ICO Crowd - Issue #11

www.icocrowd.com

ISSUE #11, April-May 2019

Resistance Redefines the DEX Experience FEATURING : BOLT TICKETMASTER OXFAM AND MANY MORE...

Price: 0.01 BTC

FOREWORD

ISMAIL MALIK Editor-in-chief DONOVAN OBOSI Head Analyst ANNEMIEKE DIRKES Managing Editor PAM TATRO Content Editor TZVI SHISHLER Marketing Photo credit Š Shutterstock

If you would like to advertise with us or have any other queries please get in touch at info@icocrowd.com Disclaimer. All opinions and views expressed in this publication are those of the author only and do not necessarily represent the views of ICO Crowd magazine, its Management or Advisors. All content of ICO Crowd Magazine, in particular but not exclusively, photographs, businessdetails, facts and figures, names, adresses and dates, historic details and offers, are the sole responsibility of the author of each artice. Copyright violations by the author are the sole responsibility of the author and ICO Crowd magazine can not be held liable, whether on the whole or on particulars. www.icocrowd.com

by ISMAIL MALIK Chairman & Executive Editor ICO Crowd

What came to be known as the crypto winter quickly turned into a crypto ice age. Concerns abounded in early 2019 that this could be an extinction level event. Actions by the Securities and Exchange commission put water on the fire that was the great ICO fest that reached fever pitch in early 2018. Whilst the hashwars of last year caused so much collateral damage we saw the total crypto market cap drop to around $100 billion dollars.

In spite of the continuing troubles in the crypto market the industry has proven itself to be adaptive and resilient. Talk is now turning to a crypto spring. Projects are adapting to a new world, one with much more clearly defined boundaries between utility and security tokens. STO startups are growing exponentially and the market overall is up 50% from its January low. At the time of writing bitcoin is trading just over $5000 USD. Several significant alt-coins have shown Recent developments with the Securities significant returns in 2019 alone including and Exchange Commission has not helped BNB (209%) and EOS (186%) the crypto market, in November two crypto startups were compelled to register their Bakkt, from the Intercontinental Exchange token sales as securities offerings. This was remains on the sideline for regulatory the first time the SEC has pursued such an approval for their physical bitcoin future action without additional charges of fraud. project whilst the SEC continually rejects one The wording of the orders suggested that Bitcoin ETF proposition after another. around 95% of all tokens may eventually be subject to such regulation as the Howey test In the long term, these discouraging and is applied to crypto startups. More recently seemingly catastrophic developments will be they charged Gladius Network with selling looked back upon as mere teething problems. unregistered securities after the company Crypto is a sector known for its innovative self-reported to the commission. solutions and new startups will start to appear that are compliant with SEC rules.

In January, the SEC released an official 2018 may have seen the death of the ICO but statement stating that cryptocurrencies are 2019 will see the rise of the Security Token one of the commission’s top examination Offering and all eyes will remain on Bakkt as priorities this year. In the same month, the world of crypto looks desperately for some however, news broke that 2018 witnessed more good news and signs that the crypto ice a significant uptick in the number of ICOs age is behind us. authorized by the SEC to sell unregistered securities to large-scale investors, in what it refers to as an exemption.

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CONTENTS 4 5 6 10 16 18 20 22 24 28 30 32 34 38

Advisory Board Contributing Writers Resistance Reimagines the DEX Experience BOLT. Excitement Led the Next Billion to Join Crypto via the Love of Cricket An Overview of Blockchain Privacy Mechanisms BLABBER — A Social Network for the Crypto Community Could Blockchain Have Prevented the Chinese Chip Scandal // GARY WALKER Ticketmaster Invests in Blockchain

The IMF Weighs In on Crypto Taking Crypto Off-grid

Stellar and Lumens

How Bitcoin Mining Can Help Nuclear Reactors Governments and Privacy Coins G4S To Provide Secure Crypto Storage

40 42 44 46 49 50 52 54 56 58 62 64 66 68 70 72 76 78 80 82 84

Christie’s Experiments with Blockchain Bitcoin Backed Ethereum Bionic Amy of Sagewise Launches Private Beta Version of Blokusign Crypto Exchanges for Beginners Fake Goods and Blockchain Airdrops Are New Stablecoins Stealing Tethers Crown?

Bitcoin Jobs up by 300% Crypto Mergers and Acquisitions Does EOS Have a Cartel?

Oxfam to Offer Crypto Microinsurance Potential Catalysts for the Crypto Market Sony’s Hardware Wallet Johnny Depp Collaborates with Crypto Start Up TaTaTu UK Govt Task Force Proposes Regulatory Changes Vitalik Buterin and The Birth of Ethereum Who is Satoshi Nakamoto?

An Introduction to the Stellar Lumens Community A Crypto Smart City Blockchain to Disrupt Advertising Fidelity and Professional Advisory Firms Impact on Crypto

86 88 90 92 94 96 98

Are Hybrid Dex’s the Solution to Low dApp Adoption?

Morgan Stanley Calls Crypto an Institutional Asset Class Stellar vs Ripple

To Boldly Go Where No Blockchain Has Gone Before Who is Jed McCaleb?

Are Institutional Investors Coming to Crypto?

Would Crypto Benefit From a Global Recession?

ADVISORY BOARD SUSAN POOLE

MARC KENIGSBERG

SIMON COCKING

Founder, BlockBridge Advisory Co-Founder, Blockchain Training Institute

Founder of BitcoinChaser.com

Senior Editor at Irish Tech News Freelance for Sunday Business Post, Irish Times, The Southern Star, Dublin Glob

ANDREY GOLUB, PhD

SEAD MUFTIC

SERGIO A. FERNANDEZ DE CORDOVA

Entrepreneur, CEO & Founder @ELSE Corp- a Virtual Retail company

CEO at Blockchain Information Exchange Security Corp

Chairman – P3SmartCity Partners, Inc Private Sector Advisory Group, SDG-FUND, United Nations

THEODOSIS MOUROUZIS, PhD

MUKHTAR MUSSABETOV

EMMANUEL R. GOFFI, PhD

Program Director of MSc in Business Intelligence and Data Analytics at Cyprus International Institute of Management (CIIM) Research Fellow at UCL Centre of Blockchain Technologies (London,UK)

Blockchain Entrepreneur, Founder at BlockSpace Labs

Associate doctor with Science Po-CERI Research fellow with the Centre FrancoPaix, at the Université du Québec à Montréal

ALEX LIGHTMAN

DANIEL STEEVES

AVI LEVI

Award-winning and Amazon bestselling author.

Canadian-born, German-based consultant and entrepreneur, Strategist, Steeves Solutions

ICO Crowd North America

CONTRIBUTING WRITERS HEAD WRITER

Garry WALKER Garry is an IT professional with a background in both hardware and software. He has worked in FinTech for 18 years, moving ever increasingly into crypto and apps whilst remaining a struggling artist.

CONTRIBUTING WRITER

Marianne LEHNIS Marianne Lehnis is a writer and video journalist specialising in entrepreneurship, startups, climate finance, disruptive and blockchain technology with a focus on its impact on the wider world.

She sources interviews and provides analysis of industry insights and trends for titles including BBC Technology of Business, Startup Magazine, and the Powerlist. Her background is in global B2B and finance reporting and local news video journalism.

CONTRIBUTING WRITER

Michiel MULDERS Michiel is a Blockchain Developer at TheLedger and an avid Writer. His interests are IT security, decentralisation, BigchainDB, Hyperledger Fabric, Stellar and Ethereum.

APRIL-MAY 2019

Resistance Reimagines the DEX Experience The rise of the distributed exchange has long been predicted by a wide range of leading industry figures. Changpeng Zhao, CEO of Binance has been quoted as saying: “I believe that decentralized exchanges are the future. I don’t know when that future will come. But we’ve got to be ready for it.”

However, not all exchanges nor DEX's are created equal. When using cryptocurrency trading platforms users can face many issues from complicated interfaces and slow transaction speeds to a lack of privacy, security, and freedom. by ICO CROWD

Currently, the vast majority of trading occurs on centralized exchanges such as Binance and Coinbase. Users must rely on trusted third parties, escrow services and derivatives which makes it almost impossible to trade privately. The centralized nature of these platforms exposes users to serious security risks too. It only takes a single breach to jeopardize the assets of all users on these exchanges.

Decentralized exchanges are now challenging the hegemony of the centralized behemoths by allowing users to retain their own private keys and, in turn, ownership of any crypto assets held on the exchange. However, the first-generation of DEX's have been

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plagued by issues. They are often slow, indirect, only moderately secure, and offer very little support for users concerned about privacy.

INTRODUCING RESISTANCE Winner of best ICO at the 2019 World Economic Forum in Davos, Resistance is a decentralized exchange, ResDEX, driven and supported by its privacy-oriented blockchain which uses the Resistance privacy coin, RES, as an intermediary to facilitate private trading.

ResDEX is a distributed exchange unlike any other. It is the first DEX designed with a privacy-orientated blockchain powered by a democratic and easily accessible mining operation which utilizes multiple reward mechanisms.

Created by a team of experienced developers with a background in cybersecurity, the Resistance core team includes the founder and core developer behind the Linux operating system Whonix, as well as the founder of Openwall, who is also responsible for creating the hashing algorithm yescrypt, and the newly released yespower CPU-optimized hashing algorithm, which is used by Resistance. Ivan Liljeqvist (AKA Ivan on Tech), is onboard as an advisor. Also on board is David Kravitz, a cryptographic mastermind with 35 years of experience in the sector, Vice President of Crypto Systems Research at DarkMatter, former IBM researcher, key contrib-

utor to the Linux Foundation Hyperledger Project, and inventor of the Digital Signature Algorithm (DSA).

A WIDE APPEAL Resistance appeals to a wide community because it incorporates the best aspects of many different blockchain technologies. The simplicity of the Resistance Desktop Application ensures Resistance is not limited only to advanced users and can be easily adopted by the masses without sacrificing usability.

Their focus on privacy and anonymity attracts individuals that are passionate about the ongoing : development of blockchain technology. Anyone, anywhere in the world, regardless of skill level, can use ResDEX and it’s not even necessary to have a bank account.

ResDEX makes use of atomic swaps which enable fast, direct and private trades without the need for a trusted third party. ResDex and its accompanying blockchain facilitates privacy through the use of its native RES coin which acts as an intermediary and validates transactions using zero-knowledge proofs.

Utilizing Resistance InstantSwap enables you to perform trades on ResDEX in under a minute. Normally a ResDEX trade requires both sides to wait for confirmations on the underlying blockchains that the trades occur on. The

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amount of time can vary significantly with a Bitcoin transaction taking on average 10 minutes to confirm.

ResDEX InstantSwap negates the need to wait. This is achieved by allowing users to deposit RES coins into a timelocked contract for a certain period, this decentralized collateral is locked in Resistance masternodes. The funds remain inaccessible until the timelock is released. Whilst the RES coins are locked in the user is able to trade amounts less than the equivalent market value of the deposits immediately.

This dramatically increases the speed at which trades can be completed on ResDEX without compromising security, because there is no need to wait for block confirmations.

ally Identifiable Information (PII) by using private transactions. The EU’s General Data Protection Regulation (GDPR) and the California Consumer Privacy Acts are now in effect and cryptocurrency exchanges and blockchains are under pressure to uphold each individual’s right to alter or delete their own personal information. Resistance was built with a fundamental principle of the GDPR in mind: the user’s ability to control their PII. Users are therefore free to decide if any PII is to be used on the blockchain.

The Resistance team has already been granted developer access to the Ledger Nano DEMOCRATIC MINING S, the world’s The Resistance CPU-optimized miner makes it easy for anyone with a standmost popular ard laptop or desktop computer runhardware ning MacOS, Windows or Linux, to wallet, by the mine on the Resistance blockchain. company’s Block rewards and transaction fees are The Resistance team has already been split between masternodes, supporting founders and a granted developer access to the Ledger further project developments, Proof of limited edition Nano S, the world’s most popular hard- Work mining, and Proof of Research Resistance ware wallet, by the company’s founders on whitelisted BOINC projects that adand a limited edition Resistance vervance scientific research for the benefit version of the wallet is now sion of the wallet is now available. This of humanity. integration will give users the option to available. transfer funds from ResDEX into one of the most secure and easy to use multi-currency hardware wallets available today.

As with Bitcoin and Litecoin, the Resistance blockchain is built upon a fast cryptographic hash for performance.

The Resistance blockchain also utilizes yespower as a separate Proof of Unlike most public blockchains, including Work hash, similar to how Litecoin uses Bitcoin and Ethereum, that store publicscrypt. Yespower is based on scrypt ly visible personal data on an immutable and the newer yescrypt. The blockchain and distributed ledger, Resistance gives is specifically designed for CPU minusers the option to shield their Personing and favors the standard CPUs you’ll

find in regular laptop and desktop computers and offers no benefit to FPGAs or ASICs. This means that anyone can mine on the Resistance blockchain without the need for the high-spec mining rigs required to mine on other blockchains such as Bitcoin, Ethereum, and many other cryptocurrencies.

If someone did decide to build an ASIC for Resistance, the gains in efficiency would be orders of magnitude smaller than an ASIC built for coins that are not CPU-optimized. This makes mining fairer.

ResDEX has low fees and the typical 0.15% exchange fee is paid for by the taker. A proportion of these fees are used to support and develop the platform further.

Currently, ResDEX has a functional wallet, testnet and a one-way Simplex fiat gateway confirmed allowing users to buy Bitcoin on ResDEX using VISA or Mastercard in USD, GBP, and EUR. In addition, ResDEX has dedicated market makers who help ensure liquidity stays high on the exchange and lets users perform trades quickly at competitive prices. Anyone can become a market maker on ResDEX and provide liquidity to the market. Resistance has dedicated a lot of time and resources to developing the REST API that makes this possible. As an added bonus, makers don’t pay fees on ResDEX. 7

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MASTERNODES Unlike regular nodes, masternodes do not participate in mining. Instead, they perform vital services and, as a result, receive a significant percentage of the block reward. On the Resistance platform, masternodes will play a pivotal role in ensuring the security and fluidity of the decentralized exchange. Masternodes will speed up the Resistance network. Each masternode will host a full copy of the Resistance blockchain and help achieve consensus quickly and efficiently. Furthermore, masternodes enhance security on the blockchain by helping to deter individuals who set out to falsify transactions. Masternodes stabilize the Resistance network, and the more of them there are, the more stable it becomes. That’s why they receive such a large portion of the block reward as an incentive - 30% of every block reward.

Right now, Resistance masternodes fulfill a number of key roles including: 1. Incentivizing people to run full nodes on the Resistance network 2. Incentivizing users to hold on to their RES thus stabilizing the currency 3. Holding the collateral used in InstantSwaps 8

4. Voting on governance issues after ownership of the Resistance platform has been decentralized It is crucial that many Resistance users run full nodes that contain the entire current Resistance blockchain. As Resistance grows and mining becomes more competitive, many users will choose to join mining pools rather than mine Resistance directly. When users start mining in pools rather than on their own full nodes, the number of full nodes on the network decreases. This pushes the network towards centralization, which is a threat to blockchains that solely rely on Proof of Work.

It is also essential that the Resistance cryptocurrency maintains a stable and accurate value, and that it isn’t used by wealthy individuals to “pump and dump” the Resistance coin supply.

“Pumping and dumping” is the process by which perpetrators acquire a large number of coins at a low price, then artificially increase the value of that coin to create hype and, in turn, drive up prices.

When other potential buyers see these huge price spikes, they are en-

The community can use the masternode framework to add support for additional functionality, such as governance (voting), real-time double spend protection, and platform development.

couraged to purchase coins. At that point, the perpetrators “dump” their coins for a huge profit and the price tumbles. To help mitigate this issue, and to control the stability of the coin, Resistance masternodes are required to hold a certain number of RES at all times to maintain masternode status. This helps motivate users to hold on to their coins instead of trading or selling them. By supporting masternodes, Resistance is laying the foundation for future improvements to the network. Further down the line, ownership of Resistance will be decentralized and handed over to the Resistance community.

The community can use the masternode framework to add support for additional functionality, such as governance (voting), real-time double spend protection, and platform development. Prior to this, as mentioned, masternodes will also play a crucial role in InstantSwaps, by holding the collateral used to execute these lightning fast peer-to-peer trades.

10,000 RES is the expected minimum stake required to be rewarded for running a masternode. Investors will have the opportunity to receive

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proportionally greater rewards (approximately) for larger stakes by running multiple nodes and/or, possibly, larger node types. When active, nodes provide services to clients on the Resistance network and, in return, are paid for their efforts.

As this rewards program operates on a fixed percentage, and the number of masternodes will fluctuate, expected rewards will vary according to the current total number of masternodes in operation.

PROOF OF RESEARCH Reward splitting is a key feature of the Resistance consensus algorithm. In addition to Proof of Work and masternodes, participants can allocate their computing power to Proof of Research for block rewards. When enabled, users contribute computer time to Resistance’s whitelisted BOINC projects.

This allows users to receive a percentage of the block reward whilst making a positive contribution to humanity. The share of block rewards allocated to Proof of Research are split between the members of the Proof of Research Resistance Pool (respool). The more computational power an individual contributes, the greater the share of the block rewards they receive. As the block reward split is 30% to miners and 30% to researchers there is an incentive to perform both these actions. Users can also specify that they wish to partake in the option that has the fewest participants. This should ensure an even distribution of miners and researchers.

BOINC is the world’s largest and most powerful distributed computer network. They host a wide range of research projects helping solve problems in astrophysics, medicine, climate change, humanitarian causes and more. Resistance’s whitelisted projects will focus on causes such as cancer and

Alzheimer’s research, nanotechnology, clean water technology, molecular biology, and solar power.

TACKLING LIQUIDITY Resistance recently confirmed a partnership deal with Huobi, the world's leading blockchain company with an accumulative turnover in excess of U.S. $1 trillion.

The deal will ensure liquidity on ResDEX and allow for fast and reliable trading. In turn, the partnership opens new possibilities for Huobi by giving the organization access to new markets.

The partnership will eventually give the Resistance exchange access to over 150 cryptocurrencies and 350 trading pairs.

Initially, the digital asset pairs available will include Bitcoin, Ethereum, and the USD-pegged stablecoin Tether with more coins added as soon as they are included on the Huobi platform.

Poor liquidity has been the weak link for most of the DEX platforms currently operating. With slow adoption, many first-generation DEXs have struggled to achieve the levels of liquidity required.

Low liquidity can also lead to issues like price slippage, where the value of a currency changes over the period of time it takes to complete a trade; unfair or uncompetitive pricing; instability; slow transaction speeds; and more.

Resistance has already secured a number of other important partnerships too. As well liquidity on the exchange provided by Huobi and hardware wallet support from Ledger, market making is facilitated by GSR, and TLDR is responsible for assisting and mentoring the core team.

PRIVACY FOCUS When a user wants to initiate a trade on ResDEX, they open the ResDEX interface in the Resistance Desktop Ap-

Resistance is in the closing stages of its Private Sale.

The platform’s Initial Exchange Offering (IEO), a process similar to an ICO but conducted through an exchange, will begin as soon as the Private Sale has ended.

plication and enable the coins they are interested in trading. The user can then deposit coins into a special exchange address derived from their exchange secret seed phrase that only they know.

This address is specific to the coin they are trading and each coin has its own unique derived address.

A useful additional feature is that users can add privacy to almost any cryptocurrency, including Bitcoin, even if that currency doesn’t support private transactions natively. Through the use of the Resistance privacy-oriented blockchain, users can enable the privacy feature at the click of a button. ResDEX will then automatically trade the coin of your choice to RES and send RES in place of the original currency, thereby adding a layer of privacy to the trade.

Bitcoin cannot be considered truly fungible as it does not provide users with sufficient privacy and anonymity. The transaction history of every Bitcoin is publicly available on the blockchain for anyone to scrutinize. Older coins may be associated with illegal or unethical transactions and effectively become devalued in comparison to a new coin with a fresh ledger. Centralized exchanges like Coinbase, for example, have been known to block funds based on the coins’ previous transactions. With zk-SNARKs, a form of zero-knowledge proof used to facilitate private transactions on the Resistance blockchain, it’s possible for RES coins to have no public record or history. If users choose to send a coin through a private transaction, its history is completely obfuscated.

THE TOKEN SALE Resistance is in the closing stages of its Private Sale. The platform's Initial Exchange Offering (IEO), a process similar to an ICO but conducted through an exchange, will begin as soon as the Private Sale has ended.

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APRIL-MAY 2019

BOLT Excitement Led the Next Billion to Join Crypto via the Love of Cricket BOLT describes itself as “a mobile-only entertainment service for the next billion people.�

They offer Live TV channels, Videos, and Games which users can either stream in-browser or download on Android. The Team is also developing its iOS offering. The latter application has been placed on the development roadmap for a Phase 2 release. 99% of their by ICO CROWD current and future base of users are primarily Browser or Android users as they are not able to afford iOS devices.

