Jack Davies blog series delves into finer details of Metanet

The Metanet concept was first introduced by nChain Chief Scientist Dr. Craig Wright less than a year ago. Speaking at the CoinGeek Week Conference, Dr. Wright unveiled the concept as a vision for new paradigms for the Internet and data sharing.

The Metanet protocol is defined by inventor Dr. Craig Wright in concept as a ‘value network,’ which would relegate the Internet to a sidechain of a more comprehensive Bitcoin blockchain.

“The Internet becomes a sidechain to the Bitcoin blockchain. The Metanet is a value network — the entire global system of online activity and data connected commercially.”

Now, nChain researcher Jack Davies has taken this a step further, in a new blog series designed specifically to raise awareness and understanding of the Metanet in concept, and the Metanet protocol which supports its development.

In part one of the Metanet blog series, published on Medium, Davies wrote: “The Metanet represents a complete and utter redefinition of the paradigms that pervade the existing Internet infrastructure — particularly with respect to human interactions and the value we ascribe to them.”

Davies said that the Metanet helps address a fundamental problem with the Internet — that high quality data cannot be available free of charge.

He argues that information comes at a cost, and that these costs cannot be accurately met by the current structures of the Internet and data sharing, and that information quality benefits when true value is ascribed to the information.

“The broad solution, therefore, is an internet-like platform that puts the value of data at the centre of everything,” Davies wrote. “When it is expensive to deploy thousands of bots to spread falsehoods, when the mere act of reading an article requires a cost barrier, we are forced to think: how much do I value this data as information?”

He added, “It is here where the issues we face with the current Internet begin to fall away. By incorporating financial costs — however small — into our online behaviour, we are asked to express how much we truly value information with our wallets. Here lies one of the central goals that the Metanet, running natively on top of Bitcoin SV, can achieve.”

The series of blog posts is expected to cover the concept in overview, as well as specifics in relation to the Metanet protocol, with a view to raising awareness amongst BSV developers towards the end goal of a more valuable global data sharing infrastructure, powered by the technological superiority, and particularly the mass scalability, of BSV.

Post-Quasar London BSV Meetup explores evolutions in Bitcoin SV

Following the success of the recent Quasar upgrade, scientists and researchers gathered in London for the London BSV Meetup.

The event, which aims to brief Bitcoin SV (BSV) developers on the latest research and development work on BSV, brings together some of the leading voices on Bitcoin SV, including keynote speakers Alex Mackay, Joe Dalais and Steve Shadders of nChain.

Alex Mackay, a researcher at nChain, presented on “Miner ID and the Future of Mining.” He told delegates that nChain already has a proof-of-concept for the Miner ID model, though this was not yet ready for public demonstration.

According to Mackay, Miner ID would become increasingly central, with users requiring some mechanism for identifying and interacting with miners.

“As we scale BSV and blocks get bigger, there will be a shift in the ratio of fees miners incur — from block rewards to transaction fees. Sometime in the future, mining subsidies will run out, and miners will have to support themselves through mining fees,” he explained. “Miners at the gatekeepers to some valuable blockchain data. We need to develop the tools so they can create more revenue streams from that data.”

Joe Dalais presented on Metanet identity, explaining: “When you have identity on-chain, you can interact a hell of a lot more with the rest of the globe – and businesses can interact with you…When you start attaching your identity to transactions, it becomes a lot more powerful.”

Giving the example of a product refund, Dalais said a sale receipt stored on-chain and linked to an individual identity would provide certainty for retailers over the legitimacy of returns.

While at the moment, retailers require physical receipts, or even the presentation of the purchasing credit or debit card, “in a Bitcoin world, all they need is your alias.”

Meanwhile, Steve Shadders, CTO at nChain, discussed the Quasar upgrade, which he said activated smoothly, with no reports of service degradation.

Shadders said the Quasar upgrade “represents a shift in the way bitcoin governance works,” moving more of the emphasis from developers to miners.

While he noted that the upgrade to a 2GB block size was four times the originally envisaged size, he suggested the block limit would allow essential flexibility for developers, and particularly for increasing storage capacity on the BSV blockchain, saying:

Bitcoin caps aren’t meant to be there at all, and if they are, they aren’t meant to be hit.

