After China, South Korea now bans ICOs

Another country has refused to fall for initial coin offerings’ (ICOs) “new language, same game” schemes.

South Korea’s Financial Services Commission (FSC) announced on Friday that it will ban all kinds of ICOs, noting that “stern penalties” will be issued on financial institutions and groups involved in fundraising via digital token sales. The decision came after senior officials from relevant ministries, led by the financial regulator, met to discuss the matter.

Currently, there is a trend among startups around the world to raise investment by selling new cryptocurrencies based on the Distributed server processing system ethereum network. This practice is likened to an initial public offering, but the difference is that ICO backers get virtual tokens, which may grow in value if the business flourishes.

ICOs have become a popular activity around the world, with over $2 billion raised in 148 token sales this year alone, according to Coinschedule data. But because of this, ICOs have also caught the attention of financial regulators worldwide due to the risk of financial scams. In China, and recently Macau, the central bank has already banned fundraising activities that use digital token sales and ordered companies that have already raised money via ICOs to refund their investors.

Now, South Korea said it will step up its crackdown efforts against illicit transactions of digital currencies. The FSC said it also plans to examine the operations of cryptocurrency companies to “review and amend unfair terms and conditions, including arbitrary withdrawal restrictions.

“There is a situation where money has been flooded into an unproductive and speculative direction,” said Kim Yong-beom, vice chairman of the FSC, according to Yonhap News.

Another financial regulator that weighed in on ICOs was the Australian Securities and Investments Commission (ASIC), whose new guidelines specified that ICOs will be subjected to different regulatory requirements depending on their structure, with some to be regulated under the Corporations Act, and others will be regulated under existing consumer laws.

It isn’t just the regulators who aren’t buying into the ICO craze. Venture capitalists and experts like Ray Dillinger, who did the code review and security audit for the blockchain portion of the Bitcoin source code, said many of these token sales are scams that “don’t have real business plans.”

Hyperinflation may push Venezuela to ‘Bitcoinize’ completely

The stride towards a cashless society is inevitable, and we have Venezuela to prove it.

The South American country is reportedly on the verge of foregoing its bolivar currency in favor of a new one—Bitcoin—as it comes to grips with hyperinflation, according to an expert.

Daniel Osorio, of Andean Capital Advisors, told CNBC that “we are beginning to see in Venezuela potentially the first Bitcoinization of a sovereign state.” And the country’s slide towards cryptocurrencies is born not from technological or intellectual interests, but simply out of necessity.

Osorio, who spends a week per month in Venezuela, said a simple lunch could cost well over 100,000 bolivars, or about $4-$5, which means that Venezuelans would need a backpack full of cash to pay for food. This is why locals have started accepting money wires of foreign currencies and Bitcoin as payments.

“You wire the money to the owner of the restaurant. He gives you his coordinates to wire the money,” Osorio said in the interview. “It’s becoming a cashless society, and I think that brings in something really interesting and provocative.”

Venezuela is in the middle of the worst inflation period in history, with current levels circling 2,000 percent. This is even beyond the International Monetary Fund’s (IMF) predication of 1,640 percent. The situation is already affecting all aspects of daily living in the country, and the reports of food and medical supplies shortages, weak oil prices and rampant theft has forced the government to declare a state of economic emergency.

A massive “bitcoinization” movement has yet to happen in Venezuela, but there is no doubt that the ever growing hyperinflation-related issues are creating an important opportunity for Bitcoin adoption in the country. After all, there is no other currency that is independent of the black market for bolivars—and therefore a fixed exchange platform—than Bitcoin.

Bitcoin Unlimited members approve Gigablock Testnet for larger block sizes

It’s all systems go for nChain and Bitcoin Unlimited’s (BU) Gigablock Testnet Initiative that seeks to determine how large blocks Bitcoin can handle.

BU members voted over the weekend in favor of the initiative, otherwise known as BUIP065, whose goal is to identify the bottlenecks that may obstruct the network’s scalability.

The project is intended to run for five years, with blockchain technology research and development outfit nChain and BU committing to fund a budget of up to $1.5 million. Professor Victoria Lemieux from the University of British Columbia in Canada will provide additional research support in line with the university’s Blockchain UBC project.

The Gigablock Testnet has four specific objectives, which include setting up and maintaining a global test network capable of supporting up to 1GB blocks and sustained Visa-level transaction throughput (3,000 TPS) on the Bitcoin network.