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Their aim is to optimize their services for emerging markets where the needs of viewers are often different to those in developed markets, which existing social media video content platforms such as YouTube are optimized for. High bandwidth usage makes existing services ineffective or at least expensive where network infrastructure is poor and does not necessarily support 4G and 5G communications. However, users in 4G and 5G areas also benefit as the BOLT service utilizes less bandwidth to stream hence resulting in savings.

BOLT aims to decentralize its mobile entertainment service in contrast to the business models of entertainment giants that collect your data and sell it to advertisers, thus making the user the product.

BOLT also mobilizes its community to self-censor and moderate, allowing for community determined standards in a way that other models do not. A community rating feature will be introduced to allow the BOLT Community to rate content that is being published on the BOLT Platform.

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The BOLT team are creating a service to serve its users, not to profit from them.

When profits are made by the BOLT system, they are retained within the Bolt ecosystem thus adding to the value of the BOLT tokens in circulation. Currently, BOLT has over 30 people across 4 offices, hailing from some of the largest companies in the world.

Through their vast advertising revenues, Silicon Valley oligarchs such as Facebook and Google clearly demonstrate the value of the data their users provide, and the significant profits clearly show that the value of user data is actually far greater than the value of the services they provide.

Social Media giants have also demonstrated time and time again that they cannot even be trusted with user data. Problems include huge data policy breaches; fake news is prevalent, and accusations of political interference is common.

BOLT already has an existing mobile video model with a significant user base that is growing. Their Android app has already been downloaded over one hundred thousand times in just over 2 months. They have managed to partner with a range of telco and content

providers. Their content platform is already centred on delivering live video (e.g. Live TV, Live Sports) and Trendy video highlights (less than 5 minutes per clip) to users worldwide.

Most of BOLTS existing users and its target demographic are in the developing world which has recently seen mass adoption of mobile telephones. What has not been as forthcoming for their users are traditional banking facilities.

Most of BOLTS existing users and its target demographic are in the developing THE UNBANKED world which has Citizens of the developed world take recently seen their bank accounts for granted. They can generally be assured that their mon- mass adoption ey is always secure, and a cash machine of mobile is never too far away. However, for vast telephones. swathes of the world, this is a luxury that they are not afforded. It is estimated some 1.7 billion adults worldwide still do not have access to a bank account.

The situation has improved somewhat in the last 10 years. According to data released by the world bank 1.2 billion people have gained access to proper banking since 2011 with over half a billion in the last three years alone.

Besides the immediate advantages of not having to store your wealth in your home, a bank account allows people to connect to the formal financial system

and helps them make day to day living significantly less complicated. With a bank account, it is much easier to accumulate wealth and people find it easier to build up their assets rather than living hand to mouth.

The situation is at its worst in developing countries with particularly large amounts of unbanked in both Africa and Asia.

After China (with 224 million inhabitants who lack a bank account) the next most affected country is India. It is estimated around 190 million of India’s citizens do not have access to a bank account. Next in Line is Pakistan with around 100 million unbanked individuals.

THE CRICKET PROPOSITION Cricket has been around for centuries, since the 1500s. With 104 nations as official members of the International Cricket Council. Cricket is the world’s second most popular sport. By some estimates, there are over two billion fans globally.

Most of these fans are based in southeast Asia although the game itself has a global reach from India to the West Indies.

Cricket is the most profitable in India. The Indian Premier League, or IPL, whilst relatively new has already gen11

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erated more money from sponsorships than Major League Baseball. It’s only in its eleventh season and according to advertising media company GroupM, the IPL made $1 billion in sponsorship money in 2017. Compare that to the $892 million the MLB made in sponsorships in 2017, according to IEG, a sponsorship evaluation firm and you can see that cricket is big business.

er to watch and for more matches to be played. Globally hundreds of millions of viewers watch this new version of the classic game.

adopt the streamlined Twenty20 version of the game. These games last up to three hours making them much easi-

this is an increase of over three times in real terms. The sport has become more lucrative and not just because of bet-

Twenty20s greatest contribution to the sport is that it has helped cricket become much more popular. The IPL and Big Bash, both in its men and women's tournaments have brought ever-increasing audience numbers. It has proven spectacularly popular in the Caribbean Premier League, The Pakistan Super League and in developed nations such as England where last year’s Twenty20 Blast achieved an audience of over 900,000.

Zilliqa’s ability to process high volumes of transactions The greatest single transformation of will be crucial modern times in cricket was Twenty20. to BOLT’s plans The format was alive and well in the to acquire and 1990s but restricted to the likes of club retain users greens and school games. Traditionally cricket matches were test matches especially for and they can go on for days. The longhigh velocity est ever cricket match lasted ten days The value of the ICC's commercial and events such as between England and South Africa in broadcasting rights from 1999-2007 1939. was a mere US$550 million; the current the ICC T20 rights cycle, which runs from 2015-23, Cricket World Leagues such as the IPL have chosen to is expected to reach $2.5-2.6 billion, Cup

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ter marketing and negotiating. Fundamentally, cricket has become more lucrative because many more people want to watch it, and this is mostly thanks to Twenty20.

Globally, viewers watched an impressive 5.2 billion hours of the 2017 Champions Trophy. This compares to 3.2 billion hours in 2013. The Women's World Cup has also had some very impressive viewing figures. Back in 2005, the ICC took over the running of international female cricket and at the time not a single ball of Women’s World Cup cricket was televised live. By the time Anya Shrubsole bowled England’s women's team to their impressive victory in the World Cup final this year, the match had over 140 million unique viewers globally. This is over three and a half times the entire unique viewers of the 2013 Women’s World Cup. Three of the countries in which cricket is the most popular are India, Pakistan

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BOLT to facilitate transfers from fiat currency to BOLT. Switcheo’s founders are both advisors to BOLT and are spearheading the initiative to seamlessly integrate Switcheo and BOLT. BOLT will be built on the Zilliqa protocol. The Zilliqa main net is on track for launch shortly. The BOLT Team have been working very closely with Zilliqa management and development teams to ensure that BOLT is on track to completing development on Zilliqa. Announcements are to follow.

Zilliqa’s ability to process high volumes of transactions will be crucial to BOLT’s plans to acquire and retain users especially for high velocity events such as the ICC T20 Cricket World Cup and weekly football league and championship match highlights.

BOLT already has an existing network of content, technology, distribution and telco partners. Already providing content to over three million users across Asia and Africa.

Flagship entertainment partners include Aljazeera, Rakuten VIKI, Citizen Television, Channel News Asia, AFP, The Discovery Channel, The International Cricket Council, and Global Football Highlights; and even more premium content to come. and Bangladesh. Interestingly these three countries also contain an incredibly high percentage of the world’s unbanked.

Bolt has come to a deal with the International Cricket Committee (ICC) to license the viewing rights to the T20 2019 World Cup. The rights extend to most of Southeast East Asia and further territories are in negotiation. Using bespoke technology to dramatically reduce the bandwidth used to broadcast these matches BOLT aims to create an easy and affordable way for those with access to a mobile phone to watch the cricket that so many love.

BOLT crypto wallet and the BOLT Token to watch. The build-up has already commenced through BOLT’s soon to be launched “cricket community outreach programme.”

BOLT is also looking to do the same as with cricket for its football properties, that is where it provides “near live” 3D highlights for league and championship matches.

BOLT will be built on the Zilliqa protocol.

The Zilliqa main net is EXISTING PARTNERSHIPS on track for BOLT has partnered with Oxademy, an launch shortly. online business service from Oxford The BOLT who are developing educational courses for them. Oxademy’s platform iden- Team have tifies learners’ strengths and weakness- been working es to generate a bespoke learning path very closely Globally they will be also showing high- based on their behaviour. Users who with Zilliqa lights of the cricket game in their com- successfully complete educational vidmanagement pletely 3D format. eo content courses will be issued with certificates validated via BOLTS smart and BOLT aims to facilitate the first ever contracts. The educational content will development sporting event to be carried out entire- play a role in uplifting communities in teams to ensure ly on the blockchain. Viewers intending a way that is both portable and conthat BOLT to watch the T20 2019 World Cup will venient. need BOLT Tokens to watch the event. is on track to In fact, BOLT will be using the “FOMO” BOLT has also partnered with the completing of this huge sporting festival next year Switcheo Network, the first muldevelopment on as a means to sign up large numbers ti-blockchain decentralized exchange Zilliqa. of cricket fans (BOLT is targeting to (DEX). Switcheo is a no-frills DEX that sign up 10% of the global cricket fan base through this acquisition strategy). These users will be issued with the

will allow a one-click login via private key or ledger device. It has a user-friendly interface and will allow

BOLTS flagship telco partners include Smartfren who have 18 million subscribers in Indonesia, Digi who have 11.5 million subscribers in Malaysia, Safaricom of who have 32 million subscribers in Kenya and Maxis who have 8 million subscribers in Malaysia. BOLT is also completing its tie-up with Bkash, Bangladesh’s largest mobile wallet company, that has more than 30 million active users.

THE BOLT PLATFORM & TOKEN Tokens will initially be issued via the Ethereum platform as ERC-20 compliant tokens. They will eventually be ported to Zilliqa once the main net is up and running. Benefits of using Zilliqa come from its ability to process thousands of transactions per second. This contrasts with the 7 to 10 achieved on Ethereum. Zilliqa recently raised $22 million US dollars in its token generation event.

Users can use both tokens and fiat as payment options although token users will be able to take advantage of discounts when using them for payment.

BOLT token holders will also be rewarded with premium content such as the previously mentioned cricket content and data bundle boosters from 10 MB upwards.

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By providing access to high-velocidevelopment of BOLT. It will also ty sporting moments on a mass scale, spearhead the marketing and comBOLT will drive demand for their tomunity engagement and support ken. Tokens will also be made available for BOLT’s future development. The as rewards for completing tasks withvesting period is going to be 3 years in the BOLT ecosystem, some will be with 33.33% vesting every year on a awarded for signing up and they can be quarterly basis. traded with other trading pairs on ex• 20% (200,000,000 BOLT Tokens) changes where the BOLT token is listed.

Strategic & Content Partners; • 20% (200,000,000 BOLT Tokens) When BOLT Token holders use BOLT The BOLT team is responsible for Tokens to pay for fees, they will receive the initial vision, design, implemena significant discount. In the first year, tation, and rollout of BOLT. The this will be 50% and it will taper down vesting period is going to be 3 years to no discount in year 5. with 33.33% vesting every year on a quarterly basis.

To add further value to the BOLT token • 5% (50,000,000 BOLT Tokens) will they will use 20 percent of their profits be allocated as rewards for BOLT to buy back BOLT tokens and destroy Community Contributors them. This process will continue until 40 percent of the tokens have been The use of funds: bought back.

• 45% - Market expansion and user acquisition • There will be 400,000,000 tokens • 15% - Development and delivery of available at their private token genservice enhancements and ecosyseration event at which 1 BOLT = tem building USD 0.03. The total supply of to• 20% - Ongoing company operating kens will be limited to 1 billion toexpenses kens.

• 10% - Legal and consulting services • 40% (400,000,000 BOLT Tokens) • 10% - Reserves will be allocated to the Token Generation Event; The Roadmap • 15% (150,000,000 BOLT Tokens) BOLTS roadmap is laid out into three will be distributed to BOLT Reclear sections. search. BOLT Research as a separate entity will lead future research and Phase one (Test-net: Q1 2019 Main14

BOLT token holders will also be rewarded with premium content such as the previously mentioned cricket content and data bundle boosters from 10 MB upwards.

net: Q2 2019) is to produce a globally scalable system for fast, secure access to entertainment. Powered by Zilliqa.

With tokens also providing additional utility by giving discounts when used, compared to fiat gateways. 20% of BOLT profits is burnt (in tokens) per year, similar to the Binance model for the BNB token.

Phase two (Q1 2019) will occur when BOLT tokens are bundled with data plans with telcos for mainstream adoption. Users can use their tokens to purchase data bundles globally.

Phase three (Q3-Q4 2019) will occur when BOLT achieves a thriving network of telcos and content partners around the world, including emerging markets like Bangladesh, Kenya, Malaysia, with more users added as the network scales with additional partners You can find more about BOLT here: https://bolt-token.global and here: https://www.bolt.global/.

APRIL-MAY 2019

An Overview of Blockchain Privacy Mechanisms Bitcoin has been founded from the need for a decentralized monetary system where the power can be shifted from big, centralized banks and the government to the people. Empowering the people will bring us a free and transparent financial system backed by cryptography.

by ICO CROWD

Nodes are incentivized to act honestly by rewarding them with Enigma tokens upon correctly verifying data. To However, privacy is still an issue when increase the safety of the nodes who speaking about Bitcoin as it’s a public and open ledger that allows everyone to perform the computations, they are required to stake Engima tokens. Whensee all your incoming transactions and ever a node cheats or sends incorexpenses. Let’s take a look at the most rect information, it will lose part of its innovative privacy solutions we can staked tokens. find in the blockchain space.

ENIGMA SECRET CONTRACTS Enigma is building a general protocol that allows for privacy to be maintained when interacting with smart contracts.

In short, Enigma consists of a decentralized supercomputer ran by multiple nodes which is capable of running private computations. The nodes are in return rewarded with Enigma tokens.

For example, the data contained by a particular smart contract on the

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Ethereum network can be encrypted and send to the Engima network. The nodes running the so-called supercomputer are in charge of running computations on the encrypted data to verify the validity of the transaction without compromising security.

The benefit of this approach is that any blockchain that supports the Enigma protocol can provide an extra layer of security for its smart contracts.

actual amount being transacted. However, the concept of ZKP can also be applied to hiding someone’s age or gender.

In short, a Zero-Knowledge Proof is a cryptographic process in which someone is able to prove he knows something like the number of tokens being transacted without actually revealing this amount.

It is based on a game in which the verifier can ask questions in order to reduce the chance the prover is lying. By asking the same question, the verifier is able to reduce the chance that the prover is lying from 50%, using simple A or B questions, to less than 0.00001%.

It is an interesting concept to imply privacy, however, these so-called questions ask a lot of computational power and time to be completed. Added to that, a slightly custom algorithm is each time needed depending on what you want to proof (like age).

ZERO-KNOWLEDGE PROOFS Zero-Knowledge Proofs (ZKP) add a considerable layer of privacy to public blockchains. It is foremost intended to hide the transaction history for a specific acDANDELION PROTOCOL count. With ZKP, nodes are capable of Even in an anonymized network, it verifying a transaction without seeing the is possible to figure out step by step

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where transactions are coming from, compromising a user’s identity. It is possible to operate ‘a spy node’ that would involve noting all transaction details over time that pass the node.

Using this information, the node can gradually build up a picture of where coins were located in obscured networks.

How are the miners able to verify the transaction? Third party observers like miners won’t be able to decrypt the transacted amount. However, a Pedersen commitment is part of the RingCT concept.

For the Bitcoin network, it is even possible to analyze the timing of each block being broadcasted and trace back with high probability a transaction’s source node. From here, the spy The Pedersen commitment is some node has high odds of gleaning the IP cryptographic range proof that is addaddress of the transaction sender. ed to the transaction. Miners are able to use the range proof to compute if the Therefore, Dandelion works by sending transacted output is greater than zero transactions on a random path through and smaller than a random number. the network, ‘diffusing’ the transaction It is a complex mathematical compudata across the network. This would tation that allows miners to verify the make it nearly impossible to follow the transaction. breadcrumb trail.

In short, a range proof proves that the RING CONFIDENTIAL encrypted amount must have been creTRANSACTIONS (RINGCT) ated out of the addition of a series of Monero implemented the concept of positive powers of 2, without disclosRingCT as a privacy feature into their ing what the actual powers of 2 are. If protocol. Using RingCT, users can obthe sum of one of the calculated powfuscate the amount they are transferers equals to zero, a miner can be 100% ring but also allow miners to verify sure the transaction is valid. The full their transaction without knowing the math can be found in the research paexact amounts. per Monero has published.

For example, Bob wants to send Alice Monero. When transferring Monero, a transaction secret is shared between Bob and Alice encrypted with Alice

chain does not support this natively so both sender and receiver must take part in this process.

her public key. This secret key is used to encrypt the transacted amount.

Also, this secret can be decoded with Alice her private key so she can verify that Bob is sending the correct amount of Monero.

STEALTH ADDRESS Stealth addresses are used by multiple blockchains like Bitcoin, Verge, and Monero. However, the Bitcoin block-

Any blockchain that supports the Enigma protocol can provide an extra layer of security for its smart contracts.

A stealth address requires the sender to create random one-time addresses based on the recipient's public address.

If you want to know more, the address is created using a so-called public view key and public spend key scrambled with random data.

The benefit for them is that the wallet addresses will not be publicly exposed during the transaction process. The one-time address is unlinkable to the original transaction but also unlinkable to any other one-time addresses that have been created for the recipient.

After the funds have been sent to the one-time address, the recipient can derive the secret key associated with this address and retrieve the funds. Only the sender and receiver will know a transaction occurred between them as no wallet addresses were made public.

Stealth addresses are a clever mechanism to retain privacy. Monero supports this feature by default for basic transfer transactions.

OTHER INTERESTING PRIVACY CONCEPTS • Mimblewimble Beam project.

• Zk-snarks • Coin mixing and change addresses (Dash) 17

APRIL-MAY 2019

BLABBER — A Social Network for the Crypto Community The Crypto Community knows the battle we are fighting every day to keep up with all the communication on Telegram and other social media apps. We use these apps to connect with people, follow events, make new friends, share the experiences we have with service providers, and as a company, ultimately reach our own users. In addition, most people feel increasingly uncomfortable sharing their Facebook or Instagram profiles with people they just met at crypto conferences, summits, and meetups.

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The Crypto Community is still in its infancy and there is no standard for a social platform that is exactly tailored to the needs of this community which primarily wants to share relevant content, connect with like-minded people, find the right service providers, and follow by ICO CROWD exciting events.

BLABBER will tackle all these problems for the Crypto Community. The development of location-based services is deeply integrated into BLABBER’s DNA. The BLABBER team has gained experience with the latest technologies in a vast range of IT-related projects which led them to build the first decentralized and location-based social network allowing its users to create and interact with content based on their current location, without prior connection to other users. This approach makes networking and socializing for the Crypto Community truly comfortable. For example, during a crypto conference, users gain access to local topics, attendees, exhibitors, and speakers to connect, communicate, and share content. Most importantly, companies,

including ICOs and marketing services, can directly reach the right group of people at the conference with their targeted advertising.

BLABBER has integrated several crypto community-related features into its platform. Content Channels is one of these new features, helping to create a clear structure for accessing the most important content. A Content Channel can be location dependent, which means that only content from a selected area is displayed in this channel. Furthermore, a Content Channel can also be group-based, which means that all members of the channel can add content regardless of their current location. These features are especially useful for events to quickly access relevant content without noise. BLABBER’s “Friends and Follow” feature allows users to easily manage their contacts to keep up with the latest and relevant topics of their connections. To increase security, BLABBER offers the verification of accounts to protect users from scams, phishing, and shady service providers.

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The BLA Token plays a central role in BLABBER’s advertisement mechanism. BLA Tokens are used by advertisers to target content, while users have the ability to decide how much of their personal data they want to disclose to advertisers. In return, users can earn BLA Tokens for consuming advertised content. This means that BLA Tokens, used for placing advertisements, are distributed to the users who have provided their personal data and consumed the advertisements — all without third parties, securely and transparently on blockchain technology.

entire network. The real incentive is that collected BLA Tokens of rewarded posts will be distributed to users who supported such content. The basic idea behind this concept is that the earlier users support a post, the higher their share when the post goes viral. BLABBER describes this incentive as "investing in content".

This was a small overview of what BLABBER is and what their plans for the future are. BLABBER's long-term vision is to establish its social network in the crypto space as the trusted platform on which the community can Another decentralized feature is that rely. The team is currently developing users can be rewarded directly by oththe new version of the beta app, which er users with BLA Tokens for creatwill be available for iOS and Android ing high-quality content. In addition by mid-November. BLABBER’s roadmto the monetary incentive of creating ap calls for further development of the content, the rewarding itself provides a core platform, the release of the advermuch bigger incentive. Users who con- tiser platform, the launch of the develsider a certain post as interesting, exoper platform, decentralized content citing, funny or valuable, simultaneous- and much more. ly "invested" in such content when they reward it with BLA Tokens. The more We can already see where BLABBER’s BLA Token users “invest” in content, journey will take the Crypto Community. the more valuable it becomes for the The BLABBER team is looking forward to

Let’s build the social network of the future for the Crypto Community. Send us feedback and participate in development decisions.

Only together are we able to realize our ambitions, establishing a social platform that eliminates shady paid services, fake reputation, and spam, creating a Community of Values that users can trust.”

an exciting future with the Crypto Community and respectfully calls for collaboration: "Let's build the social network of the future for the Crypto Community.