The July event follows on from previous meetups, designed to encourage developers to be more ambitious in their BSV projects, while informing of the latest upgrades to the BSV protocol.

To learn more about the exciting developments happening on BSV, as well as the benefits of massive blockchain scaling for miners, application developers and enterprises, attend the upcoming CoinGeek Conference, taking place in Seoul, South Korea, on October 1-2. Get your tickets now.

Don’t believe the FUD: How Bitcoin SV block reorgs, orphans affect you

There’s no shortage of anti-Bitcoin SV (BSV) propaganda spreading FUD (fear, uncertainty and doubt) about reorgs and orphans. But in reality, these features of BSV are far from the bogeymen they are made out to be.

Reorgs and orphans have been the subject of countless scare stories in recent weeks, some suggesting BSV is “faulty” or that user funds could be at risk. But increasingly, users are being advised not to believe the FUD.

In a blog post, crypto advisory firm Bitstocks set out to explain how reorgs are, in fact, a natural event in healthy blockchains, as per the Nakamoto Consensus.

“In plain language, a block reorg event is a normal part of the Nakamoto Consensus mechanism that solves the double-spend problem of distributed systems. For each new batch of transaction ordered, miners compete to solve an intricate computational problem, known as a ‘hash,’” according to the Bitstocks blog post. “The first miner to find the correct solution and broadcast it to the network earns the right to record the latest batch of valid transactions to the blockchain. In return, they receive a block reward (a combination of transaction fees and newly minted Bitcoin).”

The principle that the longest valid chain is the official one creates orphans in instances where two or more miners temporarily split the network. Far from creating a security risk, orphans validate the integrity of the blockchain more effectively.

Bitstocks noted, “There are also occasions where two different miners reach the finish line so close together, that the network is temporarily split on calling the tie. There are now two competing versions of the blockchain with slightly different endings. In these scenarios, the Nakamoto Consensus rule of ‘the longest valid chain is the official one’ comes into effect.

“The nail-biting competition is usually settled as soon as the next hash is solved and recorded to either one of the competing chains making one longer than the other. And that settles it. The winning (longer) chain is retained as the official version of the blockchain and the losing chain is ‘orphaned’.”

nChain Chief Technology Officer Steve Shadders said that reorgs and orphans were actually how Bitcoin was intended, with Bitcoin SV the only cryptocurrency that adheres to the Satoshi Nakamoto white paper protocol.

“We’ve all been told for ten years that orphans are bad and a security risk. But it’s simply not the case; it’s actually how Bitcoin is supposed to work,” he explained.

Dr. Craig Wright has also pointed out orphan blocks are not a “flaw”—they are, in fact, a necessary part of the system that makes Bitcoin strong.

“Many developers think that Orphan blocks are a primary concern that needs to be address and worse, fixed,” Wright wrote in his “Iron and Steel” Medium post. “Orphans are not a flaw; they are the carbon introduced into the Iron that makes Bitcoin steel.”

BSV miners raking in high rewards per transaction

Miners of Bitcoin SV (BSV) raked in the highest rewards per transaction over the weekend, a snapshot of data captured has revealed. In a comparison with SegWitCoin (BTC) and BCH, BSV miners came out on top in terms of the mining rewards secured, providing a greater incentive to mine BSV than the others.

Users on social media flagged the discrepancy, and questioned when this would encourage more miners to switch to BSV over mining BCH and BTC cryptocurrencies. Twitter user winterwishin posted a screenshot comparing rewards in the past 24 hours for BSV, BCH and BTC, highlighting the higher rewards per transaction on offer for BSV miners.

In the tweet, the user asked how long it would take miners to realize that BSV was the best option: “BSV has the most tx few rewards for miners in the last 24 hrs. This is just the beginning. When will other miners realise?”

In data posted on Twitter, BSV reported some 130 blocks in the last 24 hours, compared to 132 for BCH and 174 for BTC. However, while BTC posted and BCH posted rewards of 1650+0.3825 BCH and 2188+26.58 BTC respectively, BCH edged them out, with rewards of 1625+26.88 BSV over the 24 hour period.

The discrepancy means miners would be better off mining BSV than either of the other options, with higher rewards for those that choose to get behind the cryptocurrency.

