms and fuzzy metrics are inhibitors. Nineteenth-century retailer John Wanamaker’s iconic line, “Half the money I spend on advertising is wasted; the trouble is I don't know which half” represents a fundamental question about digital ads altogether. It represents the growing unease about dubious tactics and tepid returns offered by leading search engines.

Emerging Technology And The Evolution Of Search

At BitClave, we’re solving the problem from both the consumer and business side. We believe mutually incentivizing and establishing a direct connection between businesses and customers is the paradigm shift the search and advertising vertical needs. Principally, customers find what they are looking for and businesses provide the right offer to the right question from the right consumer. Within the ecosystem, these interactions are managed in a decentralized way, leveraging the security and immutability of blockchain. As user information is generated, businesses enjoy precise levels of user targeting, maximizing ROI on advertising spend, regaining campaign control and answering search queries. Customer and retail activity information gets stored on the decentralized ledger. This satisfies users’ desire for relevant search results while driving a safer, more efficient transactional experience.

In the U.S., digital ad spend is expected to be $83 billion in 2017. Of this, roughly $37 billion will be from search. As Google and Facebook’s stranglehold tightens, sub-optimal experiences for users and advertisers will continue. These middlemen have moved from simply owning the platforms for search and commerce to meddling in the actual engagements. They are dictating results and using this influence, in the form of ad placements and click-through rate performance, for exorbitant gain.

The too-big-to-fail search and advertising middle should be accountable. Their currency is data and dollars — the very things that consumers and advertisers provide. Irritation is growing among consumers and advertisers alike. AdBlockers app downloads are surging. The vagaries of digital ad ROI have spurred blockchain-based companies bent on disrupting the vertical — and conditions are changing.

Alongside BitClave, martech industry observers note some early leaders:

• AdChain
is an open protocol that uses blockchain technology to improve the digital ad supply chain and prevent ad fraud.

• NYIAX
 is the world’s first exchange to trade advertising contracts. Developed in partnership with Nasdaq, NYIAX enables publishers and advertisers to buy, sell and re-trade high-quality advertising inventory with its financial matching engine.

• AdShares
offers programmatic advertising in a decentralized, peer-to-peer marketplace. The platform brings together publishers and advertisers by cutting out the middleman.

A View Of The Future

Our conviction is that mechanisms to deliver value to buyers and sellers, not middlemen, need to be at the center of search.For years, these advertisers’ efforts to secure authentic, valuable connections with consumers have been stymied. Opaque data, convoluted campaign terms and fuzzy metrics are inhibitors. Nineteenth-century retailer John Wanamaker’s iconic line, “Half the money I spend on advertising is wasted; the trouble is I don't know which half” represents a fundamental question about digital ads altogether. It represents the growing unease about dubious tactics and tepid returns offered by leading search engines.

Emerging Technology And The Evolution Of Search

At BitClave, we’re solving the problem from both the consumer and business side. We believe mutually incentivizing and establishing a direct connection between businesses and customers is the paradigm shift the search and advertising vertical needs.

Principally, customers find what they are looking for and businesses provide the right offer to the right question from the right consumer. Within the ecosystem, these interactions are managed in a decentralized way, leveraging the security and immutability of blockchain. As user information is generated, businesses enjoy precise levels of user targeting, maximizing ROI on advertising spend, regaining campaign control and answering search queries. Customer and retail activity information gets stored on the decentralized ledger. This satisfies users’ desire for relevant search results while driving a safer, more efficient transactional experience.

In the U.S., digital ad spend is expected to be $83 billion in 2017. Of this, roughly $37 billion will be from search. As Google and Facebook’s stranglehold tightens, sub-optimal experiences for users and advertisers will continue. These middlemen have moved from simply owning the platforms for search and commerce to meddling in the actual engagements. They are dictating results and using this influence, in the form of ad placements and click-through rate performance, for exorbitant gain.

The too-big-to-fail search and advertising middle should be accountable. Their currency is data and dollars — the very things that consumers and advertisers provide. Irritation is growing among consumers and advertisers alike. AdBlockers app downloads are surging. The vagaries of digital ad ROI have spurred blockchain-based companies bent on disrupting the vertical — and conditions are changing.

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-461

Feds shut down allegedly fraudulent cryptocurrency offering

Feds shut down allegedly fraudulent cryptocurrency offering

Cryptocurrency offerings are no longer a regulation-free zone.

 A diagram on the PlexCoin website illustrates the cryptocurrency's revolutionary architecture.