Send us feedback and participate in development decisions. Only together are we able to realize our ambitions, establishing a social platform that eliminates shady paid services, fake reputation, and spam, creating a Community of Values that users can trust."

Don't miss the launch of BLABBER, sign up for their newsletter to keep up with the latest updates on product features, events, airdrop bounties, and much more.

Follow BLABBER on Twitter, Medium, Telegram and soon on BLABBER.

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APRIL-MAY 2019

Could Blockchain Have Prevented the Chinese Chip Scandal Super Micro, A server maker embroiled in a scandalous Chinese spy chip story is insisting the story is wrong and called the allegations “technically implausible.”

US based Super Micro has sent a note to its customers denying the claims made in a recent Bloomberg BusinessWeek article which alleges that the Chinese government has covertly slipped tiny surveillance chips into selected Super Micro server motherboards during by the manufacturing stage.

GARY WALKER According to the Bloomberg article the bugged boards were shipped to around 30 organisations including a major bank, US government contractors and even Apple and Amazon. The article alleges they open a backdoor allowing data to be extracted by Chinese state spies. Apple, Amazon and Super Micro state that, this is a fabrication.

The Bloomberg article states: “The chips had been inserted during the manufacturing process, two officials say, by operatives from a unit of 20

the People’s Liberation Army. In Supermicro, China’s spies appear to have found a perfect conduit for what U.S. officials now describe as the most significant supply chain attack known to have been carried out against American companies.

One official says investigators found that it eventually affected almost 30 companies, including a major bank, government contractors, and the world’s most valuable company, Apple Inc. Apple was an important Supermicro customer and had planned to order more than 30,000 of its servers in two years for a new global network of data centres. Three senior insiders at Apple say that in the summer of 2015, it, too, found malicious chips on Supermicro motherboards. Apple severed ties with Supermicro the following year, for what it described as unrelated reasons.”

Super Micro has also forwarded a copy of its customer advisory to the America's financial watchdog, the Securities and Exchange Commission, which has published it online.

In his letter to customers, Super Micro CEO Charles Liang, and two senior veeps, say they are confident Bloomberg's tale of surveillance chips inserted into its products was wrong.

They wrote: “From everything we know and have seen, no malicious hardware chip has been implanted during the manufacturing of our motherboards," They have also complained about the difficulty of dealing with a false negative: "We trust you appreciate the difficulty of proving that something did not happen, even though the reporters have produced no affected motherboard or any such malicious hardware chip. As we have said firmly, no one has shown us a motherboard containing any unauthorized hardware chip, we are not aware of any such unauthorized chip, and no government agency has alerted us to the existence of any unauthorized chip."

FBI director Christopher Wray, NSA Senior Cybersecurity Advisor Rob Joyce, Director of National Intelli-

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gence Dan Coats, the US Department of Homeland Security, and the UK’s GCHQ have all questioned the validity of the story.

Bloomberg goes on to say: “Nested on the servers’ motherboards, the testers found a tiny microchip, not much bigger than a grain of rice, that wasn’t part of the boards’ original design. Amazon reported the discovery to U.S. authorities, sending a shudder through the intelligence community. Elemental’s servers could be found in Department of Defence data centres, the CIA’s drone operations, and the onboard networks of Navy warships. And Elemental was just one of hundreds of Supermicro customers.”

Apple and Amazon have in the past demonstrated a strong tendency to spin their way out of embarrassing situations with carefully constructed denials. It is also very strongly in Super Micro's interests to deny the story.

So far, Bloomberg has stood by its reporting.

The chip that was implanted allegedly allows The Chinese People’s Liberation Army to gain control of the systems they were put into. Control of systems can also be gained on a software level. In October 2016 three men under twenty-one, compromised many net connected DVR’s and webcams and instructed them to attack the servers of some of our favourite websites. Whatever the attack vector, in all cases, it comes down to “transmission control.” It is the internet’s communication protocol, TCP/IP that allows the transmission of data between devices.

When a device is manufactured, it may seem like an exact clone of all other units of the same specification.

However, at the Amazon has pulled its Q4 ads from finest level of Bloomberg’s website, cutting off signifdetail each is icant ad revenue. Meanwhile, Apple has unique due to decided to punish Bloomberg by banthe properties ning the company from their “There’s More in the Making” event. of the silicon it is manufactured BLOCKCHAIN TO THE RESCUE on. Each chip It may be possible that we can close has a unique these attack vectors through innovative use of distributed ledger technolfingerprint. ogy. When a device is manufactured, it

may seem like an exact clone of all other units of the same specification. However, at the finest level of detail each is unique due to the properties of the silicon it is manufactured on. Each chip has a unique fingerprint.

Imagine a distributed ledger framework that stores the fingerprints of all manufactured devices stored on it. As new devices are manufactured they are added to the ledger. If at any point a malevolent message comes through, a quick check of the ledger could prove the sender of the message was not legitimate and it would be disregarded.

By using this system there is no need to re-invent TCP/IP (a monumental task) to increase hardware and network level security. We merely introduce a distributed ledger-based protocol to sit on top which would coordinate device-to-device communication.

This would dramatically decrease the chances of a large-scale state sponsored hack taking control of a nations hospitals, traffic systems or electricity grid.

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APRIL-MAY 2019

Ticketmaster Invests in Blockchain Ticketmaster Entertainment, Inc. is a ticket sales and distribution company that operates worldwide. It is based in Beverly Hills, California in the United States. In 2010 it merged with Live Nation and became Live Nation Entertainment. Most of the ticket sales for venues in the United States are fulfilled at Ticketmasters two main fulfillment centers in Charleston, West Virginia and Pharr, Texas. Tickmasters clients are the promoters and control their events, with Ticketmasters acting as an agent and sell the tickets that clients make available to them.

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They are the global leader in ticket sales. Each year Ticketmaster sells hundreds of millions of tickets and has revenue in excess of $8 billion USD. Ticketmaster has announced that it has acquired a blockchain ticketing compaby ICO CROWD ny called UPGRADED. UPGRADED turns traditional tickets into smart. Blockchain-secured tickets which will allow tickets to have additional features and will help in the battle against ticket fraud. By making tickets into secure and interactive digital assets using blockchain technology and encrypted ticket barcodes the organisation can better prevent counterfeit tickets.

At the time of writing it is not confirmed whether Ticketmaster will be exclusively using the UPGRADED ticket technology or if it will be licensed to third parties.

It should be noted, Ticketmaster’s acquisition of Upgraded comes at a time

when the company has been accused of hiring “pro scalpers” to conduct ticket sales. The ticketing technology and marketing firm has denied being involved in this type of strategy.

Through the use of blockchain the smart tickets enable data sharing between event managers and ticket sellers. The blockchain can securely store information about who has owned the ticket, if it has already been sold, and who the consumer is that purchased the ticket. Ticket sellers could put in place restrictions on the ability to resell the tickets or even require a percentage of the resale value go to the event owner instead of the ticket owner.

The smart ticket also provides opportunities for marketing. Venues could for example attach parking passes or the right to merchandise to the ticket.

The tickets will still use barcodes like today's current tickets. However, the barcodes will be “obfuscated” up un-

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til the consumer is at the event door, thus reducing the opportunities for duplication. UPGRADED tickets are delivered to purchasers via email, they have to be displayed on a device and cannot be printed due to the obfuscated details until the door of the venue open.

per year. The Ethereum blockchain may struggle to handle that many transactions carried out on it in a reasonable time frame. The Ethereum blockchain carried out around 1.3 million transactions on its busiest day and there was much worry about network congestion.

Currently, blockchain Upgraded was founded by CEO Sandy Given the large numbers of transactions Khuand who was CTO at InStadium, an that will have to take place on the block- technology ad network for pro and college sports chain it is likely that UPGRADED will be is too slow to venues. Before that, he was a Direcusing its own sidechain or state chanaccommodate tor of Turner Broadcasting focusing on nel. If this is not the case it is likely that a robust, emerging technologies.

UPGRADED tickets will only be used on competitive, some tickets and will not be a complete and userSandy Khaund, the founder and CEO rollout across all ticketmasters sales. of UPGRADED, said in an official friendly instant press release: "Ticketmaster is the un- UPGRADED is not the only blockchain verification questioned leader in live event ticketcompany in the ticket market. Anticketing system ing and is the perfect platform for us to other solution, from the Netherlands at times of such bring the unique promise of blockchain based GET foundation, recently went peak capacity.� to millions of fans." live, also on Ethereum. They have proDetails remain sketchy about the UPGRADED proposition. We know little of its internal mechanics other than that it is based on the Ethereum blockchain. We do not know to what extent the blockchain is used to secure and manage the tickets. We can assume that smart contracts are probably going to be used to deliver the functionality that UPGRADED has described.

UPGRADED is likely to face some scaling issues. This is due to the fact that Ticketmaster sells 500 million tickets

vided more details on how they will be using the blockchain and have confirmed they will be using a centralized database for ticket management whilst gradually introducing more on-chain solutions. Their white paper states: "Currently, blockchain technology is too slow to accommodate a robust, competitive, and user-friendly instant verification ticketing system at times of such peak capacity."

Aventus is a startup based in London.

Over a year ago they ran an ICO that

raised over $18 million US dollars. The current market cap is just over $1.25 million at the time of writing.

Secutix is another fast growing ticket company that has a blockchain app which UEFA is currently trialing.

Some of the other competitors have chosen not to go down the blockchain route. Rival Entertainment, which was founded by ex Ticketmaster CEO Nathan Hubbard has more than $30 million of funding from Andreessen Horowitz and some big sports teams.

Ticketmaster's Justin Burleigh, the company's chief product officer for North America has only confirmed that Ticketmaster is "exploring emerging technologies, and there aren't many that have the unique possibilities of blockchain." Burleigh added: "We think blockchain and UPGRADED will continue our progress to improve ticketing and create a safer and more seamless experience."

As to quite how this is all going to work is still shrouded in mystery. However, with a big name like Ticketmaster Entertainment Inc. actively pursuing blockchain technology it is likely that it will soon be an integral part of the ticketing industry.

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APRIL-MAY 2019

The IMF Weighs In on Crypto The International Monetary Fund (The IMF) is an international organisation with 189 members. The mission of the the IMF is to foster global monetary cooperation, create financial stability, help in facilitating international trade, to promote high levels of employment and create sustainable economic growth whilst reducing poverty around the globe.

The IMF was created post war in 1945 and is governed and accountable to the 189 member countries that comprise its almost completely global reach.

The IMF’s primary purpose is to maintain the stability of the internationby ICO CROWD al monetary system, the monetary system of exchange rates and international payments that allows countries and their citizens to transact with each other smoothly. The IMF’s mandate was changed in 2012 to include all macroeconomic and financial sector issues that can affect global stability.

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The IMF’s mission is to ensure the ongoing stability of the international monetary system. Which it does so in three ways: • By keeping track of the global economy and the economies of member countries • By lending to countries with balance of payment difficulties • By giving practical help to members.

required for strong economic growth whilst dealing with underlying issues.

Via its process of economic surveillance the IMF oversees the international monetary system and the financial policies of its member nations. Part of this process involves the IMF highlighting possible risks to global financial stability and advises on the required policy adjustments.

The IMF is not without its critics who often complain that the organisation is designed specifically to maintain American hegemony, holds nations to ransom and it has been accused of causing more damage than it prevents, an example of this would be the IMF’s alleged causing of the 1990s Asian financial crisis.

The IMF is a lender of last resort for member countries that are experiencing actual or potential balance of payment problems. They can help nations rebuild their international reserves, stabilize their currencies, help nations continue to pay for imports and attempt to restore the conditions

The IMF also works with governments around the globe to help them modernize their economic policies and institutions. Through this process the IMF aims to assist countries in strengthening their economy, improve growth and to create jobs.

The IMF has recently weighed in on the subject of crypto and its potential impact on the global economy and the international finance system. They have stated that rapid growth of Bitcoin and other cryptocurrencies could adversely affect the international financial system.

APRIL-MAY 2019

Their report entitled “World Economic Outlook: Challenges to Steady Growth” published by the IMF read: “Cybersecurity breaches and cyberattacks on critical financial infrastructure represent an additional source of risk because they could undermine cross-border payment systems and disrupt the flow of goods and services.

Continued rapid growth of crypto assets could create new vulnerabilities in the international financial system.”

The IMF has stated that continued growth of crypto could create new and unforeseen vulnerabilities in the world's financial systems. Hackers have increasingly turned their attention towards crypto as its value has grown. The irreversibility of transactions combined with the anonymity of transactions makes crypto the perfect asset for hackers to try to steal. More and more frequently digital asset trading platforms are the targets of victims of hack attacks.

Cybersecurity breaches and cyberattacks on critical financial infrastructure represent an additionAlthough 2018 has seen around an 80 Last year alone we saw over $1 bilal source of risk percent decline in the total market cap- lion USD stolen from exchanges in italization of the cryptosphere, the inhack attacks and this is sure to grow. because they dustry has started to mature and we The world of crypto needs to establish could underhave seen several positive developmechanisms to deal with the aftermath ments in the world's major economies of hacking attacks to minimize the po- mine cross-border payment with regards to regulation, institution- tential knock-on effects in traditionalization and the development of cryp- al markets. systems and distocurrency as an asset class. rupt the flow of The third largest crypto market after goods and serCrypto behemoths such as Gemini and the USA and Japan is South Korea. ExCoinbase in collaboration with severchanges in South Korea have been tak- vices. Continued rapid growth al major financial institutions such as ing steps to protect investors funds NYSE, Cboe and Goldman Sachs have with some beginning to ensure their of crypto asall started to develop and strengthen funds through known and trusted insets could create the infrastructure behind the crypto surance providers. new vulnerabilimarket. Paving the way for entry into ties in the interthe market by institutional investors In the USA, Gemini, a leading crypand retail traders alike. As this process to exchange owned by the Winklevoss national finanaccelerates existing markets will betwins and Coinbase both obtained incial system.“ come more and more exposed to this nascent asset class.

surance services from Aon to ensure that in the event of a catastrophic secu-

rity breach that users funds would still be available to withdraw.

“Consumers are looking for the same levels of insured protection they’re used to being afforded by traditional financial institutions. Educating our insurers not only allows us to provide such protections to our customers, but it also sets the expectation for consumer protection across the crypto industry,” Yusuf Hussain, Gemini’s Head of Risk, said.

In February the IMF chief Christine Lagarde said international regulatory action on cryptocurrencies is "inevitable" and that the IMF's concerns over cryptocurrencies stem largely from their potential use in illicit financial activities.

"An indiscriminate rollback of post-crisis regulatory reform and oversight— both domestically and internationally—could encourage excessive risk-taking, leading to a further buildup of financial vulnerabilities," the latest IMF October report also warned.

More recently the IMF has been critical of a proposal from the Marshall Islands to launch their own sovereign cryptocurrency. On September 10, the IMF criticized the finalized plans of the Marshall Islands of creating a national 25

APRIL-MAY 2019

cryptocurrency, citing potential money laundering, financial integrity, and macroeconomic risks.

“In the absence of adequate risk mitigating measures, the issuance of a decentralized digital currency as a second legal tender would not only increase macroeconomic and financial integrity risks but elevate the risk of losing the last U.S. dollar CBR.”

er form it is, whether in digital or fiat form,” Paul said.

prevent the systems becoming havens for fraudsters and money launderers.

The IMF has expressed concerns regarding the national cryptocurrency of the Marshall Islands as it fears that the currency will be manipulated by criminals, crime syndicates, and businesses running fraudulent operations.

Lagarde said central banks had to work quickly to establish digital cash for burgeoning networks of private financial transactions or risk their mushrooming into trading networks that were inherently unstable.

In the absence of adequate risk mitigating measures, the isThe threat to cut financial aid to the Marshall Islands has had an effect. Dr. suance of a deThe IMF states, the Marshall Islands is Hilda Cathy Heine, President of the centralized digilargely dependent on external aid ofMarshall Islands, faced political attal currency as a fered by major economies like the US. If tacks and a no confidence vote due to the government pursues its proposal to the proposal of the government to pur- second legal tenlaunch a national cryptocurrency, the sue the development of a national cryp- der would not IMF suggests that countries may cut fi- tocurrency. only increase nancial aid that is currently being ofmacroeconomfered to them.

It is possible political pressure could ic and financial force the Heine administration to lay integrity risks In May, the Marshall Islands initially off the plans to launch a digital asset, disclosed its plans to eliminate its deat least temporarily. However for now but elevate the pendence on the US dollar and switch the plans seem to be going ahead. risk of losing the to a national cryptocurrency. last U.S. dollar Shortly after making their statements CBR.“ David Paul, minister-in-assistance to regarding the Marshall Islands, Christhe president of the Marshall Islands, said: “As a country, we reserve the right to issue a currency in whatev26

tine Lagarde, head of the IMF stated that governments should consider offering their own cryptocurrencies to

Lararde noted that a system regulated by central banks could become the basis for a rapid expansion of financial services to developing world countries and the poorest people in western societies without the risks associated with privately managed digital currencies.

Many crypto enthusiasts are likely to be cynical of a crypto run by a sovereign state. To a lot of people the two ideas simply are incongruous. A central bank will bring with it heavy handed regulation and would raise costs. Its success or failure would also depend greatly on the fiscal prudence of the issuing authority.

Traditional businesses that are wishing to implement blockchain technolo-

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gy to process transactions are likely to be more welcoming of this regulation and the assistance central banks provide in preserving the integrity of financial systems.

Speaking at a fintech conference in Singapore, Lagarde said central banks would take over the processing of transactions while private-sector providers offered innovative services to customers:

Sweden’s central bank has run tests and the IMF has noted that Canada, China and Uruguay as also moving ahead with plans to provide a digital currency.

Lagarde stated that many consumers were wary of using bank accounts to buy goods and services because they could be tracked by third-parties such as insurers, who might increase charges based on transactions data.

The central bank focuses on its comparative advantage – backend settlement “The advantage is clear. Your payment She said that whilst it was legiti– and finanwould be immediate, safe, cheap, and po- mate to prefer digital cash. Central cial institutions tentially semi-anonymous. And central banks need to have oversight to prebanks would retain a sure footing in pay- vent customer funds being stolen and and start-ups ments. In addition, they would offer a to stop abuses by criminal gangs. IMF are free to focus more level playing field for competition, research has shown that only central on what they do and a platform for innovation. Meanbanks could develop systems required best – client inwhile your bank or fellow entrepreneurs to be safe enough to meet the needs terface and inwould have ensured a friendly user expe- of the modern user. novation. This rience based on the latest technologies,.

Lagarde added: “A new wind is blow- is public-private “Putting it another way. The central ing, that of digitalisation. In this partnership at bank focuses on its comparative advan- new world we meet anywhere, anyits best.“ tage – back-end settlement – and finan- time. The town square is back – vircial institutions and start-ups are free to focus on what they do best – client interface and innovation. This is public-private partnership at its best.”

tually, on our smartphones. We exchange information, services, even emojis, instantly … peer to peer, person to person.

“We float through a world of information, where data is the ‘new gold’, despite growing concerns over privacy and cyber-security. A world in which millennials are reinventing how our economy works, phone in hand. And this is key; money itself is changing. We expect it to become more convenient and user friendly, perhaps even less serious looking.

“We expect it to be integrated with social media, readily available for online and person-to-person use, including micropayments. And, of course, we expect it to be cheap and safe, protected against criminals and prying eyes.”

Continuous efforts to strengthen the infrastructure behind cryptocurrency markets and innovative new insurance products will help mitigate the risks posed by cryptocurrencies to the global financial industry and I myself actual see the IMF’s acknowledgment of cryptocurrencies as an emerging asset class as a positive for the world of crypto even if they have sent mixed messages to the Marshall Islands.

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Taking Crypto Off-grid Bitcoin and cryptocurrency in general are often seen as a way that society will finally free itself from the shackles of the current financial paradigm. It is seen as a destroyer of banks and governments. It therefore has some overlap with those in society who seek to live off grid, those who wish to distance themselves from authority and even amongst the “prepper” community who are planning for an apocalyptic doomsday event that will destroy society as we know it.

There are however two points of contention between cryptocurrency and these other communities. Firstly, there is proof-of-works absolute dependency upon the power grid and then there is the dependency upon an internet connection. How can one by ICO CROWD truly disconnect if one is always going to be reliant upon government infrastructure to perform transactions?

Bitcoin doesn’t help much if you can’t turn the lights on.

However, there are some members of the crypto community who are at28

tempting to develop solutions to these problems and some claim to already have cracked it.

The developers of Burst have developed a solar-powered blockchain that can complete cryptocurrency transactions using only short burst radio waves. Other projects have integrated radio waves into the transaction process but Burst appears to be the first project to have completed a totally off-grid transaction. This development opens the possibility of bringing crypto to disaster zones and areas with poor electrical or internet coverage, such as parts of Africa.