To do this, new mining nodes will be set up in Beijing, Bangalore, Sao Paulo, Sydney and Vancouver, in addition to the existing network of mining nodes in Toronto, Frankfurt, Munich and Washington State.

“This larger Gigablock Testnet can be ‘stress tested’ at very high levels of transaction throughput, [and] perform continuous experiments related to on-chain scaling on that test network,” according to the group.

The initiative will build on the testing work already done by nChain and BU. Separately, nChain has already been able to test 32MB blocks, and BU’s “nolnet” testing network has successfully tested 64MB blocks—all significantly larger than the current 8MB cap on Bitcoin Cash, and far larger than a recent Bitcoin SegWit main-net block of about 1.3MB.

Scaling improvements realized through the Gigablock Testnet Initiative are expected to be implemented first on Bitcoin Cash, according to Bitcoin Unlimited.

“We anticipate that results from ongoing experiments carried out on this test network will add to the growing body of evidence that bitcoin can indeed scale into a functioning payment network for the world, following the design laid out in the original Bitcoin white paper written by Satoshi Nakamoto,” said Andrew Clifford, president of Bitcoin Unlimited.

Although they are the project founders, BU and nChain intend for the Gigablock Testnet to eventually become a self-sustaining resource of the bitcoin community, with contributors from across the world.

“Many people believe the Bitcoin network can power faster transactions and enterprise-level capabilities,” said Stefan Matthews, chief executive officer of the nChain Group. “We hope our efforts with BU inspire even more Bitcoin ecosystem players to work together—rather than fight each other—to advance Bitcoin’s role as the dominant cryptocurrency.”

Op-ed: Blockstream – The coordinated effort to undermine Bitcoin

I’m going to lay all this out – and it’s not going to be pretty. There is an active, coordinated effort to destroy Bitcoin and everything it was ever meant to be, and I will provide the argument.

Bitcoin development was progressing absolutely fine prior to the take-over by Blockstream. Many businesses were being engaged, and the user base was growing exponentially. But the growth in transaction rates have slowed right down, and businesses have stopped using Bitcoin. These are two undeniable facts, and are publicly verifiable. When a large percentage of Bitcoin Core developers are on the pay role of a single entity like Blockstream, then we have a huge, incentivised agenda to skew the roadmap.

The evolutionary response to a vice-like restrictive, governance grip on what is supposed to be an open-source community developed platform is a break-away into a multi-dev environment. The Bitcoin Cash fork was a point of culminating pressure which Blockstream has imposed by restricting Bitcoin transaction capacity. Of course, the hard fork itself, was something that Adam Back and company, tried very hard to prevent.

Op-ed: Blockstream - The coordinated effort to undermine Bitcoin

But the hard fork did happen. Contrary to Adam Back’s bullet-point defiant presentation, the split chain did not cause a loss of funds, nor a loss of confidence. In fact, confidence increased as investors saw an end to one major aspect of in-fighting.

It is no secret that Blockstream, and Core engage in heavy censorship tactics. The faceless shills of the Blockstream Core party flood various forums and social media, particularly twitter, with distracting posts, changing goal posts, and by using excessive numbers, actually manage to sway public opinion to some degree.

Identifying these paid trolls is usually not difficult at all. Usually, a brief search on most of their history will expose these shills for what they are. They are the prostitutes of the Blockstream party, whoring themselves out to satisfy the demands of a centrally governed entity.

Take for example the below troll (as one of many):

Op-ed: Blockstream - The coordinated effort to undermine Bitcoin

The user @EmeSteve rants and attacks Roger Ver and others repeatedly, and attempts to distort Bitcoin Cash public perception… what’s the agenda here?

Like anyone researching anyone else, we hunt through the history… and what do you find?

Op-ed: Blockstream - The coordinated effort to undermine Bitcoin

The early posts as seen above, were all entirely, 100% ads. These are ‘paid’ ads. This account is a ‘paid’ puppet account that does the bidding of the financier.

There are literally hundreds of such examples across twitter and forums. Some a better concealed than others. But scratch the surface and the undeniable fact that Blockstream/Core engage in whoring out paid trolls is exposed.

These trolls and shills are just one strategy in a multifaceted attack on Bitcoin. But they prey on the less-informed with devastating effect. Most trolls have nothing intellectually relevant to say, but where they succeed is in drowning out legitimate discussion, and diluting important topics with gutter-speak, and skewing public perception of popular opinion.