The Securities and Exchange Commission on Monday announced that it was taking action against an initial coin offering (ICO) that the SEC alleges is fraudulent. The announcement represents the first enforcement action by the SEC's recently created cyber fraud unit.

In recent months, the SEC has been wrestling with what to do about ICOs. US securities laws impose a number of requirements on anyone who offers new investments to the public. ICOs—in which a company offers the public cryptocurrencies that could appreciate in value the way Bitcoin has—look a lot like securities offerings. But most ICOs have ignored the SEC's requirements. At the same time, the SEC is aware that new cryptocurrencies could become an important source of innovation. And some experts argue that many new cryptocurrencies—those that serve a useful function beyond their potential to grow in value over time—are not securities, legally speaking.

So the SEC has proceeded cautiously. In July, the agency fired a warning shot. It announced that a 2016 fundraising campaign had run afoul of securities law, but that the SEC would decline to prosecute those responsible. The hope was to get the cryptocurrency world to take securities laws more seriously without doing anything drastic.

Now the SEC is taking the next step by prosecuting what it considers to be one of the most egregious scams in the ICO world. The SEC's complaint, filed in federal court in New York, is against Dominic Lacroix, whom the SEC describes as a "recidivist securities law violator." The SEC considers Lacroix's cryptocurrency project, PlexCoin, to be a "fast-moving Initial Coin Offering (ICO) fraud that raised up to $15 million from thousands of investors since August by falsely promising a 13-fold profit in less than a month."

The PlexCoin website has a hilariously vague description of this supposedly revolutionary cryptocurrency. "The PlexCoin's new revolutionary operating structure is safer and much easier to use than any other current cryptocurrency," the site proclaims. "One of the many features of PlexBank will be to secure your cryptocurrency from market variation, which is highly volatile, and invest your money in a place where you can get interesting guaranteed returns." The company claims that it's working on a PlexCard to allow people to spend their PlexCoin balances. h your PlexCard will guarantee you a perfect interbank exchange rate without fees," the site claims.

The SEC isn't impressed and is arguing that PlexCoin has "all of the characteristics of a full-fledged cyber scam." The agency is seeking to freeze the assets of the PlexCoin project in hopes of getting investors' funds back to them. Most ICOs are not outright scams, as the SEC alleges in this case. Still, the action will give many other ICO sponsors pause. Securities law goes well beyond combatting scams. Offering securities to the public without following SEC rules can get people in a heap of trouble. The SEC started with PlexCoin, but its enforcement of securities laws probably won't end there.

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-461

Revolut merges mobile banking with cryptocurrency trading

Revolut merges mobile banking with cryptocurrency trading

Revolut is merging traditional banking and cryptocurrency

to let you buy, sell, trade, and hold Bitcoin, Litecoin, and Ether alongside 25 world fiat currencies. The $90 million-funded mobile banking startup is trying to erase the divide between old and new money. Revolut‘s CEO Nikolay Storonsky announced on stage today at TechCrunch’s Disrupt Berlin conference that cryptocurrency trading will open to all Revolut users on Thursday. If you’re spending money through Revolut’s debit card and run out of fiat currency, it will automatically convert the necessary amount of cryptocurrency to fiat to fund your transaction.

“Despite being one of the hottest trends in the world right now, getting exposure to cryptocurrency has notoriously been time-consuming and expensive,” Storonsky writes. The move comes as cryptocurrency becomes increasingly legitimate in the eyes of the world, following bitcoin blowing past $10,000 per coin, and traditional futures exchanges preparing to allow bitcoin futures trading this month. While cryptocurrency could be seen as a niche distraction from Revolut’s core business, but Storonsky feels that crypto is going mainstream and will quickly become a critical part of all banking. He cited that during Revolut’s week-long crypto beta test, 10,000 customers traded $1 million in cryptocurrency.

When the feature opens up to all users Thursday, Revolut promises to offer the most competitive rates on crypto transactions, charging only a flat, up-front 1.5 percent without other hidden fees that can add up to 5 percent to 9 percent on other platforms. Customers will be able to buy through all of Revolut’s base currencies so there’s no need for extra foreign exchange fees if you want to buy in Swiss Francs, for example.

In just two years, Revolut has signed up over 1,000,000 users in Europe and processed 42 million transactions, and claims to have saved customers $160 million in foreign exchange fees. It’s growing fast, doubling the rate of new customer sign-ups versus three months ago. While there are plenty of players in the modernized debit card market like N26 and Monzo, Revolut also lets you send up to €5,000 per month in 16 currencies without any fee. As these startups jockey for position, they’re all searching for differentiators. Embracing cryptocurrency could lure fintech early adopters to Revolut.