Bursts project was part of the Call for Code challenge. The challenge aims to bring developers together to create tech for the good of humanity. One of the challenges focuses is humanitarian relief.

Developer Daniel Jones described the project to CCN, stating: “Radio is used in natural disasters and is an infrastructure we often overlook.

Burst is mined with hard drives, it requires far less power. And as far as de-

veloping the radio piece, it’s done. It’s not hard to send a packet over radio, just got to use right tools and understand the myriad of regulations.”

In the event of natural or man-made disaster crypto over radio can preserve value and give people something useful to trade with even if the grid or the net is not available. The project also enables participants to send proof-oflife confirmation without directly revealing their location. This has use cases in war torn and disaster-stricken zones.

The full details of the technical side of this project have not been revealed but in a blog post they discuss the use cases for the technology. The blog states that surviving hurricane Katrina in 2005 served as a lesson in showing them how tenuous the systems we live by are. The use-case is highlighted as the ability to communicate from a location where normal channels are – for whatever reason – not open, i.e. warzones or disaster zones.

“Most of us take for granted living in an environment of freedom and peace among those things that we take for

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transactions hint at broader applications for this idea.

“Radio is used in natural disasters and is an infrastructure we often overlook. Burst is mined with hard drives, it requires far less power. granted is communication technoloUsing 4 devices called goTennas (short And as far as developing the gy … What if under the guise of an op- range radios that pair with smartpressive government regime, any and phones) he established an ad-hoc radio piece, it’s all transmission of data we take for mesh network. The maximum range done. It’s not granted could cost someone their life, is supposed to be only 6.4 kilometers hard to send disclose their safe place, or worse, dis- (3.9 miles) so he set up four of them a packet over close others that may be with them.” on high ground as close to the maxiradio, just got to mum range as possible.

Burst is not the only project to be dealuse right tools ing with mesh off grid transactions. Re- He then set up the goTenna app (txand understand cently a New Zealand developer sent Tenna) on his phone along with the ofthe myriad of two signed Bitcoin transactions using fline wallet app Samourai Wallet. regulations.” only radio signals and a cheap smartphone whilst offline and not connected to a mobile operator. The maximum distance that was achieved was 12.6 kilometres (7.8 miles) away.

The experiment was not without its issues. One transaction did not complete due to app pairing issues. However, the success of the other two

This experiment was carried out in a relatively rural area. If this technology was intended to be used in more urban areas the number of antennas would have to be increased dramatically.

Also, as this project used Bitcoin and not BurstCoin, as the other project did, there is the issue that the network would have to occasionally re-sync with the Bitcoin blockchain to prevent the issue of double-spends.

The philosophy behind these experimental projects is admirable. However, I cannot help but think that each of these projects required an immense amount of pre-planning by those involved. The solutions are technically difficult for the average Joe and it is probably beyond the capabilities of most. However, we live in an ever-changing world and no one can truly be sure when disaster will strike. Those who are best prepared will be the ones who survive and prosper in the event of disaster. Those who are that way minded, and maybe already have their underground bunker, water purifier and ten years supply of dehydrated food from the InfoWars store may well find themselves adding shortwave radio transmitters, solar batteries and portable hard drives to the list of prepper essentials.

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Stellar and Lumens Stellar is an open source, decentralized protocol designed to allow digital currency to fiat currency transfers, allowing cross border transactions between any pair of currencies. The open source code for the platform is hosted on Github. The platform can confirm transactions within 2 to 5 seconds. The platform is based on distributed ledger technology. The stellar network uses Lumens (XLM) as a bridge to facilitate payments. The Stellar network has been used by companies such as IBM, KlickEx, Deloitte, Parkway Projects, Tempo, Wanxiang Labs and Stripe.

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Stellars focus is on the developing world. Their system allows people to connect payment systems and banks, allowing for quick transactions at a cost of a fraction of a penny. It is estimated that “the great unbanked” population of the world represents a $380 billion by ICO CROWD US dollar opportunity.

collaboration with Stripe CEO Patrick Collison and the project launched that same year.

Stellar received $3 million US dollars in seed funding from Stripe.

Stellar Lumens are pre-mined and at the launch of the network there were 100 billion lumens. 25% of these Lumens were set aside to be given to other non-profit organisations working towards financial inclusion. 2% of the Lumens were given directly to Stripe in return for their seed funding, which at the time of writing equates to half a billion dollars, not bad for a $3 million investment. By January of 2015 Stellar had approximately 3 million user accounts on its platform and it had a market cap of around $15 million US dollars.

Stellars speedy transaction times are a result of its innovative consensus protocol. The protocol does not require the entire miner network to approve transactions. Instead, it uses something called the Federated Byzantine Agreement (FBA) algorithm that only requires a portion of the network to approve and validate a transaction. Each node in the network chooses a set of trustworthy nodes and once the transaction is approved by all in that set the network considers it approved. It is claimed that the network can process Lightyear.io was the for-profit entity as many as 1000 operations per second. created by Stellar. It was the commercial arm and marketing branch of the Stellar is supported by the non-profit Stellar foundation. It has recently been Stellar Development Foundation. announced that Lightyear.io and Chain are merging to form a new entity called In 2014, Jed McCaleb, the founder of Interstellar.

Mt.Gox and the co-founder of Ripple launched the Stellar network with forChain is an internal ledger builder for mer lawyer Joyce Kim. The Stellar De- various clients. Chain ‘s CEO, Adam velopment Foundation was created in Ludwin – whose firm is backed by part-

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nerships like Visa, Nasdaq and Citigroup, has been quoted as saying: “We are being acquired by an entity that no one has ever really heard of.”

Ludwin is staying on and will become the CEO of Interstellar and Jed McCaleb will be the CTO. All of Chains staff are staying on, as are Lightyear’s.

That will create a total workforce of 60 Interstellar employees.

Details of the deal are not being made public, but it is understood that all of Chains investors are getting cashed out.

PARTNERSHIPS In 2015 Stellar announced that they were integrating with Vumi, an open source message platform from the Praekelt Foundation. Vumi uses mobile phone talk time as currency using the Stellar protocol.

Stellar has also partnered with Oradian, a cloud-based banking software company to allow microfinance institutions in Nigeria.

Deloitte and Stellar announced they would be cooperating to build a cross border payment application in 2015.

Stellars payment network has also expanded to include Coins.ph mobile payment startup in the Philippines, ICICI Bank in India, Flutterwave - an African mobile payment firm and Tempo Money

Transfer a French remittance company.

In October 2017, Stellar announced partnerships with IBM and KlickEx to help facilitate cross border transactions in the Southern Pacific region. The payment system developed by IBM has support from an array of large banks including Deloitte.

What we really want to do IBM has published a document promot- is enable all ing “Blockchain World Wire” it explains sorts of digital that one of the advantages is that it of- transactional fers a “new financial rail that can simul- networks to taneously clear and settle cross-border settle their payments in near real-time” transactions It states: “Sending money across borwith digital fiat ders today requires a series of intercurrency on the mediaries for both clearing and settlesame blockchain ment, each adding time and cost to the networks” process. With IBM Blockchain World Wire, clearing and settlement with finality happens in near real-time. The solution uses digital assets to settle transactions – serving as an agreed-upon store of value exchanged between parties – as well as integrating payment instruction messages. This all means that funds can now be transferred at a fraction of the cost and time of traditional correspondent banking”.

IBM has also announced its interest in using the Stellar blockchain to create a new stablecoin pegged to the US dollar.

They have signed an agreement with a startup called Stronghold to exploit the potential of blockchain technologies in a new mode of payment processing:

JESSE LUND, Head of Blockchain Services for Financial Institutions, IBM

“What we really want to do is enable all sorts of digital transactional networks to settle their transactions with digital fiat currency on the same blockchain networks,” said Jesse Lund, IBM’s head of blockchain services for financial institutions, in an interview with Coindesk.

What seems quite strange is that neither IBM or the Stellar Development Foundation has made much noise about these ambitious projects.

Stellar has also partnered with SureRemit a non-cash remittance platform focused on solving the problems of remittance in Africa, the Middle East and India.

In January this year, it was announced that ZED Network planned to develop an integrated global payment platform using the Stellar network and its blockchain technology. Mobius Network had its initial coin offering on the Stellar network and Stripe has also stated, that it might add support for Lumens to its online payment system.

Stellar in many ways mirrors the functionality of the Ripple network. It could almost be considered an open source clone of it. There has been much hype about Ripple recently and it has been one of the few currencies to buck the downward trend in the world of crypto. With large banks and IBM on board it seems like Stellar could steal Ripples crown.

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How Bitcoin Mining Can Help Nuclear Reactors Bitcoin received much criticism in the media regarding its energy usage. Both environmentalists and economist have deemed it to be too excessive and an environmental threat.

It is true that Bitcoins Proof of Work system burns a lot of electricity and the amount is only set to increase, but this does not mean that Bitcoins energy usage needs to add to global greenhouse emissions, in fact, if you look at the problem creatively there is a way by ICO CROWD that we could actually make our electrical grids more efficient whilst using it to satisfy all of Bitcoins electrical needs well into the foreseeable future.

The solution involves nuclear power plants. The wasted production from just a few reactors is enough to power the entire bitcoin network and when reactors are run at their peak output they are in fact safe and at their most efficient.

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The scenario painted by eco-activists regarding Bitcoin is a massive oversimplification of the issue at hand.

Whilst most eco-warriors are no fans of nuclear power it is a reality and it is here to stay. Something you rarely hear from activists is that it is much better to burn excess energy production than it is to waste it and Bitcoin can help here.

by the reactor. Factors such as time of day and time of year mean demand can vary wildly. During the night when demand is lower, nuclear power plants often insert control rods to lower the intensity of the nuclear reaction. From an economic standpoint this is bad you are throwing away good energy that could be used for other purposes.

Once the process of nuclear fusion is started it is not possible to pause or stop it. It can only be temporarily held back. A nuclear power plant uses this process in a controlled manner to boil a liquid which is most frequently water. The water vapour runs through massive steam turbines which in turn generate electricity. The more water it boils, the more efficient the reactor is.

If the energy is not utilized, it is wasted.

If you are to look at it from an engineering perspective, it makes sense to minimise the amount of cooling and heating cycles as they place thermo-mechanical stress upon the components required to generate nuclear energy. Some pressurised water reactors have been shown to have developed cracks after just two years of normal operations. By keeping these reactors running we can in fact extend their lifespan greatly.

As the needs of consumers on the grid fluctuates, we do not always need 100% of the energy generated

The process of adjusting output to meet the needs of the grid is called “load flowing� most reactors perform

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a large adjustment in output twice per day and some have to do this even more frequently when the need arises to stabilize the grid. Nuclear power plants in Europe are required to be able to adjust their output levels by at least 50 percent of their rated power and do so at a rate of 3 to 5 percent per minute.

advent of intermittent and unreliable renewable sources we are actually shortening the lifespan of our existing nuclear infrastructure through irregular load flowing.

If we were to use nuclear reactors as the base load source of electricity rather than restraining them as required, Countries such as France rely heaviwe could massively improve the effily on nuclear power with more than ciency of the network whilst extending 75 percent of their electrical needs beits lifespan. We could ensure that shuting generated by nuclear power. Around downs are only performed for safety 100 reactors make up almost 20 perpurposes and not because of the grids cent of all the energy produced in the needs. By diverting the extra electriciUnited States which generates around ty required to mine Bitcoin we can cona third of the world’s nuclear electritrol the effective flow rate. The best cal energy. thing about this idea is that no extra fuel is actually burned it is simply used The rise of renewables and green enin a more efficient manner and brings ergy have created a number of issues the added benefit of a secondary source for nuclear power plants and in some of income to power generation compaways are actually exasperating probnies potentially lowering bills for the lems in the energy sector. Whereend consumer. as a simple day and night cycle for a nuclear power plant used to be sufThe Economist has estimated that the ficient in most cases, now with the annual global power consumption of

The Economist has estimated that the annual global power consumption of the bitcoin core network is around 22 TWh.

the bitcoin core network is around 22 TWh. This amount of electricity could be generated with only a handful of small nuclear reactors. Around 11% of the world's electricity is generated by about 450 nuclear power reactors.

About 60 more reactors are under construction, equivalent to 16% of existing capacity, while an additional 150160 are planned, equivalent to nearly half of existing capacity. In 2040, the global nuclear power capacity is projected to reach 602 GW of power. This would have an annual output in excess of 5250 TWh. It is clear that the entire bitcoin core network could power itself completely, just on the wasted output of these plants with zero environmental cost and an economic benefit.

Whilst this idea may seem a little out there, if there are tangible benefits to an idea business will find a way.

Maybe it is just a matter of time before miners and power plants deepen their cooperation and Bitcoin truly goes nuclear.

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Governments and Privacy Coins When Bitcoin first came on the scene there was much discussion about the anonymous and untraceable nature of Bitcoin. It quickly became the currency of choice for sites like the silk road where illicit drugs and services could be purchased via the dark web. The perceived anonymity of the coin has led to accusations of money laundering, hacking, drug dealing, terrorism and funding rogue states be laid at Bitcoins door even if the prefered financial medium of those groups has been and continues to be cash.

Bitcoin, however, is not completely anonymous, and as a result governments have recently been stepping up their efforts to track and trace Bitcoin as well as other cryptocurrencies.

Most crypto coins are only pseudonymous. Whilst your name may not be atby ICO CROWD tached to a crypto account, the distributed public ledger contains a list of all blockchain transactions that have ever occured. Governments in fact have a complete record of most crypto online 34

financial activity and only have to find out where money went in and out of the traditional banking system to the world of crypto.

The prying eyes of government have led to the creation of several privacy based coins that do not link transactions to wallets publicly. The most well known of these coins is Monero.

The Japanese National Police Agency (NOA) has announced its plans to implement a system that can reportedly track crypto transactions within Japan. There are few technical details of how this system actually works but its primary function will be to highlight transactions that it deems suspicious and produce a visual representation of the transactions helping the NPA identify the origins and destinations of illegal money transfers.

The software will accept reports of suspicious activity from crypto-exchanges based in Japan. Since May Japanese crypto exchanges have been required by anti money laundering legislation to send details of poten-

tially illegal transactions and the details of the accounts linked to them.

Through know-your-customer policies, the Japanese are able to link real world identities and bitcoin addresses. The system does not allow for the tracking or identification of people who avoid using regulated exchanges. A crypto account could however, appear on the NPA’s radar in the event that the crypto that they are trading in has already already raised suspicions on a regulated exchange.

The Japanese system cannot in anyway track privacy focused coins such as Monero or Zcash and as such the Japanese authorities have banned exchanges in trading in these coins.

Russia is attempting to implement a similar system. The Federal Financial Monitoring Service (Rosfinmonitoring) is building a system that will gather data from various sources regarding those suspected of finance related crimes. The system will create profiles for suspects and the Russian authorities will add whatever relevant information they can garner about their target.

This could be details such as name, gen-

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der, date of birth, phone number, bank cards/account numbers and crypto wallet addresses.

tained by OAKSTAR the NSA can not only identify who crypto users are, but could potentially steal passwords, browsing information, MAC addresses, IP adRussia has not at this stage introduced dresses, timestamps and network ports. anti money laundering and know your It can be used to gather much more inforclient rules for its crypto exchange, how- mation than the Japanese or Russian sysever the State Duma is in the process tem and does not require the cooperation of drafting a digital assets bill that will of crypto exchanges. The system can also do so. The system was expected to be be used to gather data outside the nationlaunched towards the end of 2018 but al boundaries, potentially spying on cryphas been subject to significant delays. to users across the globe.

The Japanese system cannot in anyway track privacy focused coins such as Monero The systems being implemented in Japan This is potentially a huge problem for or Zcash and and Russia are highly dependent on cocrypto. Essentially it could completely operation from crypto-exchanges and the remove privacy from the cryptosphere. as such the piecing together of fragmented informa- To avoid this not only do you have to Japanese tion from a range of sources. Other govmake the transactions private but you authorities ernments, such as the United States are need to ensure that all network connechave banned developing covert systems that can extions are private as well. exchanges in tract data travelling over fiber optic catrading in these bles allowing them to identify IP address- The NSA has also developed software es and wallet addresses of those sending which masquerades as a VPN service coins. and receiving crypto. These covert mechanisms are mentioned in documents obtained by Edward Snowden in 2013.

This technology was developed by the National Security Agency (NSA) and is known as OAKSTAR. Using the data ob-

whilst surreptitiously scraping user data. Users should always stick to VPN packages that they know and trust to avoid this type of intrusion.

In November 2016 the United States Inland Revenue Service (IRS) filed a le-

gal summons that required Coinbase to provide them with the real life identities of an unspecified amount of user accounts. This indicated that the IRS had been able to track the flow of money through Bitcoin accounts sufficiently to determine that certain individuals had been involved in tax evasion and also that those wallets were attached to Coinbase.

The IRS hasn’t made clear quite how they were able to sufficiently prove these wallets were involved in money laundering. However, it is reported that in 2015 the IRS awarded a contract to a Swiss blockchain intelligence provider called Chainalysis. Chainalysis uses information scraped from public forums, leaked data sources including the dark web and exchange deposits and withdrawals to identify transactions. They combine what is publicly available on the blockchain with information unwittingly or carelessly left by crypto users on the net.

The IRS has not publicly admitted that it is working with any blockchain intelligence companies and when in the past branches of the US government 35

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has successfully tracked real world individuals by their crypto activity there does appear to have been input from the NSA. In 2013, Ross Ulbricht was arrested by the FBI as the suspected owner of the Silk Road. He was charged with conspiracy to traffic narcotics, money laundering and computer hacking. His defence team claimed at his trial that his prosecution violated the fourth amendment (the right to protection against unwarranted searches) as the only way the FBI could have identified him was with the illegal assistance of the NSA. His argument was unsuccessful and he is currently serving a double life sentence plus forty years without the possibility of parole. The Intercept has noted that the NSA’s OAKSTAR project got underway 6 months before his arrest. The website also published classified documents revealing that the NSA had previously secretly helped the FBI secure other convictions.

There have been reports that China has been engaged in monitoring foreign crypto exchanges that were serving Chinese customers via the Public Information Network Security Supervision Agency (PINSS). China has ex36

plicitly banned domestic exchanges and also trading on foreign alternatives.

Many Chinese crypto users are still attempting to circumvent the trading ban and some see it as a way of moving money outside of China without seeking prior government approval. Details are very sketchy regarding how the Chinese monitoring service works but Chinese traders should definitely be careful when attempting to trade crypto.

Indian crypto traders have also not escaped monitoring from their government. Tens of thousands of Indian crypto traders received notice that the their government was keeping an eye on their crypto activity in January this year. The Indian government was able to obtain this data after conducting national surveys and by obtaining user data from nine Indian exchanges.

Indian news site LiveMint has reported the Indian system involves cooperation between the central bank, the Securities and Exchange Board of India and India's intelligence agencies. It is however unlikely that Indias system relies on similar tech to the United States and instead relies heavily upon information provided directly from exchanges.

No other governments have announced public crypto tracking programs although it is highly likely that most national governments have some kind of plans to track crypto in the near future.

Other governments, such as the United States are developing covert systems that can extract data travelling over fiber optic cables allowing them to identify IP addresses and wallet addresses of those sending and receiving crypto. These covert mechanisms are mentioned in documents obtained by Edward Snowden in 2013.

The UK and EU have jointly announced that they are planning a crackdown on money laundering and tax evasion facilitated by crypto. The UK economic secretary to the Treasury, Stephen Barlay has said: "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 above statement doesn’t specifically state that crypto will be tracked but it does imply that it might be. After all, how would they determine that someone is earning crypto that needs to be taxed without tracking it? The EU and UK will need a system in place like this to effectively police and tax cryp-

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to. Otherwise their proclaimed crackdown will be nothing more than empty words.

In April last year Amazon was granted a patent for a “streaming data marketplace� that would allow the combining of multiple data sources to enable the real time tracking of cryptocurrency transactions and the users involved. The text of the patent explains that this technology could be offered to governments who could link crypto addresses to official IDs: "The electronic retailers may combine the shipping address with the bitcoin transaction data to create correlated data and republish the combined data as a combined data stream.

A group of telecommunications providers may subscribe downstream to the combined data stream and be able to correlate the IP (Internet Protocol) addresses of the transactions to countries of origin. Government agencies may be able to subscribe downstream and correlate tax transaction data to help identify transaction participants."

It seems like just a matter of time before these technologies enter the main-

stream. Combined with the growth of blockchain intelligence businesses it seems inevitable that bitcoin and other leading cryptocurrencies will be completely de-anonymised.

As a result of this government monitoring and the need for anonymity a range of privacy focused coins have sprung up. Monero is the most well known privacy coin and it sits in the top 10 cryptos by market capitalization. It is built on the CryptoNight proof of work algorithm which attempts to bury the precise details of a transaction by mixing up transactions and senders addresses with a myriad of others also hiding the exact amount transfered.