It is through such tactics and more, that the original Bitcoin scaling proposals such as BitcoinXT and Bitcoin Classic were dismounted. Dare I say it, it is how Bitcoin Unlimited got dethroned also – from forces above Blockstream even.

The strategies and techniques involved in these attacks come from an abundantly well funded source. It is not cheap to engage in DDOS (Distributed Denial of Service) attacks that can disconnect entire regions. Nor is it cheap to hire an army of faceless trolls to engage in social manipulation, in an eternal contract. The elaborate state of these attacks generally come well from funded state level operations. When Bitcoin as a peer-to-peer (P2P) currency becomes a direct threat to global payment processors, it means war. And a war has been happening since the birth of Blockstream in 2013.

Truth doesn’t need censorship. Nor does truth require shills or trolls. Each time you see a troll or a shill arguing one way, I challenge you to look the other way and discover the very thing they don’t want you to discover… When they try to discredit Roger Ver on twitter, it means Roger is on the right track. When they scream “known fraud” at Dr. Craig Wright, you can bet your bottom dollar that Wright has just made a very valid comment.

So the war is on…

When major payment processors started funding the development of Segwit, we could only scratch our heads. Why would these global corporations invest in a competitor… that is unless you’re investing in its derailment… Yes the duplicity is real.

Segwit with a capped transaction limit is a radical change to Bitcoin’s fundamental nature. Extreme changes require extreme proofs of viability. And not just viability, but great improvements also. Where is the transparent, open research conducted to show exactly how Segwit will improve Bitcoin longterm? Even with blocks being full of Segwit transactions, capacity will only increase to 150-170%. That is simply not good enough by any measure. The transaction capacity comes at a cost of a much bigger blocks also (due to witness data). So the actual return on investment is actually less than what it may have been with an equal size block of that capacity. Much of that PR relied on the delivery of Lightning Networks (LN). How will Lightning Networks operate holistically? How will it scale in the face of on-chain settlement with volatile fees and a restricted blocksize? What happens if you can’t close a channel in-time due to excessive chain usage?

Then there are some serious concerns that Lightning Network will make Bitcoin far more centralized than anything on-chain would.

Core devs will often argue that Lightning Network will alleviate fees. But then you have subscription fees that users will have to pay for the privilege of using LN in any case. In fact, Core dev Luke-Jr was caught admitting this very fact:

Op-ed: Blockstream - The coordinated effort to undermine Bitcoin

At the scaling Bitcoin Conference, the question was asked concerning the ETA for Lightning network. The short answer – 18 months, uttered only lightly. The technology is clearly far from ready, and as many analysts have stated, even if it were ready, it would not work to global capacity with a restrictive blocksize. If 1MB is not enough, then 2MB won’t be either. Either we open it up, or we intentionally destroy it.

Then we had the following update on the status of LN…

Op-ed: Blockstream - The coordinated effort to undermine Bitcoin

Despite Core developers constantly pushing LN as the scalability solution, it’s glaringly obvious Lightning Network comes with its own scalability issues. Lightning Network was never supposed to be a replacement for Bitcoin transactions. It can by all means support it, and users should be able to open their own private channels. But to ‘force’ users onto it is an abomination.

Bitcoin can already do, near-instant payments through SPV wallets… well at least Bitcoin Cash can after the removal of the cap and the RBF (replace-by-fee). Zero confirmation payments are absolutely possible!

Recently nChain’s Jimmy Nguyen presented some interesting research, demonstrating Bitcoin’s currently dormant smart contracts capabilities. It is very apparent, that Bitcoin’s designer left open the possibility to use the Bitcoin blockchain as a Turing tape in a Turing machine. Effectively being able to program all sorts of applications. One of the examples presented was that of a voting system, where each individual is assigned a public key. Imagine this scenario, where an entire population signs a transaction, on a capped 1MB, or even 2MB max blocksize… Suppose the cut off time to vote is midnight tonight, and you have a population wanting to sign. That is a catastrophe waiting to happen, because the congestion will simply not allow it, and it will bring the entire system to a halt.

When Blockstream Chief Technology Officer Gregory Maxwell says that full blocks “is the natural state of the system”, he’s telling a whopper. Unless you are the designer, you cannot state something like that. And the designer clearly stated the opposite in saying that the 1MB cap was temporary and should be increased. Maxwell’s work with Confidential Transaction and HD wallets is to be praised. But his damage to Bitcoin can’t be over-stated.