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-461

How the Winklevoss twins became the world’s first bitcoin billionaires

How the Winklevoss twins became the world’s first bitcoin billionaires

The entrepreneurs sued Facebook founder Mark Zuckerberg years ago, and they invested their (supposedly) meagre payouts wisely


Tyler and CameronWinkelvoss have won big on bitcoin.

Vaguely. So they’re actors, are they? No. They’re venture capitalists and entrepreneurs. In 2008, they rowed for the US at the Beijing Olympics, finishing sixth. In the film, Armie Hammer played both of them as a kind of two-man master race. As one of them put it in a memorable line of dialogue, “I’m 6ft 5, 220 pounds and there’s two of me.” Nice. But why make a film about them? Because they were at Harvard with Mark Zuckerberg, who they later sued, claiming he stole their idea for a website that they called Harvard Connection, but which he called the Facebook. (Dramatic music.)

And did he? Steal the idea, I mean? Oh, God, that’s just too complicated to get into. The Winklevii launched numerous lawsuits about it, and got about $65m (£48m) worth of Facebook stock, which wasn’t much at the time. Oh, yeah. Sure. These guys probably spend $65m on lunch. In fact, they spent $11m of it on bitcoin, so they’ve probably cheered up a bit.Bitcoin. There’s a word I don’t understand. It’s a crypto-currency. There’s another one. Think of it as an electronic token, which can be owned and traded. Like normal money, it has value because other people consider it valuable. The number of bitcoins in circulation is strictly controlled by a clever bit of software that nobody can hack, called the blockchain.

Thank you. And the Winklevoss twins like having lots of bitcoins, do they? I’m sure they do at the moment. In March 2013, they bought about 100,000 of them, when each coin was worth roughly $120. After a strong year, and a wild couple of weeks, each bitcoin is now worth … let’s see … $11,826. Holy moly! That’s right. Not counting the value of their other investments, the Winklevoss twins have just become the world’s first bitcoin billionaires. Apart from Satoshi Nakamoto, bitcoin’s mysterious inventor, of course. Please don’t explain who he is. Well, there are lots of intriguing theories … Do say: “They’re not billionaires – they’re half a billionaire each!” Don’t say: “Just $73bn to go and they’ll catch up with Zuckerberg.”

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-461

Bitcoin: UK and EU plan crackdown amid crime and tax evasion fears

Bitcoin:
UK and EU plan crackdown amid crime
and tax evasion fears

Cryptocurrency close to record high despite news Treasury plans to end traders’ anonymity

Bitcoin
The EU is taking action to regulate trading in bitcoin.

The UK and other EU governments are planning a crackdown on bitcoin amid growing concerns that the digital currency is being used for money laundering and tax evasion. The Treasury plans to regulate bitcoin and other cryptocurrencies to bring them in line with anti-money laundering and counter-terrorism financial legislation. Traders will be forced to disclose their identities, ending the anonymity that has made the currency attractive for drug dealing and other illegal activities.

Under the EU-wide plan, online platforms where bitcoins are traded will be required to carry out due diligence on customers and report suspicious transactions. The UK government is negotiating amendments to the anti-money-laundering directive to ensure firms’ activities are overseen by national authorities. The Treasury said: “We are working to address concerns about the use of cryptocurrencies by negotiating to bring virtual currency exchange platforms and some wallet providers within anti-money laundering and counter-terrorist financing regulation.”

Guardian Today:

The rules are expected to come into effect in the next few months. The Treasury said digital currencies could be used to enable and facilitate cybercrime. It added: “There is little current evidence of them being used to launder money, though this risk is expected to grow.” The bosses of Goldman Sachs and JP Morgan have criticised bitcoin as a vehicle to commit fraud and other crimes. But Sir Jon Cunliffe, a deputy governor of the Bank of England, last week said the digital currency was too small to pose a systemic threat to the global economy. He also cautioned that bitcoin investors needed “to do their homework”.

Bitcoin was trading at $11,566 on Monday. It hit a fresh record high of $11,800 on Sunday but fell to $10,554 on news of the regulatory crackdown. The Labour MP John Mann, a member of the House of Commons Treasury select committee, suggested MPs would look into the regulation of virtual currencies. He told the Daily Telegraph: “These new forms of exchange are expanding rapidly and we’ve got to make sure we don’t get left behind – that’s particularly important in terms of money laundering, terrorism or pure theft. “It would be timely to have a proper look at what this means. It may be that we want speed up our use of these kinds of thing in this country, but that makes it all the more important that we don’t have a regulatory lag.”