Another privacy focused coin is Dash.

At the time of writing it is the 14th most valuable cryptocurrency by market capitalization. Its PrivateSend function allows you to mix up addresses to hide both the origin and destination of transactions. Dash has become incredibly popular in Venezuela where the government has cracked down on cryptocurrencies whilst pushing their own Petro coin. Zcash has also proven itself a popular alternative to dash in the troubled nation.

As well as a range of privacy coins there are other services available for non privacy coins to obscure origin and destination of funds. There are a range of anonymization protocols that mimic the features of privacy coins. Bitcoin users can mix their transactions up with many other senders and receivers, thus making it very difficult to untangle the complex web of transactions that ultimately ensues. Examples of these services are CoinJoin, Dark Wallet, bestmixer. io, SharedCoin and CoinSwap.

To avoid this not only do you have to make the transactions private but you need to ensure that all network connections are As you can see there are a range of tools private as well. both for tracking and for avoiding de-

tection and these tools are ever evolving. This is a game of cat and mouse and whilst there is a need for privacy there will always be a way of dealing in the shadows. If governments are to be more welcoming to crypto it is inevitable that they will want methods and tools to track the money supply. For the majority of crypto users this will not be too much of a problem and we should probably welcome the increased integration it will make possible with the current financial system. For those who wish to remain off radar, whilst there is a will for it, there will always be a way.

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G4S to Provide Secure Crypto Storage G4S is the world's largest private security company measured by revenue. It has operations in over 90 countries. It is the world's third largest employer with over 570,000 staff and the largest European and African employer. It is amongst the largest companies listed on the London Stock Exchange.

G4S was formed in 2004 when London based Securicor amalgamated with Danish business group Group 4 Falck.

G4S offers a wide range of services, including the supply of security personnel, monitoring equipment, response units and secure prisoner transportaby ICO CROWD tion. G4S also works with governments overseas to deliver security.

As traditional cash disappears, G4S will see a significant amount of its traditional business disappearing. G4S is ac38

tively exploring the role of security in an increasingly digital world.

G4S Risk Consulting, advises customers on threat identification and risk mitigation. This includes assessing vulnerabilities to customers’ assets and working practices to identify where they could be exposed to additional risks, such as through armed attacks, and advising on how to address and reduce those risks and vulnerabilities.

In a recent press release G4S has announced that it is entering in to the world of crypto security. The new service aims to address and reduce the risks of owning crypto assets. The service is a vault storage solution. Where crypto keys are held in a secure vault out of the reach of cyber criminals.

Their press release states: There are several ways that people and businesses currently store crypto-assets. Online

wallets have been a popular choice for many, but these are still vulnerable to theft, as they are only as secure as your computers are from hackers.

Dominic MacIver, a senior risk analyst at G4S, said: “Our clients approach us to discuss solutions to their requirements because of G4S Cash Solutions’ experience in protecting high-value items and G4S Risk Consulting’s experience in developing bespoke solutions to complex challenges. Working with our clients, we are continuously applying their expert knowledge of crypto-assets and our best practice in physical security to a sector at the cutting edge of financial technology.”

As institutional investors increasingly seek to enter the crypto market there is a growing demand for secure digital asset storage solutions.

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“At the same time, violent robberies and kidnappings in recent years have shown that the sector is still exposed to conventional criminal threats. In collaboration with our client, our security solution is built on a foundation of ‘vault storage’.

We not only take the assets offline but break them up into fragments that are independently without value and store them securely in our high security vaults, out of reach of cyber criminals and armed robbers alike”.

DOMINIC MACIVER, Senior Risk Analyst at G4S

Recent months have seen announcements from a range of traditional financial companies and crypto startups launching their own crypto custody services.

Fidelity, the United States financial services giant have announced the launch of their cryptocurrency custody and trading services for their enterprise clients. It is reported that Goldman Sachs was considering a similar move in August.

the sector is still exposed to conventional criminal threats. In collaboration with our client, our security solution is built on a foundation of 'vault storage'.

We not only take the assets offline but break them up into fragments that are independently without value and store them securely in our high security vaults, out of reach of cyber criminals and armed robbers alike”.

“Access to these sites is heavily restricted with multiple layers of security and robust protocols, and only BitGo, a crypto security startup has re- when all the fragments are combined cently received approval in the United with specific technology can they unStates to act as a qualified custodian lock access to the value stored within.” for digital assets. Cryptocurrency exchange Coinbase, in May, announced a “It has been a justified cliché to decustody product aimed at assisting in- scribe the cryptocurrency space as a stitutional cryptocurrency adoption.

Wild West. Working with our clients, our innovative vault storage concept Dominic MacIver went on to say: “Ofoffers the highest protection to keep fline storage has become a more estab- people and their assets secure and lished and secure way of storing crypbring order to the frontier.” to-assets" said Dominic. "At the same time, violent robberies and kidnap“The original goal of cryptocurrenpings in recent years have shown that cies was to redesign the fundamen-

tal architecture of money” Dominic explained. “Although some early adopters have made enormous returns, the sector has attracted the same old threats for financial systems, including robbers, scammers, market manipulators and many others. Our innovative security solution helps protect against some of those threats by taking the assets offline and storing them in high-security vaults. This gives people and businesses peace of mind to trust that their crypto-assets are secure.”

The fact that so many large players in crypto, financial institutions and security services are taking such an interest in custodial solutions for cryptocurrencies, can only bode well for the future of the cryptosphere. It adds credence to the idea that we are about to see the influx of institutional investors that everyone has been waiting for. When names like Harvard, Fidelity and G4S are actively involving themselves in crypto it seems, at least to this writer, that crypto is about to go mainstream.

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Christie’s Experiments with Blockchain Christie’s is a world famous British auction house. It was founded by James Christie in 1766. Its main offices are on King Street, St, James’s in London and also in the Rockefeller Center in New York City. The company is owned by by Groupe Artémis, the holding company of François-Henri Pinault. In 2015 sales totalled $7.4 billion US dollars and in 2017 it sold the Salvator Mundi, a painting attributed to Leonardo da Vinci for $450.3 million. The highest price ever paid for a single painting at an auction.

On the 11th of October Christie’s announced that their world leading art business would be piloting an encrypted registration of art transactions on a blockchain. It was part of a unique collaboration with Artory a leading independent digital registry for the art by ICO CROWD market.

For the first time each piece of artwork from An American Place: The Barney 40

A. Ebsworth Collection sold at Christie’s now comes with a secure, encrypted certificate of sale for the successful bidder, creating a permanent digital record of all relevant information about the artwork.

Their announcement was timed to coincide with Christie's upcoming West Coast tour of artwork from the Barney A. Ebsworth Collection which is considered to be the most important privately held collection of 20th Century American art. It has an estimated value in excess of $300 million US dollars.

The centerpiece of the collection was Edward Hopper's, Chop Suey (pictured) and the tour displayed 13 paintings from a collection of more than 90 works from Los Angeles to San Francisco for public exhibitions. The featured paintings in this exhibition included some rarely seen works by the most influential American artists of the modern era such as Jackson Pollock, Willem de Kooning, Georgia O’Keeffe, Jasper Johns, Marsden Hartley, and Charles Sheeler.

A press release from Christies stated: “The introduction of a blockchain encryption component to the collection sale reflects Barney Ebsworth’s own commitment to innovation in business, and his embrace of technology as a powerful tool to advance efficiency and improve the client experience. During his lifetime, Mr. Ebsworth was founder of the Clipper Cruise Line, the luxury travel provider Intrav, and later became a venture capital and real estate investor. Of his own career as a business entrepreneur, Mr. Ebsworth said ‘my tendency to stay ahead of the curve and reinvent the business as needed’ is one of the primary qualities that made him successful in business.”

Richard Entrup, Chief Information Officer at Christie’s commented: “Our pilot collaboration with Artory is a first among the major global auction houses, and reflects growing interest within our industry to explore the benefits of secure digital registry via blockchain technology. The entrepreneurial spirit of the Ebsworth family and their embrace of leading-edge technology makes Chris-

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tie’s November sale of the Ebsworth Collection an ideal platform for our clients to experience this technology for themselves and to explore the advantages of having a secure encrypted record of information about their purchased artwork.”

The blockchain based system works by registering significant events that have taken place over the lifecycle of the piece of art. This could be anything from being displayed in a public exhibition to being sold at auction. Artory and Christie's will collaborate to securely record all public information about the sale in each lot in the Ebsworth collection. This will include the title, a description, the final sale price and date. Artory will produce a digital certificate of the transaction for Christies. After the auction has ended Christie’s will provide each buyer a registration card to access a secure and encrypted record of the information about their purchased artwork on the Artory registry.

The buyer retains control over their personal information throughout the transaction process and no personal in-

formation is recorded on Artory’s registry nor on the blockchain.

Nanne Dekking, CEO of Artory, commented: “We are delighted to work with Christie’s on this industry-leading collaboration. As long-standing participants and business leaders within the global art market, the Artory team innately understands the needs of today’s art collectors and the broader desire within the industry to embrace new technologies that will help the marketplace evolve. This November, Artory is pleased to work with Christie’s and the Ebsworth family to mark the start of a blockchain digital journey for each work in this spectacular collection, and to show the art world how digital encryption technology can benefit buyers and collectors in the future.”

The introduction of a blockchain encryption component to the collection sale reflects Barney Ebsworth’s own commitment to innovation in business, and his embrace of technology as In San Francisco, Christie’s revealed two a powerful tool paintings with storied provenance: Wil- to advance effilem de Kooning’s Woman as Landscape, ciency and impreviously owned by comedian and colprove the client lector Steve Martin (estimate in the region of $60 million); and Franz Kline’s, experience.

Painting from 1954, once owned by the

American artist Joan Mitchell (estimate: $5-7 million). Mitchell’s own 12 Hawks at 3 O’Clock, (estimate: $12-16 million), a near 10-foot tall tour-de-force painted in 1960, were among the highlights of the Ebsworth Collection. The full Collection was unveiled to the public in an extended exhibition from November 4 -13 at Christie’s galleries in Rockefeller Center, New York.

Their press release also stated: “This pilot continues a long Christie’s legacy of leading the industry by introducing technology innovations in the context of major collections, for the ultimate benefit of our clients. Over the years, new technological enhancements have included online bidding in live auctions, live streaming, e-commerce auctions, mobile bidding registration, augmented reality apps, and more. Christie’s pioneered online-only e-commerce auctions with The Collection of Elizabeth Taylor in 2011 and multi-platform, multi-year collection sales (live auction, online, and private sales) with Andy Warhol@Christie’s, sold to benefit the Andy Warhol Foundation for the Visual Arts.”

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APRIL-MAY 2019

Bitcoin Backed Ethereum

Bitcoin and Ethereum are the two largest cryptocurrencies. They are behemoths of the crypto world. Crypto investors tend to fall in to two categories. Bitcoin maximalists and Ethereum maximalists who believe that one day “the flippening� will occur and Ethereum will steal Bitcoins crown. But now the two are to come together a new coin will represent the crypto marriage between Bitcoin and Ethereum.

other Ethereum based projects and many have suggested they will support adoption for the token once it is released.

was heavier and it took longer to trade.

You could use a note which represented a pound of gold and it was well accepted."

Some of the big name who have publicly said they will participate as launch members include MakerDAO, Dharma, Airswap, Gnosis, IDEX, Radar Relay, Compound, DDEX, Hydro Protocol, Set Protocol and Prycto.

BitGo will be the primary custodian in charge of holding the reserve bitcoins to back the minted WBTC tokens that will be in circulation on the Ethereum blockchain.

BitGo is the market leader in institutional-grade cryptocurrency investment services. They provide security, compliance, and custodial solutions for blockchain-based currencies. They In January a new token was launched. are the world's largest processor of onThe token was launched on the Etherechain bitcoin transactions, processing um blockchain and is backed one-toaround 15% of all global Bitcoin transone by Bitcoin, the worlds largest crypactions, and $15 billion per month tocurrency. Being ERC20 tokens, these CTO of BitGo Benedict Chan called it across all cryptocurrencies. BitGo has can then be used freely on the ETH net- "the best of both worlds," and characterized WBTC as possessing both "the over $2 billion in assets in wallets, and work. by stability of bitcoin and the flexibility of a customer base that includes some of ICO CROWD ethereum." the world's largest cryptocurrency exThere are some big names behind this changes and spans more than 50 counproject. Decentralized exchange startChan told CoinDesk: tries. In 2018, they launched the BitGo ups Kyber Network and Republic con"It's very similar in some ways to how Trust Company, the first qualified custrol are both backers along with cryppeople created banknotes that repretodian purpose-built for storing digitocurrency custody company BitGo. There is also strong support from many sented a pound of gold. A pound of gold tal assets..

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The purpose of the coin is to provide the utility of bitcoin on the Ethereum network. The "wrapped bitcoin" or WBTC token can facilitate any decentralized application running on the blockchain.

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Unlike many other stablecoins that are pegged to fiat currencies the WBTC token will have complete proof-of-reserves that will be available on both of the blockchains.

"The beauty of that is all we have to do is put up a webpage and show all the addresses that have the bitcoins … and at the same time, people will be able to check how many WBTC are in existence just by looking … on the ethereum blockchain," said Chan.

The project is envisioned to be a community-driven effort and they hope to onboard multiple custodians and merchants in the longer term. As a result when the network is officially launched next year, a decentralized autonomous organization (a DAO) will also be activated. Its purpose will be to oversee the ongoing development of the project.

"I think it couldn't be that successful if the initiative is owned by Bitgo or by Kyber [Network] or Republic [Protocol] alone," said Luu.

The beauty of that is all we have to do is put up a webpage Luu explained in an interview with CoinDesk: "One of the main reasons and show all why many projects support this initiathe addresses tive is because there's a DAO that's going to govern the whole project includ- that have the bitcoins … and In addition to the bitcoin custodiing making major upgrades, adding an, there will also be registered “mer- more features, adding more merchants, at the same chants”. The merchants will be reeven adding new custodians as well." time, people sponsible for distributing and rewill be able to deeming WBTC tokens to all users.

What is at this time unknown is which check how many These merchants are currently listed companies will head up the DAO. The to be the Kyber Network and Republic structure of the DAO has not been dis- WBTC are in Protocol, merchants complete transclosed and it is at this moment unclear existence just fers of WBTC for bitcoin and vice ver- how DAO members will propose and by looking … on sa, via atomic swaps. vote on changes to the WBTC token. the ethereum blockchain.”

Atomic swaps allow two way crypThe source code to be publicized on tocurrency trades across different blockchain platforms without the risk of one party defaulting on their side of the agreement.

code-sharing platform GitHub at a later date, Luu has stated that decentralized leadership will be a key component to the success of the WBTC token.

BENEDICT CHAN CTO of BitGo

WBTC is not the only project seeking to provide a BTC ETH hybrid. Wanchain (WAN) has been developing a very similar project. With Wanchain users can deploy proxy tokens on other networks that can be used and transacted with.

They have so far managed to successfully link their own blockchain to the Ethereum network and plan to have full chain compatibility with the Bitcoin protocol, following the launch of their 3.0 testnet.

RSK is another project which is worth attention. They are focused on facilitating cross-chain smart contract execution between the Bitcoin and Ethereum blockchains. Their approach is somewhat different but the ultimate goal is similar, linking the two largest blockchains.

At the time of writing WBTC is trading at $4800 which is roughly a $20 dollar premium on its pure Bitcoin counterpart.

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APRIL-MAY 2019

Bionic Amy of Sagewise Launches Private Beta Version of Blokusign

Blokusign is the first-ever tool like this to integrate directly into Gmail as an add-on application. The product fuses electronic signature technology, which has become the new definitive in documentation due to its simplicity, with the benefits of the distributed ledger. Blokusign offers the same frictionless experience as existing electronic signature applications, while supplying better authentication and record keeping through blockchain technology.

Consumers can use Blokusign without having to learn any new behaviors.

Incumbent electronic signature systems rely on centralized organizations to maintain, manage and authenticate documents, which is an unreliable, time-consuming and potentially expensive process that leaves parties at the mercy of e-signature companies which by JAMES SOWERS may be unresponsive or unable to locate records. Blokusign decentralizes all these tasks, allowing users to authenticate and prove the providence of 44

a signed document immediately. The full platform is expected to be up and running by the end of the year or early next year. While Ethereum was the first platform on which Sagewise launched, they have also started working on Hedera Hashgraph and are open to other platforms as well.

Founded in 2017, Sagewise is a technology company focused on the efficient resolution of disputes involving smart contracts. Sagewise has developed a product comprising a smart contract safety net for blockchain users. The company’s proprietary SDK, released in April 2018, provides the tools and infrastructure needed for the effective handling of disputes at any stage in the development and execution of smart contracts, freezing contracts in place while they are being resolved. Sagewise’s mission is to provide peace of mind to all parties to a smart contract, ensuring that the outcome of a blockchain endeavor is consistent with the parties’ true intent.

Sagewise is currently focusing on five use cases – supply chain, financial ser-

vices, digitized assets, consumer marketplaces and ICOs. These are high impact areas where solving smart contract challenges could lead to high adoption.

Sagewise’s vision is to build a fully-functioning plugin solution that allows smart contract users to achieve their true transactional intent, including the ability to resolve the disputes that will inevitably arise around smart contracts as they are bound to arise from any form of human interaction. Sagewise can “freeze” a smart contract in place while disputes are mediated. It can devise several forms of resolution depending on the preferences of the parties involved and on whether dispute resolution was built in to the original contract. Our goal is to provide peace of mind and the expectation of an equitable outcome for blockchain transactions – a toolkit to make sure smart contracts are doing their jobs. The safety net provided by Sagewise is intended to grow into a full suite of capabilities that will be indispensable as the crypto space expands. Disputes around to-

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ken offerings are a problem; disputes around smart contracts that underpin entire supply chains are a crisis. We are building a platform that addresses the enormous future of blockchain, a future in which broad mainstream adoption is a reality and the integrity of contracts is paramount.

Sagewise has always been platform-agnostic and is open to using other blockchains outside of Hedera Hashgraph and Ethereum. Their technology is a middleware layer solution that provides infrastructure for smart contracts, which enables them the freedom to work interpretably with a variety of other blockchain protocols.

of the Year Award 2015 by LA Business Journal. Amy has also worked in international regulatory and trade policy at the U.S. Department of Commerce and was a Presidential Management Fellow at the U.S. Department of State and U.S. Department of Transportation.

She holds an LL.M. in Public International Law from the London School of Economics and Political Science, a JD from the University of Southern California Gould School of Law, and a BA in Biological Sciences from the University of Southern California.

Daniel Rice is the company’s Chief technology officer and Co-Founder. Daniel is a veteran software engineer and team leader with expertise SO, WHO IS BIONIC AMY? in blockchain and finance. PreviousAmy Wan is Co-Founder and CEO of ly, Daniel was CTO for Totum Risk, a Sagewise, a dispute resolution infracompany that provides portfolio anstructure for smart contracts. Previous- alytics software, and was selected for ly, she was a Partner at a boutique seYNext incubator in 2016, which was curities law firm and General Counsel awarded “top accelerator” honors by at a real estate crowdfunding platform. Finance Magazine. Daniel has helped Amy is also the founder and co-organiz- launch over 20 products, and as an ener of Legal Hackers LA, which programs trepreneur his apps have had over 5 around the intersection of law and Million downloads. In addition to betechnology; was named one of the one ing Co-Founder of Sagewise, Daniel has of ten women to watch in legal technol- founded Bitcoin Developers Los Angeogy by the American Bar Association les and Orange County CTO Forum.

Journal in 2014; and was nominated as a Finalist for the Corporate Counsel Sagewise has many notable advisors also!

Disputes around token offerings are a problem; disputes around smart contracts that underpin entire supply chains are a crisis.

Terrance Yang of Yang ventures Terrance is a Quora Top Writer & Quora Top Question Writer. Mentor Plug and Play Bitcoin accelerator, Alchemist, and Caltech FLoW. COO of crowdsourced content startup Infobitt. Vice President, Director, Senior Counsel at Morgan Stanley & Merrill Lynch. Managing Director @ $1B+ fund. JD Harvard Law School.

Ken Nguyen founder of Republic Ken is a Serial Entrepreneur & Legal Hacker. Co-Founder & CEO @Republic· General Counsel @AngelList. @Berkeley @Bu @Oxford @Stanford!

Colin Rule Colin is the former head of dispute resolution @ eBay/PayPal. Serial Founder of online dispute resolution (ODR) providers. Frequent author in ODR topics; 25 years’ experience in dispute resolution. National Center for Technology and Dispute Resolution Advisory Board Co-Chair.

National Institute for Dispute Resolution. Consensus Building Institute.

MA conflict resolution & technology @ Harvard University Kennedy School of Government.