Following the split between Bitcoin and Bitcoin Cash, the move should have actually resulted in a toning down of attacks. But it did not. Intentionally calling Bitcoin Cash an alt-coin despite being a genesis Bitcoin sharing the genesis block, and censoring any speech calling it by its proper name is just the start of it.

So how do we know who’s right and who’s wrong as far as Bitcoin and Bitcoin Cash go?

There’s a simple answer here – but the trick is to always look ahead. Do the math, and look ahead, see where the technology, and economics lead.

Op-ed: Blockstream - The coordinated effort to undermine Bitcoin

Today, we know that Bitcoin Core works on a high fee, capped transaction policy. This isn’t going to change in the near future. Now let’s fast forward to the ultimate saturation point of investment… Suppose Core are so successful, that everyone is invested in Bitcoin… Suppose for a minute, that euphoria is reach… Now every transaction would cost hundreds of dollars at the least. If everyone is invested, and there is no more money to be coming in, then there is no point holding anymore, after all, it is counter-intuitive to transact with, given the hefty fees. The only reason anyone is holding capped Segwit coins today is because they are expecting the value to rise. These are profit seeking investors, and these investors will sell and cash-in at the earliest signs of market saturation.

Now re-play the same scenario with Bitcoin Cash (Bitcoin’s original roadmap). The entire world is invested in Bitcoin Cash, and the entire world can transact securely, and freely with minimal fees… Merchants transact and use it daily, knowing it is safe to use, does not cost you much, is mathematically governed, and will not lose value over time. The difference here is that Bitcoin Cash maintains a strong use-case upwards and onwards. Its utility remains very much alive and usable, even after market saturation.

On the other hand, Bitcoin (BTC), has effectively become a pyramid scheme. It’s only use case is literally store of value. And when everyone has their money in it, the only thing left to do is take it out.

Eli Afram
@justicemate

Australian Securities and Investments Commission releases ICO guidelines

Having raised over $2 billion so far in 2017, ICOs have been quick to attract attention from financial regulators worldwide. Regulators in China and this week Macau have implemented total bans on the practice, while in the US regulators at the SEC declared that some ICOs in fact come under securities rules and regulations.

The latest financial regulator to weigh in on ICOs is the Australian Securities and Investments Commission (ASIC), who have this week published guidelines for companies intending on offering ICOs.

According to the guidelines published on the ASIC website, ICOs will be subjected to different regulatory requirements depending on their structure, with some to be regulated under the Corporations Act, and others will be regulated under existing consumer laws.

ICOs that fall under the regulation of the Corporations Act would provide investors with a layer of protection against the risks associated with buying the token issue, thus the distinction will be regarded as crucial in determining the overall risk profile of a given token issue.

According to the regulator, the distinction depends on whether an ICO falls within the requirements of managed investment schemes, or MISs.

“In some cases, ICO issuers may frame the entitlements received by contributors as a receipt of a purchased service. However, if the value of the digital coins acquired is affected by the pooling of funds from contributors or use of those funds under the arrangement, then the ICO is likely to fall within the requirements relating to MISs. This is often the case if what is offered through the ICO has the attributes of an investment.”

Labelling an ICO a MIS, or any other type of securities instrument would create a range of compliance obligations and requirements for issuing companies, and may even require companies to obtain a prior licence before selling their tokens to the public.

However, if token sales are deemed not to be financial products, John Price, the ASIC Commissioner has some advice for investors: “investors will need to closely consider the ICO documentation as the investor protection regime under the Corporations Act will not apply.”

The guidelines from ASIC have been welcomed, and are in stark contrast to the more restrictive approach of China, for example, where ICOs have been effectively outlawed entirely.

Recognising the benefits of flexibility in raising capital through ICOs, the ASIC guidelines should provide some clarification for issuing companies, in what is fast becoming a global regulatory minefield.

Kik ICO concludes well short of expectations

The much-hyped Kik ICO has today come to a close, falling short of the expectations set out by the company ahead of its launch.

The funding drive, which saw the social messaging giant offering up their new Kin token for the first time, closed having raised a total of $98 million – some way from the initial $125 million funding target.

The funding was comprised of $50 million in private support from institutional investors, followed by a further $48 million from the open offering.