Bitcoin SV is the original bitcoin as intended in Satoshi Nakamoto’s whitepaper, offering payments at mass scale with low cost transactions and fast transaction speeds.

Designed to be affordable and efficient for sending payments and powering apps and other services, this is reflected in the lower average transaction value of 2.99 BSV—roughly $439.41, compared to over US$11,000 for BCH and US$16,833 for BTC.

The median transaction value shows an even more accurate picture, at just $1.34 for BSV, compared to $172.13 in the case of BTC.

The news is further incentive for miners to switch their attention to BSV, at a time when the cryptocurrency is increasingly gaining traction as the coin of choice amongst miners, developers and users.

Binance CEO: Crypto needs real projects, not ETFs

Binance CEO: Crypto needs real projects, not ETFs

The CEO of crypto exchange Binance has dismissed those striving to launch a crypto exchange traded fund (ETF), saying what the industry needs instead is more entrepreneurs and more projects to take the sector into the mainstream.

Changpeng Zhao, known in crypto circles as CZ, said during a Periscope stream that rather than ETFs, “for our industry to grow we need more entrepreneurs to build real projects.”

The comments from the influential CEO come at a time of renewed optimism around ETF proposals from VanEck and SolidX, which are hoping to clear regulatory approval with the U.S. Securities and Exchange Commission (SEC).

The prospect of an ETF launch has investors excited too, with the suggestion that anticipation was responsible for a temporary recovery in Bitcoin Core (BTC) prices. But according to CZ, continuing the development of crypto projects and creating new crypto entrepreneurs was more important to the success of the sector.

Exchange traded funds are instruments listed on mainstream financial exchanges, giving investors the chance to buy securities pegged to investments in underlying assets. In the crypto case, this would mean a mainstream, traded investment product tied to the growth of cryptocurrencies, which many assume would attract larger institutional investors into the space.

CZ’s view is that development activity will help create new products and services which will guide crypto to mass adoption, suggesting that this would be a better focus for optimism than the launch of an ETF.

In interview, CZ said he expects Amazon will eventually be forced to issue its own altcoin, which he expects will be another significant event in the journey of crypto to mass adoption and usage.

His comments come at a time of rapid growth in the number and scope of projects in cryptocurrency, with the most notable development action happening around Bitcoin SV (BSV). Preferred for its superior technological infrastructure, Bitcoin SV is winning fans amongst merchants and consumers, as well as startups looking to develop blockchain projects.

With ultra-low transaction fees, fast processing times and infrastructure designed for handling mass global scale, Bitcoin SV is fast becoming the standout choice for development projects.

Customer chases Bittrex exchange over missing $6,000 worth of Bitcoin SV coins

Customer chases Bittrex exchange over missing $6,000 worth of Bitcoin SV coins

Cheating is defined as acting dishonestly to gain an advantage. It’s also an accusation being thrown at cryptocurrency exchange Bittrex over its alleged failure to credit one of its customers his Bitcoin SV (BSV) coins—57 of them to be exact.

First, some background. In November, the crypto exchange suspended withdrawals and deposits of Bitcoin Cash prior to the November 15 network upgrade, which led to a hard fork from which Bitcoin SV emerged. At the time, Bittrex assured its customers that it would “take all reasonable steps to ensure that customer funds can be preserved on both chains.”

“Bittrex will make all reasonable attempts to credit our users BSV chain split tokens,” Bittrex stated, although the exchange stressed that it “will not recover incorrectly made cross chain deposits under any circumstance due to the lack of replay protection.” It’s worth noting that the BSV chain has applied replay protection, effectively bringing the hash war to a close.

For one user, however, the battle has just begun.

Twitter user @nomadiklyfe recently filed a complaint before Bittrex, claiming he lost 57 BSV worth almost $6,000 that are “stuck in an address” on the exchange’s Remote Procedure Calls (RPC) server.


CoinGeek reached out to nomadiklyfe, who explained to us the incident, saying, “So supposedly they have a policy on BSV that any coins which were deposited incorrectly, i.e. if you sent BCH to your BCH wallet and that transaction as replayed over BSV network, they will not recover your funds. I have moved the corresponding BCH out and there would be no replay issue if they were to recover my funds. Their policy is not to do.”