The UK government is currently negotiating amendments

Stephen Barclay, the economic secretary to the Treasury, set out the government’s plans in a written parliamentary answer in October. “The UK government is currently negotiating amendments to the anti-money-laundering directive that will bring virtual currency exchange platforms and custodian wallet providers into anti-money laundering and counter-terrorist financing regulation, which will result in these firms’ activities being overseen by national competent authorities for these areas. “The government supports the intention behind these amendments. We expect these negotiations to conclude at EU level in late 2017 or early 2018.”

Since you’re here …

… we have a small favour to ask. More people are reading the Guardian than ever but advertising revenues across the media are falling fast. And unlike many news organisations, we haven’t put up a paywall – we want to keep our journalism as open as we can. So you can see why we need to ask for your help. The Guardian’s independent, investigative journalism takes a lot of time, money and hard work to produce. But we do it because we believe our perspective matters – because it might well be your perspective, too. High-quality journalism is essential intellectual nourishment. The generosity of providing such a service without a paywall deserves recognition and support. 

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-461

 

World Computer? New Protocol Could Supercharge Ethereum Blockchain

World Computer?
New Protocol Could Supercharge Ethereum Blockchain

With scaling the center of attention in the public blockchain sector,

an older but lesser known attempt to overcome the restrictions inherent in ethereum is getting a refresh. Revealed in an exclusive interview with CoinDesk, a new TrueBit protocol is being released this December, one that removes the ethereum "gas limit," which today puts an upper-bound on the number of computations the network can achieve, bringing the second largest blockchain by market capitalization closer to its oft-touted goal of becoming a "world computer."

While TrueBit is one of many in-progress scaling solutions being engineered for the ethereum platform – working alongside mechanisms such as sharding, state channels and Raiden – it distinguishes itself by focusing on the computational power of the network at large, instead of just transaction speed. Geared specifically towards heavy computations, such as those video broadcasting and machine learning would require, TrueBit could resolve the fact that ethereum is still about as fast as a "smartphone from 1999," as ethereum creator Vitalik Buterin joked last year.

"In short, the new scheme would be a vast simplification of the current TrueBit protocol," said Zack Lawrence, the co-founder of 1protocol, who developed the technology. And these gains all came about after speculation that someone could exploit the protocol, after an amendment to its white paper was released last month. Jason Teutsch, a mathematician and co-founder of TrueBit, framed the speculation, and the process for patching the vulnerability,

with a silver lining:

"When so many people have eyes on the papers, over time, you get more and more confident that it's correct, but it's always an ongoing process for these things that are living systems… Now, we go another layer down the protocol rabbit hole, it's this iterative process of getting deeper and deeper into this."

Hit the jackpot?

And going deeper led the devs to the incentive mechanism used in the protocol. TrueBit aims to remove the gas limit on ethereum by moving computations off-chain – outsourcing them to an external marketplace that rewards participants for solving and verifying the computations. Within the marketplace "task givers" pay "verifiers" to solve computations in exchange for rewards, while "validators" check that the computations are correct.

To make sure everyone runs effectively, Truebit relies on an incentive scheme dubbed the "forced errors jackpot," which ensures validators are actively checking for correctness by requiring verifiers to occasionally submit incorrect information. If a validator finds these forced errors, they're rewarded with a substantial payout: the "jackpot." But according to Lawrence, that process can be a lot less complicated.

Within the new protocol, instead of limiting the participants' tasks, everyone can participate openly. Those that verify correct computations still get paid, but if another participant finds an error, they can submit what they believe the computation should be and enter that into the verification game. All the potential answers are then pooled together until a consensus is reached.

Because that verification pool is costly to participants, the protocol incentivizes them to work together honestly so disputes do not occur, since the reaching consensus within that verification pool would be costly for everyone. Not only does this iteration eliminate the security flaws pointed out when the amendment was released, but it's also easier to implement and could increase the number of computations participants are willing to perform since it eliminates the once-every-so-often jackpot, Lawrence told CoinDesk.

Security challenge

Still, the new protocol may not be the last step in evolving TrueBit to achieve optimum efficiency. Teutsch explained that both versions of the protocol will still hit against eventual limits when it comes to massive computations. If, for example, verification takes too long or gets too expensive, those who notice errors might be inclined to keep quiet, and just let them go. "Remember that the verification game is really slow compared to native computation, so my concern expressed here is more than just theoretical," he said.

Plus, because TrueBit is a protocol built on game theory (rather than relying on more familiar security auditing processes), Teutsch said, its "security is an observational science," in which devs try to put themselves in every position an attacker might be in. Because of this, Teutsch said the developers may decide to run both the original protocol (now internally nicknamed TrueBit Classic) and the new protocol in parallel for better security.