Checkout Blokusign https://www.blokusign.com

Disclosure: The author is an investor in the company.

Disclaimer: Please review this case purely on its merit and proceed only if you are convinced or interested. I am just connecting you. Also, I do not encourage folks from the USA, China etc. to invest in an ICO unless they speak to their lawyers. I only support genuine good people doing.

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Crypto Exchanges for Beginners For those just getting started in the world of crypto investment, the process can seem complex and daunting. With a wide range of industry-specific terms and alien sounding investments just where do you get started? Here is a handy guide to taking your first steps into crypto and reviews of some of the exchanges you can use: WHAT IS CRYPTO? A cryptocurrency is a currency that exists purely digitally. To verify that coins are genuine, that privacy and security are protected and to ensure that a limited supply of new coins can potentially be minted, these currencies take adby ICO CROWD vantage of cryptography (mathematical rules). The appeal of these currencies centers around the fact that there is often no central issuing authority or government to interfere with the money supply. The most popular crypto coins are Bitcoin and Ethereum.

Although there are a range of ways to trade cryptocurrencies, this process is often carried out via a cryptocurrency exchange. These exchanges are platforms that allow you to buy and sell a range of digital currencies with Euros, Pounds, Dollars and other digital assets.

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There are a range of exchanges out there some of which are open to the public and some of which offer a more exclusive or invite only. Some are truly international and others are more localized. They vary greatly in ease of use, functionality and some even have the facility to transfer crypto through built-in chat features like Telegram.

PICKING THE BEST CRYPTOCURRENCY EXCHANGE Depending on your trading needs will greatly affect your choice of cryptocurrency exchange. Here are some of the key features you will need to keep in mind when picking a cryptocurrency exchange: Fees Exchanges have to make money and as a result, almost all of them charge fees in the event you wish to do business on their platform. You should do your research before committing to a specific exchange making sure you understand their charging structure.

Security and ID Requirements Most exchanges require at least some form of identity verification, be this a driving license, passport, recent utility bill or connection to a bank account

before you can trade on it. As a rule of thumb: the more stringent the identity verification process the more reliable and secure the exchange is.

Exchange Rates Not all exchanges are created equal and often the price of a crypto can vary significantly between exchanges. The price of a crypto on any individual exchange can be as important to profit or loss as exorbitant exchange fees.

Reputation Whilst some relatively unknown exchanges may seem to offer the world in terms of functionality, available currencies, and low fees - they also come with increased risks. It is best to stick with one of the top exchanges if you want to minimize the risk of losing your investment through fraud or a hack attack.

Some of the top exchanges have now struck deals with insurance providers to protect customer assets in the event of a catastrophic attack.

Location If you wish to be able to transfer funds out to your local bank it is important that you find an exchange that operates and supports your geographic region.

Some exchanges focus on the United States others in South America or Asia.

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Make sure that you can transfer funds ble install an app like Authy or Google out into your local currency for the best Authenticator. The mobile phone option results. that texts you a code is not as secure as you might think. There have been a Security number of sim-swap attacks allowing a Choosing a secure site is an absowould-be hacker to co-opt your phone lute must. Exchange hacks occur frenumber and gain access to your account. quently and this year alone there has Even the cybersecurity expert and crypbeen around $1 billion US dollars stoto enthusiast John McAfee feel victim to len from exchanges in hack attacks. No- this kind of attack. table attacks include Mt Gox and Coincheck.

COINBASE Coinbase is probably the most trustYou should remain constantly aware ed of cryptocurrency exchange platthat when your funds are held inside forms around. It is one of the largest an exchange that you do not have com- digital asset exchange platforms in the plete control over the coins in your exworld. Their platform supports around change wallet unless you are in posses- 30 countries (mainly in Europe) and sion of the private keys. With most ex- has over 20 million registered users alchanges, you are trusting the exchange though some reports suggest that the to keep the private keys safe from hack- active user base is much smaller and ers and other bad actors.

Coinbase has a lost significant amount of traders since Bitcoins all-time high You should never keep more in your ex- price. Traders on the platform can buy change account than you are prepared and sell Bitcoin, Bitcoin Cash, Litecoin, to lose. In the event you are planning to Ethereum and Ethereum classic on their hold (or hodl) a certain cryptocurrenplatform. There are multiple methcy for a prolonged period of time you ods of funding your account from bank should probably consider keeping your transfer to secure credit card depending private keys in cold storage (offline), for on your geographic location. Users reextra security you can use a hardware quire a link to a valid bank account in orwallet to secure your funds. It should be der to start trading and you will have to noted that your exchange account and register a photographic ID with them. wallet should never be your primary Coinbase has been accused of having wallet, it is not intended to do that. high fees compared to some of its rivals.

You should also take advantage of all the added security features on the site. Turn on two-factor authentication. If possi-

Once registered with Coinbase you are able to use Coinbase Pro. Coinbase Pro has more advanced trading features

such as margin trading and market, limit and stop orders. It also has lower fees than Coinbase.

Although there are a range of ways to trade cryptocurrencies, this process is often carried out via a cryptocurrency exchange. These exchanges are platforms that allow you to buy and sell a range of digital currencies with Euros, Pounds, Dollars and other digital assets.

Coinbase has recently announced they are investigating supporting new coins such as Stellar and BAT tokens. Although no timescale has been given for this move.

BINANCE Binance is a relatively new exchange but has grown to have one of the largest daily trading volumes in a short space of time. Its key benefit is that it has a wide range of cryptocurrencies available to trade with and has both a basic and advanced view depending on your level of skill. It is credited with having low fees and they will allow you to withdraw up to 2 Bitcoins per day without photo identification.

Binance does not support any form of fiat currency transfer in or out of the site.

Binance have issued their own utility token that can be used to pay transaction fees and provides a discount KUCOIN KuCoin is a new exchange based in South Korea. They have a similar operating strategy to Binance. They list new alt coins very quickly meaning it is an ideal place to purchase cryptocurrencies just after ICO’s have occurred allowing the potential for greater profits 47

APRIL-MAY 2019

by getting in early. The interface is easy to use and very clear.

KuCoin also has their own token (KCS) which allows holders to receive a share of the profits of the platform. By holding this coin you receive a fraction of each of the different currencies that people have traded with on the site.

Coinmama does not provide a platform for trading in cryptocurrencies nor does it allow users to sell cryptocurrency. Instead, all purchases of cryptocurrency by customers are transferred directly from the company’s own holdings, making transactions more secure than some of its competitors. Users can acquire up to $5,000 US dollars of coins per day or up to $20,000 per month.

Always pay special attention to the security, fees, reputation, LOCALBITCOINS LocalBitcoins is a slightly different type Users were previously not required to and ID verificaof cryptocurrency exchange. Due to the upload a government issued ID but tion processes nature of how it works it operates in althey are required to verify a phone most all cities around the world. The number and email address. But this has that sites offer and remember idea is that rather than trading anonnow changed. ymously on an exchange that you can that geographifind people who live near you and meet CEX.IO cal location can them in person to perform an exchange. CEX.IO is one of the first cryptocurrenalso play a big You can also use their escrow facility to cy exchanges. It’s a London-based exdo bank transfers knowing that the 3rd change founded in 2013. It can only be part in the risk parties bitcoins will be held in a Localused to buy Dash, Bitcoins and Ethere- posed by a crypBitcoins 3rd party account whilst the um. There are extensive ID verification tocurrency extransaction is completed. Registering, requirements and you can make purchange. buying, and selling Bitcoin is completely free. LocalBitcoins users who create advertisements are charged a 1% fee for every completed trade.

chases with credit cards, debit cards, wire transfers or SEPA transfers.

The service is not available in multiple US states, only supporting 24 states.

Traders are given a star rating in the same way as Uber. Both buyers and sell- The platform has been accused of ers are rated and you are expected to charging exorbitant fees of up to 7% of rate each other each time you perform the transaction cost. a trade.

Once you start a trade the platform calCOINMAMA culates the price of the transaction and Coinmama is a large Bitcoin brokerage freezes the exchange rate for two minthat enables people to purchase cryputes. tocurrency with their debit or credit cards. Coinmama is registered in Slova- BITTREX kia but is owned by New Bit Ventures Bitrex is an established cryptocurLimited that is headquartered in Israel. rency trading platform. It is some48

times criticized for its complex interface but this is due to the number of things the platform can do. One of the site’s major strengths is the depth of the variety of its crypto listings.

Bittrex currently lists hundreds of coins and also offers users hundreds of cryptocurrency trading pairs, with the site showing over 450 BTC pairs.

The site is let down by the fact that it does not offer fiat to crypto pairs to the average customer. Users can purchase Bitcoin, Ethereum, or USDT via bank wire transfer. For this to take place an “enhanced verified” account is necessary along with a purchase amount worth a minimum of $10,000 US dollars.

CONCLUSIONS Picking the right cryptocurrency exchange varies depending on your needs as a trader. All the exchanges listed above have slightly different value propositions and you may need to register with more than one.

Not only does this spread the risk but opens up the unique trading options across multiple platforms. Situations can change rapidly in the world of crypto and it is always a good idea to keep up to speed on news and rumours regarding specific exchanges.

Always pay special attention to the security, fees, reputation, and ID verification processes that sites offer and remember that geographical location can also play a big part in the risk posed by a cryptocurrency exchange.

APRIL-MAY 2019

Fake Goods and Blockchain The counterfeit goods industry is huge.

Some estimates place the size of the industry at $1.2 trillion US dollars per year.

The International Chamber of Commerce predicts that the “negative impacts of counterfeiting and piracy are projected to drain US$4.2 trillion from the global economy and put 5.4 million legitimate jobs at risk by 2022.”

Between 2008 and 2013, the Organisation for Economic Cooperation and Development (OECD) and the European Union Intellectual Property Office (EUIPO) studies showed an 80% increase in counterfeit products in international trades. This is partly due to inby creased activities in online retail sales ICO CROWD worldwide. It has become much easier to supply fake goods on a large scale as the digital age has created larger sales channels such as Amazon and eBay.

argued that the counterfeit market in some ways fuels the luxury goods market, perpetuating the cycle of consumption. What at the start of the year could be considered a unique fashion item may lose its appeal as cheap imitations start to flood the market - thus creating the impetus to make further luxury purchases.

Whilst not offering a complete solution to the counterfeit good market, blockchain can play a role in determining the provenance and genuineness of luxury goods.

There are other ways that luxury goods manufacturers can help disrupt the counterfeit goods market. Quite often consumers simply do not feel that they are doing anything wrong by purchasing counterfeit goods due to the expense and unattainability of the original luxury item. Unlike counterfeit pharmaceuticals, there is little potential harm to the end consumer if you have a counterfeit handbag, at worse it might fall to bits because of its low quality.

Luxury goods manufacturers now have the possibility to reward purchasers of genuine goods to incentivize them to make authentic purchases and allow said purchasers to use their reward as a status symbol and marker of the legitimacy of their product.

It is not just counterfeit luxury goods that are an issue. The counterfeit pharmaceutical market is now responsible for around 1 million deaths per year, in an industry estimated to be worth around $75bn annually. The counterfeit medicine industry is Luxury Brands are quite ofestimated to be growing at ten separated from the mantwice the rate of legitimate ufacturing process and can ...“Negative im- actually find that the same pharmaceuticals, making it Big brand names are the ones that suf- up to 25 times more lucrapacts of counter- factories they employ to crefer the most from the counterfeit goods tive than the global narcotfeiting and pira- ate their goods can, in fact, ics trade. be involved in the countertrade. Whether it be jeans, handcy are projected feiting processes that they bags, watches or handbags if there are to drain US$4.2 are aiming to stop.

The most obvious solution high-value luxury goods there has altrillion from the that blockchain can offer is ways been a vibrant counterfeiting into redesign and make more dustry stealing revenue from the proglobal economy By utilizing on-demand mantransparent the supply chain. and put 5.4 mil- ufacturing and by ensurducers whilst offering a substandard The ability to store a coming that the machines proproduct to end consumers. lion legitimate plete history of all parts of ducing the product are autojobs at risk by the manufacturing process mated and integrated with a Last year the federal government in and trace a product's moveblockchain network a brand New York seized counterfeit luxury 2022.” ment across the globe can can order a specific amount goods valued at around $500 million of units to be made. When the contract US dollars. A wide range of belts, purs- guard consumers and retailers against is executed the machine is unlocked for es, and handbags were seized that were both counterfeit and stolen goods. the precise amount of goods required designed to look like goods by GucThe ability of an end consumer to check to be produced and then can be reci, Tory Burch, Hermes, Coach, Burbthis information from anywhere in the locked until it receives another secure erry, Michael Kors and Louis Vuitton. world using a computer or smartphone order for the company.

There was some knockoff Chanel permeans that we have the capability to fume seized too, which concerned investigators since previous schemes had put consumers in a more informed po- It is unlikely that even with all of these sition when making a purchase. This steps combined that the counterfeit involved using animal urine instead of ensures not just that the product is not good industry will ever completely disthe perfume company’s formula. counterfeit but it allows consumers to appear. The only real way to stop that would be if the desire to own counThe mark-ups and huge amounts spent make more ethical decisions regarding their purchases. Garments, for exterfeit goods were to disappear. But on advertising in luxury goods make ample, could be checked to ensure that through the innovative use of blockthem prime targets for counterfeitchain, we can minimize the US$4.2 trilers. Although the relationship between at no point in the supply chain were sweatshops used. This can help bring lion this illicit trade is expected to drain counterfeit and luxury goods is comfrom the global economy. plex and multifaceted. It could even be an end to modern day slavery.

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APRIL-MAY 2019

Airdrops

Bitcoin was born out of the financial crisis and at least in its early days it struggled with mass adoption. In February 2014 a developer building on Nakamoto’s vision decided to make a coin to help his very countrymen escape the shackles of post crisis capital controls in his home country of Iceland. The problem was how to distribute the new currency to his fellow Icelanders.

The developer going by the pseudonym Baldur Friggjar Odinson decided to issue 31.8 of them to each of his fellow countrymen by giving them to anyone on Iceland’s national registry of citizens, and thus the crypto airdrop was born. by ICO CROWD

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Initially the project was a success. Buzz around the coin saw its price rise by over 1000 percent, making it the third most valuable cryptocurrency at the time. The enthusiasm soon wore off and the price tanked. Early recipients cashed out at the high prices which cre-

ated the headlines and everyone else was left holding a worthless coin.

Were the motivations for the first airdrop sincere? Or was this the foundation of a national scale pump and dump? Whatever your opinion, airdrops are now here to stay. The idea has recently gained new attention across crypto media sites with the attention brought by the $125 million Stellar Lumens (XLM) airdrop in association with wallet provider Blockchain and a dubious offering of great wealth via a company called Initiative Q. ARE AIRDROPS A CONSTRUCTIVE WAY TO PROMOTE USAGE OR DUPLICITOUS SELF-ENRICHMENT SCHEMES? This question depends heavily on the role that community development plays in a project. It depends on who pays for it and how much they stand to gain from it.

Peter Smith, Blockchain CEO, praised the Stellar network for being "built for

scalability" with "an active and growing ecosystem," and said the lumen airdrop would put "users first" so they can "test, try, trade, and transact with new, trusted crypto assets in a safe and easy way."

Stellar Development Foundation co-founder Jed McCaleb focused on the instant network effects from expanding Stellar as a tool for communities to issue assets and design new models of value exchange. By leveraging Blockchain's approximately 30 million wallets, he stated, "we will increase the network's utility by many orders of magnitude."

Other’s weren’t so sure about the explanations given instead seeing it as a scam for Blockchain to increase their wallet usage whilst building a huge marketing database of personal information due to the know-your-customer requirements to qualify for the airdrop.

InitiativeQ is a curious company that are offering free Q’s to anyone who signs up with an email address or so-

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cial media account. The site equates Q’s to dollars and gives away hundreds of thousands of Q’s to anyone who refers 5 friends. When you sign them up you are given the option to sign up even more. It is being reported that over 4 million people have already signed up for free Q’s. It should be noted that Q’s are not even an actual cryptocurrency and that at this stage the network does not actually exist. What InitiativeQ has done successfully is compile a vast database of people susceptible to get rich quick schemes and the social links between them. The idea is at best vague and infrastructure non-existent, but the marketing has worked superbly.

If we consider airdrops as a marketing expense rather than a dilution of the currency or inflationary force. The benefits of network effects through increased adoption are clear for all to see and achieving this was always going to require some marketing. Currencies with no users are worth nothing and achieving widespread usage is always going to cost.

All currencies have a brand and the success of that brand is heavily dependent

upon how well those with an interest in it promote its value as a store of value or medium for exchange. With fiat currencies governments are essentially in charge of marketing and promote the strength of their economy as a reason to use their currency amongst citizens and non-citizens alike.

All currencies have a brand Many traditional tools within Keynesi- and the success of that brand is an economics such as welfare distribution and quantitative easing could be heavily dependconsidered airdrops of sorts. The idea ent upon how being that the increased money supply well those with will make additional benefits flow to the government. With cryptocurrencies an interest in it promotional responsibility is shifted to promote its valmembers of the community. ue as a store of value or meAs bitcoin rose, early adopters were dium for exaware they would benefit from inchange. creased adoption and many freely distributed them to newcomers via processes like Bitcoin faucets.

InitiativeQ and Blockchain have come under criticism because of their vested corporate interests in gathering data.

However, most actions in the world of crypto are based on vested interest and you are being paid in tokens for your

data. Stellar Lumens already have a proven market value, but Qs do not.

Cryptocurrencies are a network product.

Its utility is directly correlated to the size of the network. Beyond the products functionality it needs to achieve a critical mass of users to benefit from network effects and this depends on mass communication of the idea.

Loss leaders and corporate marketing budgets exist for a reason. Companies are willing to pay a huge price for favourable awareness of their product or service. If we consider airdrops this way, they start to make more sense.

There are good reasons to be wary of corporate centralization. Airdrops also bring with them scams that could set back some of the progress made by cryptocurrencies. I remain vaguely positive about the Blockchain Stellar Lumens airdrop but highly sceptical about InitiativeQ’s.

When trying to answer the question: Are airdrops good or bad? The answer seems to be: It’s just not that simple. They have both positive and negative effects.

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APRIL-MAY 2019

Are New Stablecoins Stealing Tethers Crown?

Tether holds the crown as the most prolific and widely traded stablecoin. It is pegged to the value of the US dollar with a one-to-one ratio.

However, a range of alternative dollar pegged stablecoins with different implementations and strategies have been issued recently and they often trade at a premium to Tether. As these stablecoins make their way onto the high volume exchanges these new regulatby ed currencies are threatening Tethers ICO CROWD crown.

Gemini, Paxos and Circle have all recently launched their own asset-backed stablecoins. These tokens are backed by physical assets stored in company controlled bank accounts. Early indications are that traders seem to prefer these to Tether.

All of the above-mentioned companies have received regulatory authorization to operate in New York from the New York Department of Financial Services 52

which is considered by many to be one of the strictest regulatory authorities in the United States.

The mentioned firms have achieved different levels of regulatory authorization. Gemini and Paxos have both received NYDFS charters and Circle has managed to obtain the coveted “BitLicense”. The market appears to have taken into account the regulated status of these coins and it is reflected in the premium that buyers are paying to hold these coins.

At the time of writing Tether is the tenth largest cryptocurrency by market capitalization with a market cap of $2.0.6 billion. With a daily trading volume of $17 billion US dollars, it is currently the second most liquid cryptocurrency behind bitcoin.

The issuers of the new stable coins have publicly touted that their tokens are regulated financial instruments. Tether, however, has reportedly received a subpoena from US regulators in rela-

tion to the secret nature of where they are keeping their dollar reserves.

It was reported but not proven that Tether is or has been holding its reserves in NBI, a Panamanian based non-fractional lending bank. However, recent changes to Tethers terms of reserves have brought into question the nature of their reserves with they are currently holding with their updated terms not stating the reserves are held in fiat: “Every tether is always 100% backed by our reserves, which include traditional currency and cash equivalents and, from time to time, may include other assets and receivables from loans made

by Tether to third parties, which may include affiliated entities.”

WHEN A DOLLAR IS NOT WORTH A DOLLAR As new stablecoins entered the market late last year they began start to achieve respectable levels of liquidity on crypto exchanges it seems that their

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regulatory approval and lack of controversy caused them to trade at a premium to Tether.

On the 15th of October, the USDbacked stablecoin Tether (USDT) fell below $0.90 on Bitfinex as concerns over its reserves forced traders to buy Bitcoin and other digital assets. At the time of writing, Tether is now trading at approximately $1.

Medium blog he suggests that this may be the best outcome for all involved.

He suggests that Tethers recent issues are something that its competitors can use to their advantage. Tether had almost completely cornered the market when it came to a dollar pegged cryptocurrency and was in such a strong position it seemed that it would have required either insolvency for it to lose its crown or governments would need to regulate it out of existence.