Bittrex is based in the United States, where cryptocurrencies are defined as commodities. This means the U.S. Commodity Futures Trading Commission (CFTC) has the authority to prosecute cases of fraud and manipulation in the crypto space.

For nomadiklyfe, however, there is a simple fix: “Ultimately, I would like for Bittrex to fix their policy and return their users’ money, including my own.”

South Korean lawmakers to champion legalised ICOs

South Korean lawmakers to champion legalised ICOs

South Korea has been on the frontline of ICO regulation in recent months, following the decision of lawmakers there to outlaw initial coin offerings, as part of a wider crackdown on activities within the cryptocurrency space.

Now, a group of lawmakers is reported to be working on a bill that would seek to overturn the ban, and reintroduce ICOs on a legal footing.

According to local media reports, lawmakers are drawing up proposals which could be presented later this year, of early 2019 at the latest. The proposals are being led by Rep. Hong Eui-rak, who told the National Assembly this week of his plans to challenge the 2017 ban.

“The bill is aimed at legalizing ICOs under the government’s supervision…The primary goal (of the legislation is helping remove uncertainties facing blockchain-related businesses,” Hong said, according to Korea Times.

However, far from a return to the free-for-all conditions of the unregulated market, the proposals would allow only “research centers” and public organisations from deploying the funding model, which most market analysts would consider a step in the right direction for legitimising token issues. Nevertheless, the proposals will come as a surprise to some, following the decision in South Korea to ban initial coin offerings in the first place.

The 2017 decision seems to have had little impact on trading volumes or interest in the wider cryptocurrency space in South Korea, save for a reduction in the number of dubious ICOs being launched each month.

It follows similar moves by regulators elsewhere to bring ICOs in line with existing securities laws. In the U.S., for example, the Securities and Exchange Commission declared some ICOs to be de facto securities, accompanied by several other motions towards a formal, regulated environment for the ICO model.

Authorities in China have come down hard on the other extreme, effectively banning the model outright—a policy approach that has apparently gained some traction across other Asian countries.

This makes a new structure in South Korea potentially even more significant, and the chance to set a new precedent for regulating ICOs in the region.

With the implications of the 2017 ban still becoming apparent, it remains to be seen whether the more moderate approach proposed in the bill will gain the necessary support to become law, and to soften the regulatory approach to ICOs in South Korea.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
Edit wars prompt Bitcoin Cash Wiki page lockdown

Edit wars prompt Bitcoin Cash Wiki page lockdown

The debate over the identity of Bitcoin has intensified in recent weeks, with BTC Core supporters resorting to trolling Bitcoin Cash (BCH) on Wikipedia in their latest attempts to claim exclusive ownership of the Bitcoin name.

As a result, Wikipedia have locked the page, preventing further malicious edits to the Bitcoin BCH entry. This often occurs around controversial topics, or when Wikipedia editors dispute the neutrality of a post, resulting in Wikipedia’s internal dispute resolution process.

At the moment, the page displays a notification about its status: “The neutrality of this article is disputed. Relevant discussion may be found on the talk page. Please do not remove this message until conditions to do so are met.” The last edit to page was made on May 2, 2018.

Following through to the talk page reveals more about the reasons behind the temporary lock, which states:

“There have been attempts to recruit editors of specific viewpoints to this article. If you’ve come here in response to such recruitment, please review the relevant Wikipedia policy on recruitment of editors, as well as the neutral point of view policy. Disputes on Wikipedia are resolved by consensus, not by majority vote.”

Even Bitcoin ABC lead developer Amaury Séchet noticed the lockdown on the Bitcoin Cash Wiki page due to repeated vandalism, commenting on Twitter that “‘Cypherpunks do Orwellian shit’ is the new ‘Cypherpunk Write Code.’

Further inspection shows that the majority of recent suggested edits have been attempting to include references to ‘Bcash’, a term considered inappropriate by those in the BCH community. Some have even suggested this is an intentional attempt to confuse or deceive, by introducing confusing alternative names for Bitcoin BCH.