The Kik ICO had been flagged as one of the first of its kind from a mainstream company, and had been expected to easily surpass its initial target. However, the shortfall comes at a time of increasing scrutiny on ICOs, with financial and market regulators worldwide warning consumers about the unregulated nature of these types of investments.

This has included notably criticism from the US Securities and Exchange Commission, who went a step further in suggesting that some ICOs were in fact securities, and as such, companies issuing them must meet traditional compliance standards – obligations that many ICOs have thus far eschewed in favour of an unregulated approach.

The ethereum-based Kin token will ultimately be used across the Kik platform for a range of transactions, creating a plausible secondary market for buyers on the ground floor.

The messenger app currently reaches some 15 million users monthly in the key 16-24 demographic, and is regarded as one of the rising stars of the social media market. While the ICO has raised significant capital for the firm, the failure to hit their own target will be considered disappointing for the company.

However, with 10,000 investors from over 115 countries, Kik maintains their kin token is now one of the world’s “most widely held cryptocurrencies”.

Despite growing criticism and warnings on the ICO model from regulators, this month represents one of the busiest on record, with some $517 million raised in September so far.

This reflects a broader trend, which saw a total of $797 million raised through ICOs in the second quarter of the year.

While the results are disappointing for Kik, it seems the ICO model more broadly is continuing to thrive.

Don’t fall for ICO’s ‘new language, same game’ ploy

The search for new ways to raise money has paved the way for the rise of the so-called Initial Coin Offerings, or ICOs.

More than $2 billion have been raised in about 148 ICOs this year alone, according to data from Coinschedule. And that’s not surprising, given the number of new companies—in every sector imaginable—that have been trying to initiate token sales nearly every day for the past 12 months.

Buying into the ICO craze, however, comes with risks, which are significantly higher than buying stocks. In China, the central bank has already banned fundraising activities that use digital token sales and ordered companies that have already raised money via ICOs to refund their investors.

“Ninety-nine percent of ICOs are a scam so this [clampdown] is needed to filter the crooks out,” tweeted venture capitalist Chamath Palihapitiya.

New language, same game

Despite it’s popularity, experts and venture capitalists have yet to proclaim ICOs as the panacea for a start-up’s fundraising problem. Why? Because many of them are scams.

Ray Dillinger, who did the code review and security audit for the blockchain portion of the Bitcoin source code and had been in close contact with Satoshi Nakamoto, wrote in a blog post that this isn’t the first time that these copycats existed, and it won’t be the last. Digital cash systems had tried to launch even before 1995, he said, and the fact that these launches didn’t make it to the mainstream audience will speak of their success, or lack thereof.

“Sadly, many of the people who launched these alternates don’t know what they’re doing. Even more sadly, most of them do know what they’re doing, and at least three quarters know that what they’re doing is ripping people off. They strive to do it as well as they possibly can, usually by means that I can’t really distinguish from blatant stock price manipulation and insider trading,” he wrote, noting that the people behind the early version of digital cash systems went to jail because they abused their position of being trusted.

In security context, the term “trusted” is seen a weakness because it means that “something or someone has the power to break your security by acting in bad faith.” Before Bitcoin, Dillinger said digital cash systems have only managed to limit the damage a “trusted” role can do, but Satoshi has developed a system without a “trusted” role. At all.

“The Trustless nature of Bitcoin was the main thing that convinced me Satoshi wasn’t scamming. He built a highway with no toll bridge. People could use Bitcoin without creating any obligation to pay him anything ever. He wasn’t selling coins, he was giving them away for solving hashes. He reserved nothing for himself,” Dillinger said.

Now, a new breed of people are playing the same digital cash game, but with a new language: ICOs.

“They have created code with Trusted roles intended specifically to make the kind of toll bridges that Satoshi convinced me he wasn’t a scammer by leaving out. They’ve even taken to selling all the coins, just like e-gold or a bunch of other digital-cash launches from previous decades that wound up with people going to jail—except now they’re calling them ICO’s,” Dillinger said.

There’s no denying that there may be some good ideas caught up in the flood of these flakes who don’t have real business plans and will most likely crash and burn when the whole thing ends in prosecutions. But why not do it legally and through the appropriate authorities?

For those still interested in taking part in ICOs, Dillinger has one piece of advice: practice due diligence.