Every tether is always 100% backed by our reserves, which include tradiIMPLODING OR WINDING DOWN? tional currency Some people have claimed that Tethand cash equivers recent bad press was a result of Hasu speculated that Tether is slow“weaponized FUD” and others have ly exiting the market and that the mas- alents and, speculated that the companies lack of sive transfers of USDT are a result of from time to transparency regarding its dollar back- the company buying up coins at a distime, may ining could suggest it is insolvent. Cryp- count and then destroying or retiring clude other astoslate has reported that Tether has them. He postulates that they are then sets and receivremoved almost half of the USDT in crediting themselves the value of the ables from loans circulation and burned them. Is this a coin. This practice is also employed by sign that the company is imploding?

Wall Street, who buy back stocks when made by TethOr could it just be that they are wind- they believe them to be trading under er to third paring down? their true market price. ties, which may include affiliatOne theory put forward by an indeTether could potentially make many pendent researcher called Hasu suggests millions by removing the discounted entities.” that Tether might be selling off assets in preparation of winding down. On his

ed USDT from circulation and realizing their full fiat value.

Hasu states: “Even if we assume that $200M was withdrawn by non-Tether traders, that would mean Tether still managed to buy back $600M worth of tokens. With a 3–5% discount, this buyback made them between $18M and $30M.” In his article, he discusses the attention surrounding Tether and its subsequent price decline. He suggests that it has provided the “external shock” required to dethrone Tether. If Tether is exiting it will clear the path for the plethora of new stablecoins that have hit the market.

At the time of writing 2.06 billion USDT remain in circulation. If this amount continues to drop it will add credence to Hasu’s theory. If Tethers creators are not slowly exiting the market then the last few weeks should act as a wakeup call to them. If they are going to survive and compete with regulated stablecoins then Tether is going to have to become much more transparent and potentially open itself up to be audited and prove that it is not insolvent. Only time will tell.

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APRIL-MAY 2019

Bitcoin Jobs up by 300%

2018 saw a significant correction in the crypto market and a lot of regulatory uncertainty. The market is down over 80% from the dizzying highs seen at the end of 2017 and the start of 2018.

The days of giant ICO’s seem to be over at least for now and whilst we may be seeing some signs of the green shoots of recovery the market remains in the doldrums. However, there is one important metric that is showing incredible growth, that of blockchain based by ICO CROWD jobs. The demand for these has increased significantly showing that businesses remain convinced of the benefits of blockchain technology.

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Data collected by job portal Glassdoor shows that traditional companies have significantly increased hiring for blockchain and associated jobs. After collating data regarding millions of jobs they found 1775 job openings in the United States along. The 2018 figures are a 300 percent increases compared to the 2017 figures. The terms they used to filter the jobs included “Bitcoin,” “cryptocurrency,” and “blockchain”.

Blockchain job salaries are comparable to what developers who specialize in another high-demand field, artificial intelligence. In the United States the average salary for these jobs is $84,884 per year. This is $32,423 higher than the countries average. As a result of the

diverse mixture of jobs available, salaries range from $36,046 per year all the way up to $223,667 per year. Most jobs were found to be technical in nature, such as development rather than management, analyst or trader. Nineteen percent of all positions were for software engineers followed by more specialised positions such as front-end engineer or technology architect.

The fact that more traditional finance roles like traders and investment analysts don’t feature in the top 15 occupations could perhaps point to a focus on the non-financial applications of blockchain technologies or maybe, the hesitance of more traditional institutional investors to break into the cryptocurrency space.

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“There’s a ton of demand for blockchain. Software engineers are in very short supply, but this is even more acute and that’s why salaries are even higher,” Hired’s CEO, Mehul Patel, told the business news TV channel.

ings respectively whilst crypto-centric PR firm Wachsman has 15 positions available. Some big technology companies like Oracle are also expanding their blockchain teams, though major technology companies like Facebook, Google and Apple are notable because of their absence.

There’s a ton of demand for You can also find some more tradition- blockchain.

Software enal Financial and Tech giants on the list such as J.P Morgan, Oracle and Accengineers are in The two hotspots in the United States ture with 17, 37 and 26 vacancies revery short supfor blockchain based employment opspectively. IBM tops this list and has ply, but this is portunities were the financial and tech the same amount of vacancies as Coneven more acute capitals, New York City and San FransenSys with 214 job vacancies. cisco. Between them they accounted for and that’s why 24 and 21 percent of all total job open- Blockchain and the cryptocurrency sec- salaries are ings. San Jose had 6 percent, Chicator in general is starting to attract sigeven higher.”

Many positions with startups that issue tokens are also offering tokens to their employees as well as or instead of a salary.

go had 4 percent as did Seatle. Internationally financial hubs such as London, Singapore and Hong Kong listed the most blockchain related job roles.

55 percent of the job roles were for engineering positions which suggests that there is a significant demand for highly skilled workers who can advance the blockchain industry.

Some businesses are clearly experiencing significant growth, or at least betting on it. Ethereum incubator ConsenSys Labs has 214 job vacancies in bitcoin even though it currently has less than a thousand employees. Coinbase and Kraken have 63 and 37 job open-

nificant interest from high-net-worth individuals, major corporations and venture capitalists. This is one of the reason behind the growth of the blockchain sector.

Whilst crypto started off as a method of circumventing existing financial systems and rules and has always appealed to enthusiasts of privacy and libertarianism, as the sector has matured so has the degree of professionalism. Many blockchain companies now boast expensive office space in premium locations.

Some of the most in demand programming languages required in the blockchain technology field include

Go, Python, JavaScript and Java. The C++ programming language, which is the language used to code the most commonly used client of bitcoin, Bitcoin Core, is also considered fundamental. Solidity, the language created by the Ethereum project team specifically for writing smart contracts, is also a key requirement in the blockchain sector.

CONCLUSION Currently the cryptocurrency industry is young and it is vulnerable as a result regulatory uncertainty, especially in the United States. Price volatility is also a threat that could derail growth. Many in the industry have had grave concerns as the crypto market has corrected. Having dropped MEHUL PATEL over 80 percent from its all time high.

Hired’s CEO However, if you focus on these short term trends you can often fail to see longer-term trends. The volatility of the market in the short term is not as strong an indicator of cryptos future as is the significant investment in human capital some companies are making.

The fact that all sizes of companies are investing in blockchain and expanding hiring bodes well for the sector as a whole. The fact that salaries exceed those of the average for the sector is a strong indicator of a long term investment in blockchain technology.

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APRIL-MAY 2019

Crypto Mergers and Acquisitions Last year was a bad year for crypto. Many ICO’s saw the funds they raised massively depleted by the drop in the price of Ethereum and the crypto market in general.

ing players in the crypto world and others are traditional corporate entities that are essentially buying their way in to the sector.

Satya Bajpai of JMP Securities says: “As soon as a company becomes interesting, they get bought — the deal size Another issue has been that even ICO’s may still remain small, but the number whose fundamentals are good and are of deals will increase because that’s the profitable have seen their token prices fall in line with bitcoin, dragged down by most viable and fastest way to grow in this environment,” overall market sentiment. This strange situation has created the perfect climate Those with cash to spare who are lookfor a spate of mergers and acquisitions. by ing for a deal have been undeterred by ICO CROWD the state of the crypto-market and are The crypto industry is in the midst of instead fueled by the desire to bag a bara “land grab” for innovative technologain. gy and access to new markets as conditions are ripe for strategic acquirers.

Through these mergers and acquisitions Mergers and acquisitions have hit refirms with can get new intellectual prop- cord levels in the crypto world in spite of the ongoing bear market that dogs the erty and onboard talented employees. sector.

Some of these acquisitions are by exist-

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Data from PitchBook suggests that the total amount of blockchain and crypto-related deals increased by an impressive 200 percent at an annualized rate last year alone. This occurred in conjunction with a 54 percent loss of value for bitcoin.

Data suggests over 115 deals involving cryptocurrency or blockchain were announced and was on track to hit 145 by the end of 2018. The count is up significantly from the 47 total deals completed in 2017 when bitcoin's price was at its all-time high of almost $20,000.

Data regarding the size of the deals are scarce as most have occurred behind closed doors. However, JMP Securities has stated that the majority of transactions are global in nature and “relatively small” with the average deal being less than $100 million US dollars.

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The correlation between the price of Bitcoin and alt-coins at large is the primary driver behind the dramatic increase in mergers and acquisitions. With the market cap down over 65 percent and trading volumes down around 55 percent some recent startups are being seen as significantly undervalued. The so-called “crypto-winter” has created a disconnect between value and valuation especially for early-stage companies.

Although Bitcoin has just had its tenth birthday. The concept of the ICO has only really taken off in the last four years. It is a quickly changing nascent industry and buyers seem to have decided that purchasing an undervalued startup represents good value not only because of the low price but because it negates the need to start from scratch.

Late entrants to the world of crypto can simply buy their way in on the cheap at the moment.

"It's expensive, but you get the technology and product immediately," Bajpai said. "This industry is like a treadmill — the only way to keep up on a treadmill is to keep running by investing in new technology."

In the current market, talented blockchain engineers are hard to come by and it can be even more difficult to find employees that possess both business and technical backgrounds. When you purchase a going concern you can hit the ground running rather than having to waste valuable time and resources setting things up from scratch.

As soon as a company becomes interesting, Bajpai of JMP has pointed to Coinbase buying Earn.com, which lets usthey get bought ers send and receive digital curren— the deal size cy for replying to emails and completing tasks. As a part of that deal, Earn's may still remain small, but the founder and CEO became Coinbase's first-ever chief technology officer. number of deals will increase Communities and users are anothbecause that’s er valuable part of the strategy. Companies have found they are able to add the most viable and fastest way users, which is a key part of any tech start-up's valuation, almost immedito grow in this ately through an acquisition. environment.”

Attempting to work out the valuation of some of these startups can be a complex process, especially when that company has raised its capital through an initial coin offering. If the company has sold utility tokens then the hold-

ers of this are expecting a promise of future use of the platform or some sort of payoff. Whilst institutional investors may see value in buying a startup's associated utility token they are much more likely to want an equity stake in the aforementioned business.

A lot of these acquisitions are occurring before the companies in question have been able to prove themselves in the free market. As soon as a company becomes interesting it will attract the attention of investors regardless of if it has made a profit or even proven its utility case. As long as crypto remains in the doldrums it would seem that the amount of these mergers and acquisitions is going to increase even though the deal sizes will remain small.

What is not beyond possibility is that a large player in Silicon Valley will make a play for a crypto-giant.

SATYA BAJPAI Is Facebook or Amazon purchasing JMP Securities Coinbase such an outlandish idea? If we start to see mergers and acquisitions of players on this scale it will almost inevitably result in a brand new crypto bull run.

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APRIL-MAY 2019

Does EOS Have a Cartel?

EOS is a blockchain platform designed to support decentralized applications or dApps. It is very similar in its function to Ethereum and some have even dubbed it as the Ethereum killer. It provides an operating system like set of services and functions which the dApps built on it can make use of.

EOS claims to bring together the best features of the various cryptocurrency offerings to provide a smart contract platform with the security of bitcoin and computing support of Ethereum. The EOS community is working to provide one simple to use, massiveby ICO CROWD ly scalable dapp platform for the everyday user.

EOS held the largest ICO to date and raised over $4 billion in ETH over the period of a year. EOS is sometimes dubbed “Chinese Ethereum” due to the great interest from Chinese investors.

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Other than Ripple and Bitcoin Cash, EOS is probably one of the most controversial big players in the crypto space. Opponents of EOS have in the past argued that the project is heavily centralized due to its implementation of a delegated Proof-of-Stake consensus mechanism that uses only 21 block producers to verify transactions. Many have also been highly critical of the year-long ICO with opinions varying between negligent and greedy to even fraudulent.

The network has had a significant amount of bugs and flaws arise during its development leading many people to question how it could be so poorly implemented given the projects incredible budget. Even after the platforms mainnet was launched many bugs were still discovered.

A fresh controversy started to brew in November last year when evidence started to appear on social media showing a moderator reversing trans-

actions which the network had already confirmed.

According to posts made by Reddit user u/auti9003, a dispute allegedly involving a phished EOS account was referred to one of the platform’s so-called “arbitrators” who used his powers to reverse transactions that occurred without the owner’s permission.

The arbitrator, Ben Gates, referred to the EOS constitution as a basis for the decision. He wrote: “Under the powers afforded to me as arbitrator under article 6 of the Rules of Dispute Resolution, I, Ben Gates, rules that the EOS account in dispute should be returned to the claimant with immediate effect and that the freeze over the assets within the said account is removed.”

CTO Daniel Larimer himself spoke about the decentralized issue in an interview last month.

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“Decentralization isn’t what we’re after,” he told YouTube series Colin Talks Crypto, adding: “What we’re after is anti-censorship and robustness against being shut down.”

EOS has in the past frozen accounts that they suspected had been compromised through phishing scams.

On Reddit, responses to the alleged transaction reversal were plentiful and centered around the concept that without decentralization, EOS had failed to prove its use case versus other more traditional centralized structures.

“Why would anyone use this over a bank account and traditional legal system?” the most popular comment reads, adding: “These guys raised ($4 billion) to recreate the legal system using a token that is neither censorship resistant nor immutable.”

The EOS Cartel: Rumours have started to surface regarding a cartel behind EOS. There is evidence that suggests that a small group of block producers controls the entire EOS network. With thsi power the block producers have the ability to censor transactions, to blacklist people and ensure that they always remain in power. If this small network collude with each other they can completely control the EOS protocol.

Under the powers afforded to me as arbitrator under article 6 of the Rules of Dispute Resolution, I, Ben Gates, rules that the EOS account In order to understand how it is possible to centralize so much power with in dispute should EOS you need to consider how EOS be returned to is structured. At the heart of the netthe claimant with work are the parties that validate trans- immediate efactions. These are known as block profect and that the ducers or miners. freeze over the The block producers are not small scale assets within the said account is reminers. They manage industrial servmoved.” ers on a huge scale and this provides the majority of EOS’s computational power.

To keep things moving swiftly and so EOS can scale well there are only 21 accounts that are selected to be block producers. The number was chosen to ensure adequate decentralization, provide redundancy and allow competition between block producers to help discourage malicious behavior. The details of these servers are kept anonymous for security purposes.

Block producers are rewarding with a significant number of EOS tokens.

Over 10 million EOS tokens are distributed to block producers annually.

This is around $52 million US dollars a years. Not only are block producers rewarded, they are also given a great deal of control over the EOS network. Block producers have three primary responsibilities: • Vote to make updates and upgrades to the protocol • Neutralize malicious smart contract code • Freeze accounts which violate EOS BEN GATES governance laws 59

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There are an additional parties that are competing for positions as block producers. The top 101 accounts are considered standby block producers.

In the event a block producer does not produce a block for 24 hours a standby block producer should replace them in the next vote. Standby block producers are rewarded with 75 percent of the total block producer rewards and 25 percent goes to the 21 main block producers.

ever, this does not happen and only a tiny percentage actually do.

Block producers are decided through voting in a delegated proof-of-stake model. In this model participants use their tokens to select up to 30 accounts which they wish to be block producers.

Each of these accounts receives a vote equal to the total number of tokens the voter holds. Once every 126 seconds the votes are rechecked to generate the next set of block producers and standby block producers.

Only 25 percent of EOS tokens in supply actively vote. Once you get selected as a block producer or backup producers there is a strong incentive to vote for yourself to increase the chances of you being rewarded with more tokens.

This over time solidifies the position of incumbent block producers.

The voting system is designed to promote trustworthiness and immutability. The idea behind it is that malicious actors are voted out and replaced quickly with trustworthy ones. However, the system is flawed. For it to function correctly it requires most EOS holders voting and participating in elections, how60

Statistics from the EOS Authority show that only 39,000 EOS accounts voted in the most recent election. Some of which could be duplicate accounts controlled by one individual. The average voter is holding around 6,700 EOS ($35,000 US dollars). Active block producers recieve between 2,000 and 20,000 votes.

Etherscan statistics suggest that the top 100 EOS accounts own 75 percent of the one billion tokens out there and the top ten accounts own 50 percent of all tokens. EOS’s constitution prevent anyone from holding more than 10 percent of the total token supply although this still allows for a dangerous level of centralization and the rule is technically unenforceable due to the anonymous nature of accounts.

Decentralization isn’t what we’re after. [...]

What we’re after is anti-censorship and robustness against being shut down.”

The threshold to become a block producer is currently 92 million tokens.

Due to the concentration of tokens an account could secure its position as a block producer with relatively little resistance. The platform would be able to do little to hold a malicious block producer accountable should they act outside of the interests of the EOS ecosystem.

In September this year leaked documents from Huobi, a Chinese block producers showed that they were selling and trading votes with other block producers. It shows that Huobi voted for 20 block producers and 16 of them voted for Huobi in reDANIEL LARIMER CTO turn. There is also evidence that Huobi voted in a block producer for 150 EOS and 50 percent of any future returns. When this happened seven of the block producers allegedly had no public nodes, no website, no ownership information and no node interaction, all criteria necessary to become a block producer.

Although all of this runs contrary to the EOS constitution, not one of the accounts involved have been punished or removed which raises further questions about EOS’s governance.

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By looking at the voting patterns and examining the wallets of current block producers it is possible to work out the alliances within the EOS network.

Whist impossible to prove it seems very likely that some block producers are engaging in collusion.

Many votes cast by incumbent blocks are traded with other incumbents.

Huobi and Bitfinex can be seen to vote for themselves using tokens stored on each others exchange, it is not clear if users of the exchanges are aware that their tokens are being used for voting.

Cochainworld managed to become a block producers with only 2000 votes and an average vote weighting of 46,000 EOS ($240,000). The average amount of people who vote for a block producer is 14,000. The fact Cochain was able to make it on to the block producer list with so few voters suggests that those who voted for Cochain are either owned by Cochain or the votes have been bought from large token holders.

The incumbent block producers have the power to forever cement their position as heads of the network and if

there is collusion then they will work to maximise their own profits, potentially undermining the security of the network.

As block producers have the ability to blacklist and freeze accounts they have the power to shut down any opposition. If block producers collude and they freeze the right accounts their authority will never be questioned.

Block producers also have authority of EOS upgrades. 15 out of 21 block producers have to vote for a change for it to be enacted and if so it becomes EOS law. Block.one is generally the party that suggests changes but there is nothing to stop the block producers from introducing their own updates. With collusion they could vote to improve their bottom line at the expense of everyday EOS holders.

EOS has limited transparency and there are no guarantees that block producers are running the official client or correct software version. Security in EOS depends heavily on the social enforcement of the EOS constitution unlike most other blockchains which rely on algorithmic or cryptographic enforcement.

Brendan Blumer, the CEO of Block.one has posted on Medium vowing to combat collusion using the companies 10 percent stake in the EOS token supply.

These guys raised ($4 billion) to recreate the legal system using a token that is neither censorship resistant nor immutable.

reddit

He wrote: “We are aware of some unverified claims regarding irregular block producer voting, and the subsequent denials of those claims. We believe it is important to ensure a free and democratic election process within EOS and may, as we deem appropriate, vote with other holders to reinforce the integrity of this process.�

These concerns are just some of the latest in a long line of issues with EOS. Some of these are to be expected with such a large scale ambitious project like this, but until some of these issues are resolved it is unlikely that EOS will be able to steal Ethereum's crown.

To solve these issues the EOS community needs to come together to hold block producers accountable. The community needs to come together to vote and create new policies to hold those in power accountable to them otherwise EOS management will become a cartel that has a toxic effect on the network.

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APRIL-MAY 2019

Oxfam to Offer Crypto Microinsurance Oxfam’s programmes attempt to address the structural causes of poverty. They work through local accountable organizations and seek to improve their effectiveness.

by ICO CROWD

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Their stated goal is to help people directly, when local capacity is insufficient or inappropriate for Oxfam’s purposes, and to assist in the development of structures which directly benefit people facing the realities of poverty and injustice.

tions, and democratize access to reinsurance investments.

They have developed a protocol to collectively build insurance products for common infrastructure, product templates, and insurance license-as-a-service which all together make a platform that allows anyone to create their own insurance products. As a result, independent workers and risk capital providers earn a fair share of created value.

Currently insurance is highly asymmetric and large players dominate the market, reaping benefits from network effects.

The customers are in a weak position, they don’t understand policies and often feel treated unfairly or even ripped off.

Insurance companies have a strong incentive not to pay out claims. Tight regulation is needed to protect customers and keep this imbalance in place. This creates expensive overheads and barriers to enEtherisc's mission is to build an open protocol for decentralized insurance ap- try. Insurance companies are opaque tryplications, making it more efficient, en- ing to hide their inefficiencies. abling lower operational costs, providEtherisc are currently working on over ing greater transparency into the in20 products are being built from the dustry compared to traditional operaThey have adopted these overarching aims to express these rights in practical terms: 2 the right to a sustainable livelihood 2 the right to basic social services 2 the right to life and security 2 the right to be heard 2 the right to an identity

idea stage to production. The most well-known are: Flight Delay Insurance—regulated and licensed in the EU, sold worldwide, HurricaneGuard. io deployed on Ethereum testnet, Crypto-backed Loan insurance - To be announced! and DAO/smart contract insurance in design/prototyping.