Referencing user FoxyJim, who tried to change the name to ‘Bcash,’ Wiki editor Toomuchtalk was keen to set the record straight: “Foxyjim obviously doesn’t understand what Wikipedia is — Just because a disagreeing faction created a derogatory name in an effort to obscure the truthful Bitcoin history and are upset that they are using the name Bitcoin does not make the use of Bcash a legitimate historical fact.”

These are just the latest front for attacks from the BTC Core community, with others taking to the Wiki page to dispute sources, the events surrounding the fork, and the Segregated Witness protocol.

The central dispute between Bitcoin BCH and BTC reflects conflicting interpretations of Satoshi’s original vision, with SegWit now straying further from the cryptocurrency concept as envisaged.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
Iranian government outlaws Telegram app

Iranian government outlaws Telegram app

Authorities in Iran have outlawed use of and access to the Telegram messaging app, citing concerns over its potential for stoking civil unrest as well as the potential economic harms of its cryptocurrency.

According to state news outlet Mizan Online, the decision was prompted initially by fears that armed opposition militia were using the app to encourage rebellion. Similarly, government officials highlighted problems with the Telegram initial coin offering (ICO), which they suggested could undermine the local economy.

The news follows on from public calls by officials in April, in response to the second round of funding for Telegram. In the second phase of their ICO, Telegram’s pot grew to $1.7 billion, behind its concept for the development of a full-blockchain Telegram ecosystem.

The news will be a blow for consumers in Iran, and in particular, the 40 million or so in the country known to be users of the platform—roughly 50% of the entire population of Iran.

Nevertheless, Telegram has long been controversial in the country. Back in January, access to the service was temporarily suspended following street protests, which it was alleged were stoked by use of the app.

In particular, the government points to foreign-based agitators, whom it alleges were using the Telegram app to incite protest and violence amongst Iranian citizens. This resulted in Iranian authorities attempting to launch their own social networks to reduce the reliance on foreign-owned properties, which they claim present an anti-establishment bias.

One of those platforms, Soroush, claimed it has 5 million members, despite having been setup only a matter of months ago. Alongside rival platform, Gap, Iran’s President Hassan Rouhani urged Iranians to choose government-approved alternatives in his final message on the platform several weeks ago.

Iran’s supreme ruler, Ayatollah Ali Khamenei also posted to Telegram for the final time in April, committing to using alternatives in place of Telegram.

The ban will impose duties on phone and Internet service providers, who are now compelled to block access to Telegram by law. Any breach is deemed a contravention of the law, and firms that do not comply will be liable to prosecution.

It remains to be seen whether the move to ban the service in Iran will further undermine interest in the Telegram ICO.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
Malta green lights new cryptocurrency bill

Malta green lights new cryptocurrency bill

Malta’s cabinet has given the go-ahead to three separate bills relating to blockchain technology and cryptocurrency, including measures that would introduce a framework for regulating cryptocurrencies and initial coin offerings (ICOs).

Amongst the three bills, the Virtual Financial Assets Bill sought to create a structure for regulating ICOs and cryptocurrency transactions in the country, as part of a wider drive to make Malta more amenable to the cryptocurrency sector. The bill was presented alongside the Technology Arrangements and Services Bill, and the new Digital Innovation Authority Bill, ahead of a debate in the Maltese Parliament.

Following the debate phase, the bills will likely be voted through into law, according to local media reports.

Silvio Schembri, the Parliamentary Secretary for Financial Services, Digital Economy and Innovation, said he was confident the laws would provide legal certainty, with positive effects on the cryptocurrency sector in Malta.

“Once new laws surrounding blockchain technology and cryptocurrency are enacted in Malta, banks would be less reluctant to welcome companies working in the industry, presumably due to the legal certainty it would provide,” Schembri said, according to the Malta Independent.

The parliamentary secretary was also quoted by Malta Winds saying that regulating the cryptocurrency and blockchain market ensures “that the three main principles of financial regulation are adhered to,” resulting in a sector “that protects the investor and provides market integrity and financial soundness.”

Leading Maltese law firm Mamo TCV Advocates said the proposed laws would strengthen Malta’s hand as a hub for blockchain and ICOs.