“I believe that blockchain technology, once the current state of confusion is over, will contribute vastly more to the world than all the scams put together have taken or destroyed,” he wrote. “But good lord, what we started. I hate to even imagine how many billions of dollars of scams and failures and thefts have been perpetrated by abusing people’s faith in and enthusiasm for that technology by now. And I have no idea how we could possibly have prevented it.”

Patent-pending FICO tool wants to collect Bitcoin exchanges’ data

Data analytics company FICO has developed a system that will collect financial data from Bitcoin exchanges, essentially centralizing all information in the name of catching money launderers.

FICO’s U.S. patent application, called “Advanced Learning System for Detection and Prevention of Money Laundering,” describes a programmable system that gather publicly available information from cryptocurrency exchanges and miners to track the flow of digital currencies. The information gathered can be used to create “threat scores,” which bank specialists can use “to identify behavior for a banking customer that is suspicious and indicates high likelihood of money laundering activity.”

“Because emerging payment systems such as mobile and cryptocurrencies may have limited interaction with traditional financial institutions, there are more limited opportunities to detect laundering which involves them,” the filing stated.

To improve detection, FICO said it plans to create “a Cloud-based data store [that] integrates information from multiple sources,” such as “entities associated with legal and illicit Bitcoin exchanges” as well as “entities associated with mobile payment and remittance networks.”

The system’s implementation can go beyond exchange operators. According to FICO’s patent filing, it can also be applied to other areas of the Bitcoin ecosystem as “it is important to collect and centralize information on legal exchanges and administrators,” including miners and the like.

It goes without saying that centralizing information goes against Bitcoin’s decentralized nature—a concept that banking giants and the government cannot get their heads around. Money laundering and tax evaders continue to be among the main concerns for any government, especially in the United States, which has already resorted to employing tactics that can be considered extremely invasive into the privacy of its law-abiding citizens.

In August, it was revealed that the U.S. Internal Revenue Service has been using Bitcoin tracking software that allowed the tax agency to “trace the movement of money through the Bitcoin economy” since 2015. The IRS is also in the middle of a legal battle with digital currency exchange Coinbase, which is trying to push back against the agency’s attempts to gain records of all cryptocurrency transactions that took place from 2013 to 2015.

While it may not be up to the task of fully dealing with fraud, FICO’s tech shows that the big players in the financial services landscape are daunted by Bitcoin and the growing number of individuals who are converting to digital currencies. And with decentralized exchanges on the horizon, FICO’s plans to track blockchain-related transactions will be useless.

Nigerian Central Bank preparing cryptocurrency white paper

The Nigerian central bank has announced it is preparing a new research paper into cryptocurrencies and the blockchain, as it becomes the latest central bank to examine the technologies more closely.

According to media reports this week, the bank’s Deputy Director, Musa Jimoh unveiled the plans at a blockchain conference in Lagos, where it was suggested that the Central Bank of Nigeria would turn an increasing focus on the rise of cryptocurrencies and potential use cases for blockchain technology.

Crucially, he noted the bank’s reasoning for the study, suggesting they “cannot stop the tide of waves generated by the blockchain technology and its derivatives”, a recognition of the need for regulators to adapt to changing market conditions.

His comments have been deemed particularly significant in light of the current trend towards increasing regulation globally, with the Central Bank of Nigeria specifically tasked with regulating both banking and financial sectors, as well as setting the monetary policy agenda.

The white paper will investigate a plethora of issues around the rise of cryptocurrencies, and aims to better equip the central bank to respond to the growing challenges and opportunities posed by the technologies.

Nigerian regulators, including the Central Bank, have already voiced concern about some of the potential pitfalls for investors in engaging with currently unregulated operators in the space. Earlier this year, the Nigerian SEC joined the fray, making its concerns about some operators public.

“The Commission wishes to alert the public that none of the persons, companies or entities promoting cryptocurrencies has been recognized or authorized by it or by other regulatory agencies in Nigeria to receive deposits from the public or to provide any investment or other financial services in or from Nigeria.”

Elsewhere, sentiment at the Lagos conference was generally positive, with delegates pointing to a number of local success stories amongst fintech developers and early proponents of the underlying blockchain technology.

Dr. David Isiawe of the Information Security Society of Nigeria summed up the general feeling amongst delegates when he described the inevitability of the march to prominence of blockchain technologies, “whether we like it or not.”