But nodding to the fact that digital security is an immensely challenging prospect that takes continual work,

 Teutsch told CoinDesk:

"Full confidence happens once you have all the money in the world behind it, and it's sat there for a few years."

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-461

For security agencies, blockchain goes from suspect to potential solution

For security agencies, blockchain goes from suspect to potential solution

  • Australia blockchain grant for intel sharing
  • Investigators so far seen blockchain, bitcoin as criminal havens
  • US, UK eye blockchain's military, security, intel potential

Police and security agencies have so far only taken

an interest in blockchain – the distributed ledger technology behind cryptocurrencies like bitcoin – for tracking criminals hiding illegal money from banks. But that's changing as some civilian, police and military agencies see blockchain as a potential solution to problems they have wrestled with for years: how to secure data, but also be able to share it in a way that lets the owner keep control.

Australia, for example, has recently hired HoustonKemp, a Singapore-based consultancy, to build a blockchain-based system to record intelligence created by investigators and others, and improve the way important information is shared. "They've been trying for years to come up with a centralised platform, but people are reluctant to share information," said Adrian Kemp, who runs the consultancy, which was awarded a A$1 million ($757,500) grant by AUSTRAC, Australia's financial intelligence agency, and the Australian Criminal Intelligence Commission.

Blockchain's appeal for data sharing is threefold.

Its ledger, or database, is not controlled by any single party and is spread across multiple computers, making it hard to break. Once entered, any information cannot be altered or tampered with. And, by using so-called smart contracts, the owner of information can easily tweak who has access to what. It's a sign of how far blockchain technology has come within a decade since the publication of a pseudonymous paper describing bitcoin and the blockchain ledger that would record transactions in it. Bitcoin has since become the preferred currency not only of libertarians and speculators, but also of criminal hackers. The bitcoin price is volatile, and hit record peaks late last month.

Governments are already exploring ways to store some data, such as land records, contracts and assets, in blockchains, and the financial industry, too, has experimented with blockchain technologies to streamline transactions and back-office systems, though with limited success.

Securing shared data

The closest most law enforcement agencies have come to the blockchain has been working with start-up firms to analyse it for evidence of criminal deals. But in the past year or so that attitude has begun to change. The United States Air Force (USAF) has funded research into how blockchain could ensure its data isn't changed. In May, the Defence Advanced Research Projects Agency (DARPA) awarded a grant to the company behind an encrypted chat program to make a secure messaging service based on the blockchain.

Amendments to a recent U.S. Senate defense bill require the government to report back on "the potential offensive and defensive cyber applications of blockchain technology and other distributed database technologies" and how foreign governments, extremists and criminals might be using them. Britain, too, is exploring several uses of the blockchain, say consultants and companies working for several departments.

Cambridge Consultants, a U.K.-based consultancy, said it had worked with the Defence Science and Technology Laboratory, a U.K. Ministry of Defence (MoD) agency, on using a blockchain to improve the trustworthiness of a network of sensors on, for example, security cameras. The UK's justice ministry is looking at proving that evidence – video, emails, documents – hasn't been tampered with by registering it all on a blockchain, according to a blog post on its website.

Marcus Ralphs, a former soldier and now CEO of ByzGen Ltd, which makes blockchains for the security sector, said he was working on projects with the MoD using blockchain to track the status and level of individuals' security clearance. Other work included helping the Foreign and Commonwealth Office (FCO) improve the way work permits are issued and records stored.

'Passing the buck'

These are early days. Kemp says there's no guarantee his project will be deployed more widely. And some who have worked with AUSTRAC are skeptical, saying such projects have more to do with agencies turning to the private sector because they're running low on resources and ideas. "The government is just looking to pass the buck on to private industry," said Simon Smith, a cyber private investigator who has worked on cases involving AUSTRAC. Many police forces and armies aren't ready for the technological and mental leap necessary.

The Police Foundation, a UK think-tank focusing on policing and crime, is pushing British police to explore the blockchain, but its director, Rick Muir, said "we are still at the stage of 'what is blockchain?'." Neil Barnas, a USAF major who last year wrote a thesis on the potential of blockchain in defense, said U.S. military and security agencies were slowly waking up. The problem, he says, is that military minds are more inclined towards centralized systems than the decentralised ones that blockchain's distributed ledger embraces. That said, blockchain's association with the criminal underworld has not dented its appeal to those who see its potential, said ByzGen's Ralphs. "The negative narrative around it has not at all watered down or diluted interest of the people we've been engaging with," he said.

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-461