The bills vest regulatory power in the Malta Financial Services Authority, which includes the power to publish specific rules relating to listings, to suspend trading and to require information on demand. Should the bills eventually be signed into law, they could pave the way for the new growth in Malta as a destination for blockchain companies and initial coin offerings.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
MyEtherWallet falls victim to DNS attack

MyEtherWallet falls victim to DNS attack

Client-facing Ethereum wallet MyEtherWallet has become the latest victim of a DNS attack. Users of the service reported missing funds, which have been confirmed by third party sources, as a result of the hijacking of their servers—a factor security experts have attributed to the risks of providing access to funds from a centralised source.

Initial reports began emerging on Tuesday, with users reporting suspicious behaviour around their MyEtherWallet accounts. The platform does not hold any cryptocurrency itself, but by providing a centralised interface for users, it is subject to the same risks that affect any website—the risk of a hack to the DNS servers, which can compromise the website and the details of those who have interacted with it.

While initial reports were confirmed by MyEtherWallet, panic only started to properly set in with the emergence of a post on Reddit. According to the user affected, who was confronted with an error when logging on to the site, his gut feeling was that something was amiss.

“Even though every part of my body told me not to try and log in, I did. As soon as I logged in, there was a countdown for about 10 seconds and A tx was made sending the available money I had on the wallet to another wallet.”

According to third party services, the wallet address linked to the scam has already conducted some 180 scam transactions, totalling as many as 215 ETH worth over $134,000 based on current trading prices. After several hours, MyEtherWallet announced that “everything is now back to normal.”

In a statement on Reddit, the MyEtherWallet team said the attack was not due to a lack of security on the platform, but “hackers finding vulnerabilities in public facing DNS servers.”

“This redirecting of DNS servers is a decade-old hacking technique that aims to undermine the Internet’s routing system. It can happen to any organization, including large banks,” the statement read.

According to analysts at rival firm MyCrypto, the only way to protect against this type of hack is to use a hardware wallet, or to run this type of platform in the offline environment, thus preventing the risk of a DNS hijack.

“Lots of anti-phishing folks in the community and on our team are attempting to collect information about what happened to MEW, as well as attempting to get in touch with their team to assist in any way we can. Moral of the story: use a hardware wallet or run offline,” MyCrypto tweeted.

The news will be concerning for any user of the MyEtherWallet service, with those who have logged in over the last couple of days at the most significant risk of being compromised.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
Arrests made in $13M Chinese crypto pyramid scam

Arrests made in $13M Chinese crypto pyramid scam

Authorities in China have arrested four people in the city of Xi’an in connection with a suspected cryptocurrency pyramid scam, according to local media reports.

The arrests were made over allegations that the scheme had conned some 13,000 individuals, with a total of over 86 million yen ($13 million) reported to have been collected. Police arrested a primary suspect, along with three others suspected of assisting in the scheme.

The suspect, known only at this stage as Zheng, is said to have begun planning the scam back in October 2017. Police suspect the scam revolved around the Da Tang Coin (DTC), an altcoin linked to a company called DTC Holding.

Investigators said the scheme involved offering investors a guaranteed return of approximately $13,000 per day, in return for an investment of $480,000 in DTC—which were offered at $0.50 per coin.

The scam allegedly attracted significant volumes of investment in the space of just two weeks, from March 15-28, with the company reaching out to investors in locations including Xi’an, Ningbo and Phnom Penh.

It is also alleged that the firm secured the services of a ‘foreign-looking’ man in order to create the appearance of an international blockchain startup that is heavily backed by other investors.

Investors were promised a return on their money when DTC was ultimately listed on major cryptocurrency exchanges, and were told of a range of real-life applications for the token, including in retail and education.

While labelled a pyramid scheme by investigating officers, some analysts have highlighted that the plan more closely resembles a Ponzi scam. Either way, officers believe the men to have been involved in the latest cryptocurrency scam to target unsuspecting investors.

In 2017 alone, China reported some 47,000 victims of cryptocurrency scams, like the alleged scam in the present case. Around 40 arrests have been made to date, leading to the Ministry of Public Security promising to ‘purify cyberspace’ to protect victims.

The pledge comes in light of a wider crackdown in China, with authorities keen to prevent scams of this kind from taking hold. The arrests this week will do little to dampen the appetite of regulators in keeping a tight grip on cryptocurrency activities in China.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.