Becky’s Affiliated: Calvin Ayre on the brilliance of Bitcoin, London’s role and an appeal for Antigua

After five years away Calvin Ayre has returned to the media scene and has chosen to conduct his first video interview dedicated to the subject of Bitcoin here in London with CalvinAyre.com.

When asked what in the world he’s been up to for half a decade, Ayre responded with, “I’ve had a wonderful holiday in Antigua [laughs].  All joking aside, I’ve been involved in the Bitcoin industry.  I did my first investment into a crypto-currency company in 2010 and since then I’ve done a number of other investments and I’ve got more coming down the pipe”.

Ayre, who now holds the official title of “Bitcoin Entrepreneur and Economic Envoy to the Government of Antigua”, is a huge supporter of Bitcoin Cash (BCH), the progeny of the Bitcoin blockchain hard fork on August 1, 2017.

“Myself and a lot of other people as well that I’m working with in the industry believe that massive on-chain scaling and the subsequent low transaction fees that we believe will come out of [BCH] is what’s going to drive the crypto-currency movement.  We think low transaction fees will increase the velocity of transactions and will increase the value and security of the one public Blockchain which I believe will be BCH”, Ayre revealed.

One of the challenges with BCH at present is the general public’s lack of understanding on why the currency is such a breakthrough for Bitcoin and even if people do understand, they don’t know how to get a hold of BCH.

“I would start by advising everybody that owned BTC before the fork to learn how to split their BCH out because a lot of people actually have it and don’t know it and if they don’t go to the exercise of actually splitting it and getting it, it could be lost forever”, shared Ayre.

Becky’s Affiliated: Calvin Ayre on the brilliance of Bitcoin, London’s role and an appeal for Antigua“People who aren’t in the economy at all, clearly they are have to do some research and find an exchange that services their country and go in there and learn how to do it and buy it, put it into a competent wallet and not only sit on it if you think that’s a solid investment, but also use it for transactions”, he said.

“Now that BCH is here and the transaction fees are going to be coming down, in fact they’ve come down substantially already, there’s going to be a lot of opportunities on the internet to actually use it as a value transfer”, he added.

While Ayre has clearly dedicated himself to the growth and success of Bitcoin Cash,  there is plenty of hype surrounding the hundreds of “Altcoins” in existence today such as Ether (the token used by Distributed server processing system Ethereum) and Litecoin.

“Altcoins is a phase.  It’s a phase we’re going through right now. There’s a chance that there will be a niche for some altcoins, but its very unlikely to me”, Ayre shared.

“Mostly I think most people are going to lose 100% of their money with Altcoins and really at the end of the day the one secure, public Blockchain that will remain standing when the dust settles in one or two years from now will be able to do everything. There’s nothing that any other Altcoin can do that Bitcoin can’t do”, he said.

“You just have to ask yourself, do you need two internets? Do you need two music protocols? Do you need two fax machine protocols? Well the answer is ‘no’.  You don’t need two secure, public Blockchains and BCH can do it all and it will”, he added.

With the freedom to travel wherever he pleases these days, one must wonder why Ayre chose London as the location to make his first media appearance in years.

“I was recently appointed as an Economic Envoy for the Government of Antigua, specifically focusing on trying to create an industry around Bitcoin and also to polish up the existing industry in online gaming.  There’s some things I can fix there, but the real opportunity for Antigua is to get into this burgeoning new cryptocurrency space.  The convergence of online gaming and Bitcoin is actually in London, it’s the global leader in both those spaces right now”, shared Ayre.

“So I’m actually in London to meet with the Antiguan High Commissioner and what I’m hoping is that we can find a way to get more connections between both of these industries back to Antigua, specifically with Bitcoin.  I think that there will be opportunities. The government of Antigua is very supportive of Bitcoin and in fact they are right now working on changing their laws to make it more hospitable for Bitcoin start-ups in certain areas”, he added.

Spending a lot more time in London and other locations around the globe is something Ayre is looking forward to over the coming years, but his heart will always hold a special place for the beautiful country of Antigua and Barbuda.  Ayre’s Foundation is dedicated to providing hurricane relief to Barbuda, something the tiny island is in desperate need of after getting hit by a category five hurricane a few weeks ago.

“Climate change is real.  The storms are getting bigger and Antigua does need help right now.  I will make an appeal right now that you can go the Antiguan Government’s website or you can go to my Foundation website and you can find out how to donate money to the Government of Antigua.  My Foundation does not accept money although we are allocating funds from my Foundation to this great cause”, shared Ayre.

***Donations can be sent to the Official Barbuda Relief & Rebuilding Fund via the official government website. 

For the first time, cryptocurrency is being used in a relief effort. Donations in Bitcoin and Bitcoin Cash are also accepted via the following addresses: 

Bitcoin Cash (BCH) – 1L89GJ3ecXh2PdZpDxPd5YwaLY1bYNcsNS 

Bitcoin (BTC) – 15fT2nvS8NUs9D9aLF12rVAKb37cUiuoar 

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Swisscom launches new Blockchain entity

Swisscom, one of Switzerland’s biggest telecommunications firms, has announced the launch of a new entity to focus on blockchain technology.

The company, which is owned by the Swiss state, unveiled the new company, Swisscom Blockchain AG, this week, to focus on a range of blockchain services.

These will include support for companies organising ICOs, in addition to providing enterprise-grade solutions for larger scale applications.

The launch comes a matter of weeks after Swisscom joined the Hyperledger consortium, a group of over 150 companies working in collaboration to develop infrastructure for blockchain technologies.

In addition, Swisscom is a member of a Switzerland-based blockchain consortium, which includes Zürcher Kantonalbank and SIX, the country’s largest exchange operator. The consortium announced back in January that it had devised a protocol for OTC trading in ethereum, and is currently working on several other deployments of the technology.

The decision to launch a company specifically targeting blockchain is an escalation of Swisscom’s interests in the blockchain space.

Since joining Hyperledger, Swisscom has been notable in their optimism and proactive approach to developing blockchain solutions, a sentiment that continues to influence their strategy, according to senior executives.

Johannes Höhener of Swisscom said their aim is to provide the support clients need to escalate their own blockchain projects, through combining their increasing expertise in distributed ledger technology.

“We want to provide support as a catalyst with expertise, experience and implementation skills.”

The new blockchain unit will look to develop a range of apps, including developments specifically targeting off-exchange trading. The company is expected to build a team of up to 20 by the end of 2017, as they look to develop into a significant force in blockchain services.

The company has already secured its first few clients, drawing in companies from across the financial and insurance sectors, with interest from several others across the retail and manufacturing sectors.

Swisscom Blockchain AG will be 70% owned by Swisscom, with the remaining equity divided between the founding partners. EY Switzerland’s Daniel Haudenschild will move to head up the company, bringing with him several other members of the EY team, in addition to staff seconded from Swisscom directly.

Brazilian Central Bank Announces Blockchain Settlement Proof-of-Concept

The central bank of Brazil has become the latest global banking authority to announce its intentions to pilot new technology on the blockchain.

Banco Central do Brasil made the announcement public in its latest research paper published this week, detailing its plans to develop a blockchain-based proof-of-concept for settlement, as well as a number of other potential use cases for the technology.

While a number of use cases were examined in the report, published by a study group at the central bank, it was settlement that was deemed to be most ripe for development in initial prototyping and proof-of-concept efforts.

However, the bank stopped short of recommending a wholesale switch from existing systems, instead positioning their proof-of-concept as a backup, in the event of what the report described as a ‘complete main meltdown’.

According to the report, a contingent system developed through the blockchain could allow for an immediate replacement in the event of a catastrophic failure of their current protocols.

“In the case of its catastrophic failure, RTGS members would be unable to send (or receive) funds to (from) each other, leading to a complete financial halt. … In this context, the Alternative System for Transactions Settlement (SALT) is a conceptual system for a contingent solution that would be able to immediately replace core functionalities of the main Brazilian RTGS in case of its full collapse.”

The concept would include the central bank as validating nodes within a permission-based blockchain system. According to the report, the bank’s end goal could be to create a shared network environment of settlement data, although naturally the privacy concerns of this type of network would require further development.

The report from the Banco Central do Brasil brings it in line with similar research findings from central banks elsewhere, with a number of central monetary authorities investing in a greater understanding of blockchain technology and how it could help improve financial systems in future.

The Monetary Authority of Singapore has been at the forefront of this type of exploration, concluding their own similar research report tackling settlement as a use case for distributed ledger technology.

The Bank of England too has taken similar steps, and has even gone as far as to ensure that forthcoming upgrades to their settlement technology are compatible with blockchain technology.