Oxfam has teamed up with Etherisc in an attempt to bring affordable insurance to paddy rice farmers in Sri Lanka. The collaboration between them was announced Tuesday at CoinDesk's first "Blockchain for Social Good" event in London.

Microinsurance is essentially cover for people with very low incomes. By using a blockchain to pre-program the conditions where a pay-out will automatically be made i.e. poor weather conditions like floods or drought and other types of disaster removes most of the operational costs that have in the past made microinsurance economically unviable.

Etherisc’s blockchain solution is being integrated into an existing weather in-

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surance product that is supported by Oxfam in Sri Lanka.

ance companies to reach large groups of small-scale farmers.

Speaking With CoinDesk’s Michiel Berende, the startup's inclusive insurance lead said:

The second phase of the project will seek to take advantage of the trust-minimizing, transparent nature of blockchains to redesign the agricultural value chain, which will allow large food producers, for example, to play a supporting role.

Highlighting capabilities that could benefit aid organizations the world over Berende said:

We are tapping into the existing distribution channels that "We want to explore where we can bring Oxfam has, and in the large multinationals to see how looking at how they can support the risks of smallblockchain can The charity has been working for sever- scale farmers," said Berende. He has lower costs and al years to establish a solid base to sup- several years’ experience working on port farmers in the region. grant-funded schemes with small-scale increase efficienfarmers in India and other emerging cies and make it "We are excited to work towards the execonomies around the world. easier for many pansion of this innovative program with more farmers to the help of blockchain technology and Oxfam and Etherisc are attempting to get access to this focused insurance industry experience entice companies further up the supfrom our partners Etherisc," he said. ply chain and also aid organisations to product.”

"We are tapping into the existing distribution channels that Oxfam has, and looking at how blockchain can lower costs and increase efficiencies and make it easier for many more farmers to get access to this product.”

Oxfam and Etherisc have revealed they are working on the paddy field insurance project in Sri Lanka with one of the world’s largest insurance brokers, although they are not permitted to reveal their identity at this stage.

By automating insurance coverage on a blockchain, which is the first phase, it will make it much easier for insur-

participate in their blockchain-based risk pools. Risk pools are a way of holding group funds in smart contracts ensuring the money is only released to the insurees when specific, pre-defined conditions are met.

The contracts have not just the potential for risk protection, but they could also ensure that a specific fertilizer is used or to purchase seeds.

"Now we have ways that we can be certain money will be spent the way it's supposed to be spent and always reach the location it should reach,".

Zurich Insurance Group recently revealed their own prototype of microinsurance crop insurance on Ethereum.

Designed by Martin Baier, Zurich's program manager for business innovation and development at Zurich, their prototype used an external weather data source API as the oracle to trigger the automatic pay-out in case of drought or flooding.

The project earned Zurich the distinction of being the only incumbent from its industry to make it to the fiMICHIEL BERENDE nals of an insurtech competition held CoinDesk in Zug, Switzerland AXA, also recently launched a blockchain-based parametric flight delay product (if the plane is two hours late, the customer gets an automatic pay-out), they are also looking at similar applications for rural microinsurance.

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Potential Catalysts for the Crypto Market The end of 2017 saw the crypto market hit an all time high. 2018 saw a prolonged bear market. 2019 has started positively. What could be the catalysts behind a prolonged bull run?

In this article I am going to discuss some possible catalysts.

The technology underlying Bitcoin and the blockchain based solution has improved greatly over the last year with the advent of things like the lightning network. There are no major technological barriers to greater adoption, so the road seems clear. What is less clear by ICO CROWD is how public sentiment towards Bitcoin and other cryptocurrencies will change in the near future. Perception of cryptocurrencies is also intrinsically linked to perception of governments 64

and banks. How do we get to a place where crypto can make the all important leap to mass adoption and drag the crypto market out of the doldrums?

BAKKT OR A BITCOIN ETF Many consider Bitcoin futures to be a holy grail of sorts for the crypto community. With a Bitcoin friendly Wall Street the door would be opened for institutional investment. Many believe Wall Street money will bring a huge influx of liquidity to the world of crypto. The SEC has rejected or delayed almost every proposal for a Bitcoin EFT to date, however, that is not stopping people trying. One interesting proposal set to go live very soon is Bakkt’s product: A physically delivered Bitcoin future. Bakkt is an offering from Intercontinental Exchange, the owner of the New York Stock Exchange.

Not everyone on Wall Street is enthusiastic about the arrival of Bitcoin EFT’s. Many Wall Street giants have publicly stated that there is a lack of interest amongst institutional investors.

BlackRock CEO Larry Fink spoke to Bloomberg in July about a lack of interest in crypto from his clients.

Recent announcements by Fidelity, Goldman Sachs, Citigroup and Morgan Stanley, which are gearing up for institutional investors run contrary to Mr Finks statements.

The truth probably lies somewhere in the middle. The fact that some institutions are preparing for crypto does bode well but this could all amount to very little.

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POVERTY Whilst many people see crypto adoption being dependent on acceptance and integration with the banking system a catalyst could actually be the bringing on board of the unbanked.

Over one billion people are considered to be living in extreme poverty globally and the vast majority of these people have little or no access to banking services.

The world bank states: “The work to end extreme poverty is far from over, and many challenges remain. The latest projections show that if we continue down a business-as-usual path, the world will not be able to eradicate extreme poverty by 2030.”

Traditional banking solutions are not feasible for the world's poorest. Many live in rural areas cut off from the internet. Some mobile payment solutions have made significant inroads to banking the unbanked and we may find that the first cryptocurrency to achieve a billion users does so via the world's poor not the world's rich.

the world of crypto. Facebook, Amazon, Google and Twitter have largely stayed away from crypto but this is not the case in Asia. Rakuten has acquired its only crypto currency exchange stating: “In order to provide cryptocurrency payment methods smoothly, we believe it is necessary for us to provide a cryptocurrency exchange function.”

foreigners as well as Americans might turn to Bitcoin due to its deflationary qualities.

The work to end extreme poverty is far from over, and many Alibaba is also developing its own cryp- challenges retocurrency payment methods. main. The latest projections MILLENNIAL MASS ADOPTION show that if we According to a recent study by Deidre Campbell, global chair of financial sercontinue down a vices at Edelman, 25% of millennial business-as-usuparticipants said they’re using or holdal path, the ing crypto, and 30% said they want to world will not be investigate it further. able to eradicate Many millennials are very skeptical and extreme poverty 77 percent believe that it is only a mat- by 2030.” ter of time before the “bad behavior” of the financial services industry leads us into another economic crisis.

ANOTHER GLOBAL FINANCIAL CRISIS Many skeptics believe that will soon be COMMERCIAL ADOPTION subject to another global financial criIt would not even take mass commersis and that the ensuing inflationary cial adoption to kickstart a crypto bull behavior by governments attempt to run. If only one of the big players in Sil- work their way out of it. In the event icon Valley tech was to adopt cryptothe dollar starts to devalue against currency it would be a massive boost to leading world currencies many wealthy

Bitcoin maximalist Murad Mahmudov says: “Because the current fiat currencies are inflationary, a lot of high-net worth individuals and asset managers around the world use the stock market, use the fixed-income markets, use the real estate markets as a store of value. That’s part of the reason why if you try to buy an apartment in Tokyo, London or New York, the prices are insane. This is because both American high-net worth individuals and foreign high-net worth individuals use these prime, city, luxury apartments as one of their stores of value.

And I believe that because fiat currencies are constantly diluted, at the same time this has caused an artificial increase in the value of other asset classes and other financial instruments as people are hunting for yield. The agWorld Bank gressive quantitative easing and the aggressive unorthodox, negative interest rate monetary policies of some central banks since the financial crisis have exacerbated this effect even further.”

Bitcoin was born out of frustration with the last financial crisis and at the time the world lacked a non governmental distributed currency system. With a viable alternative, will this be the catalyst that drives the world towards crypto?

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Sony's Hardware Wallet Sony is an entertainment giant based in Tokyo. It’s holding company has a diverse set of business including consumer and professional electronics, gaming, entertainment, and financial services.

They own the largest music entertainment business in the world.

by ICO CROWD

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The group consists of Sony Corporation, Sony Pictures, Sony Pictures Entertainment Japan, Sony Mobile, Sony Interactive Entertainment, Sony Music, Sony Music Entertainment Japan, Sony/ATV Music Publishing, Sony Financial Holdings, and others.

A hardware wallet is a special type of bitcoin wallet which stores the user's private keys in a secure hardware device. They have major advantages over standard software wallets as private keys are often stored in a protected area of a microcontroller and cannot be transferred out of the device in plaintext. They are immune to computer viruses that steal from software wallets. They can be used securely and interactively, private keys never need to touch potentially-vulnerable software. Much of the time, the software is open source, allowing a user to validate the entire operation of the device

Now Sony has developed technology that it thinks will help cryptocurrency users securely store their assets. They have announced that their Computer Science Laboratories division (Sony CSL) have developed a hardware wallet that can be used to store Bitcoin and other digital assets in a secure offline environment and retaining the convenience of less secure online crypto storage methods.

Sonys offering differs from other leading hardware wallets such as the Trezor One and Ledger Nano S, which connect via USB to a PC or mobile device.

Instead, Sony CSL’s wallet which will store the user’s private keys on a contactless IC card, this enables the user to sign transactions easily from a NFC-enabled mobile device.

ages private keys used for other purposes, such as those for permitting the use of personal information using blockchain technology. It is an infrastructure technology with multiple possible applications.

Sony CSL will continue advancing initiatives towards the commercialization of its “cryptocurrency hardware wallet technology” that allows for safe and secure transactions of digital assets including cryptocurrencies with the aim of furthering the widespread adoption of blockchain technology.”

Sony has not at this stage announced any plans to convert its research into any real-world product or application.

It is not known when or if a mass rollout of the product will be scheduled.

Sony explained: “This IC card type hardware wallet is small, portable and useful, unlike typical existing hardware wallets that connect to PCs via USB. In addition, it is possible to securely generate and store a private key with a highly reliable tamper-proof module within the IC card.”

Sony has also this year applied to patent a system that utilizes blockchain technology to implement digital rights management (DRM). They have unveiled the production version of a DRM system that has been integrated into Sony Global Educations platform for sharing educational data.

The release further noted: “This IC card-type cryptocurrency hardware wallet technology not only manages the private keys used for cryptocurrency transactions but also man-

In March of this year, Japanese financial services group SBI Holdings bought 40 percent of a Taiwanese cryptocurrency hardware wallet company CoolBitX. Ledger noted in July that it had sold

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zor wallet, but without the need to ever connect to the web.

more than one million wallets in 2017, generating a profit of $29 million.

Demand for hardware wallets is experiencing significant growth and Ledger is pursuing an ambitious expansion strategy across Asia.

This IC card type hardware wallet is small, portable and useful, unlike typical existing hardware wallets that connect to to rapidly expand across the globe. I PCs via USB. have seen first-hand how mobile, digIn addition, ital and crypto have taken off across it is possible Asia, and the opening of this office to securely will help meet the increased demand for our products and services. We ex- generate and pect to grow quickly, and have already store a private targeted future office expansion, inkey with a cluding Tokyo, Seoul and Singapore.” highly reliable Another interesting entrant into the tamper-proof market is Ellipal. It is one of the less- module within er-known names in the hardware walthe IC card.”

Benjamin Soong, formerly of S&P Global Market Intelligence and Deloitte, is the newly appointed head of Ledger’s Asia Pacific region and is tasked with meeting the rising demand for Ledger Nano S, its trademark crypto wallet, let game. However, the Hong Kongand Ledger Vault, its crypto self-custo- based company is on the rise, prody management solution. He has said: pelled by the success of its flagship device, “The Cold Wallet 2.0.” The “It is a very exciting time to join smartphone-like device promises all Ledger, as the company continues the functionality of a Ledger or Tre-

For those who are paranoid about security, there’s an extra step that can be taken with Elipals device, separating the wallet from the web altogether. The device claims to be “the most secure crypto hardware wallet.” An investigation of the facts supports 2.0’s boast to be highly secure, but it is impossible to rank it categorically alongside the likes of Ledger or Trezor. When you go to sign a transaction sent from the cold wallet using your smartphone, how exactly do you bridge the gap between an internet-connected device (smartphone) and a cold storage device? The answer comes in the form of QR codes, which each device can generate and the other can scan.

It is unclear at this stage whether Sony is seriously considering entering the hardware wallet market or just seeking to register another patent. However, one thing is for sure, a company with the breadth of scope of business interests such as Sony has, could quickly position themselves as a major blockchain innovator. They are in a unique position and by integrating blockchain Sony into their many products and services they could help quickly spread the mass adoption of crypto. After all, chances are that you have at least one Sony product or service in your home.

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Johnny Depp Collaborates with Crypto Start Up TaTaTu TaTaTu is an online entertainment hub that rewards its users for viewing content on the platform. They aim to be a Netflix competitor and have built their platform on the Ethereum network powered by Crypto Inks.

Their website states: “You know all that time you’ve been spending watching and posting? Well now you can make it truly worth your while. Because here at TaTaTu we reward you for engaging. We’ll be showing great movies, music videos, sports and gaming on the platform - but by you earn TaTaTu tokens when you watch ICO CROWD content.

Plus, you’ll be rewarded when you share and when you post too. The TaTaTu token is a new cryptocurrency that’s built on the Blockchain - the new virtual ledger that gives transparency to every transaction. So, come try us out. Build up a sizeable wallet and earn as you enjoy.”

The firm has recently announced that they have signed a development deal with Johnny Depp to create digital content and films. Mr Depp will work with the Canadian-Italian film producer An68

drea Iervolino, who also runs Tatatu. Together they will create digital content and films. Iervolino says Depp will be a collaborator, identifying and developing projects.

TaTaTu uses its own native cryptocurrency, the TTU token. Users earn tokens when they watch content or make posts on the platform. These tokens will eventually be able to be used to vote on upcoming content.

The company is planning on using Ethereum based smart contracts to manage digital rights. They plan on using tokens to incentivize advertisers and content creators alike by reimbursing them for their time and content and all of this can be done in an open, transparent and decentralized environment.

Johnny Depp has stated “In this era of democratized entertainment, I admire the imaginative ethos of Andrea and look forward to collaborating together in a liberating, progressive manner that will befit the principals of our respective entities.”

TaTaTu had a $575 million US dollar presale this summer and is attempting

to grow its pool of talent to rival its competitors such as Amazon and Netflix According to an article by the Hollywood Reporter, the first collaboration will be an adaptation of the J.M. Coetzee award-winning novel “Waiting for the Barbarians.” They are planning on shooting in October in Morocco with costars Robert Pattison and Mark Rylance.

Tatatu have given the green light for the co-production of Lamborghini starring Alec Baldwin as Enzo Ferrari and Antonio Banderas as Ferruccio Lamborghini.

It is listed on their site as coming soon.

The company is also working on various other projects, including projects with Jeremy Renner, Jim Caviezel and Mira Sorvino.

According to its white paper, TaTaTu takes the concerns of users and content providers very seriously by offering a brand new model for the media industry that allows greater transparency, control, and choice.

TaTaTu is a fair and transparent social media and entertainment platform. People will be rewarded for both creating or providing content and for watching it.

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• All users of the TaTaTu platform will be able to watch content for free (initially all of it will need to be pre-approved before it goes live) • Premium content such as movies, sports footage, and music videos will be provided by entertainment networks. There will also be approved content from celebrities, YouTubers, and other influencers I decided to sign up to TaTaTu and see what the fuss was about. I was immediately credited with roughly $10 of TTU tokens. I then decided to peruse the film library which it informed me I could earn for watching. The current selection does leave a lot to be desired, remind-

In this era of democratized entertainment, I admire the imaginative ethos of ing me more of an early nineties video rental shop than an online entertain- Andrea and ment hub. I should be kinder as I am ap- look forward to parently going to be rewarded for watch- collaborating ing these. I was able to find a horror fatogether in vourite of mine, the cringeworthily bad a liberating, “Children of The Living Dead”. After an hour and a half of viewing, I was able to progressive see that my balance had increased by the manner that eyewatering sum of 0.1 Tokens (roughwill befit the ly 2 cents). This revenue share is part of principals of a $50 million US dollar giveaway from our respective TaTaTu to onboard users. By referring entities.” friends, you can also earn a percentage of their tokens.

However, it should be noted that the platform is still in beta and they do already have a minimal viable product

JOHNNY DEPP

which seems to work ok. The onboarding of these big Hollywood names does suggest that we will see some interesting products coming from TaTaTu in the not too distant future, which I look forward to seeing. The site is currently lacking in any form of premium content.

If Tatatu is going to be giving away free tokens and is going to compete with the likes of Amazon and Netflix I suspect they will need a lot more money than the $575 million raised, a recent Forbes article has stated that “The Economist, citing data from a Goldman Sachs assessment, estimates that Netflix will spend between $12 and $13 billion on content on a cash basis this year”. How Tatatu evolves and if it manages to take advantages of network effects through mass adoption will be interesting. They will need premium content if they are to attract subscriptions and they will need subscriptions if they are going to create more premium content. Tatatu’s success or failure hinges on the early partnerships it makes.

Should you wish to sign up - you can do so here: https://beta.tatatu. com/?tid=55061cf9-d05a-48d4-be2f5dbe956e7307&lang=en.

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UK Govt Task Force Proposes Regulatory Changes A new report has suggested Members of Parliament in the United Kingdom should tread lightly when it comes to pushing for regulation on cryptocurrencies, arguing that a poorly instituted legislation could have a negative impact on the UK’s standing as a leader in the world of fintech.

by ICO CROWD

Mark Carney has previously referred to Bitcoin as a “global speculative mania” and suggested it “exhibited all the classical hallmarks of bubbles.”

The report was authored by the British Business Federation Authority (BBFA), the law firm Baker Botts, a crypto exchange called TodaQ, and venture capital fund Novum Insights.

Last month the UK Parliament’s Treasury Select Committee’s report recommended that the FCA should extend their regulatory scope to include cryptocurrencies and ICO’s.

The general theme of the report was that bad regulation is worse than no regulation at all.

In contrast the new report suggests that MP’s proposed plans could harm ‘any other kind of asset’ because it is “ashamedly geared around bitcoin.”

The report specifically mentioned proposed plans by MP’s to give the UK’s Financial Conduct Authority powers to stamp out illegal crypto-related activity.

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The Bank of England and FCA are rumoured to be working together on a proposal to regulate crypto currencies and to combat alleged fraud and money laundering in the crypto sector.

Patrick Curry, the BBFA chief executive suggested that inappropriate legislation levied against the industry could

lead to an exodus of cryptocurrency exchanges from the UK and businesses would move to more welcoming jurisdictions such as Malta.

Curry explained to the Telegraph: “It is a very blunt instrument approach and I haven’t seen this in other countries.

The use of this technology is still a voyage of discovery and these technologies are being refined for different types of use. My concern is the law of unintended consequences.”

Neil Foster of law firm Baker Botts called for a more sophisticated approach to regulation. For him, it makes little sense to impose blanket regulations on all digital assets. He explained: “With sophisticated classification we should work out what could be a regulated activity. If you crowbar everything into the Regulated Activities Order you are making everything into an investment bank.”

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Hot on the heels of the report the Financial Conduct Authority (FCA) has weighed in on whether or not to ban certain types of crypto-related derivatives. Whilst the UK’s eyes were focused squarely on the budget, the FCA quietly announced it was considering a ban on leveraged crypto derivatives. They also said they would clarify before the end of the year whether certain other cryptos would fall under their remit.

for difference (CFDs), options, and futures. This has the potential to disrupt some of London’s largest trading platforms, such as IG Group and Plus500, who are already making money trading crypto-based CFDs based on popular cryptocurrencies like Bitcoin, Litecoin, Monero, and EOS. These financial instruments are classified as derivatives, the FCA has jurisdiction over their control.

“Given the complexity and new challenges presented to traditional forms of financial regulation, more time is needed to consider how regulation can meaningfully address the risks posed by exchange tokens, such as bitcoin.”

With sophisticated classification we should work out what could The FCA along with the UK Treasury Some other crypto-based assets fall be a regulated and the Bank of England was part of a into more of a grey area. Such as ones activity. If group, the Cryptoasset Taskforce. The used only as a means of exchange, for you crowbar Taskforce released its own report reexample, or to raise capital or invest. cently, with the FCA stating that digiThese are not technically derivatives, everything into tal assets have “no intrinsic value and and some argue that they should not be the Regulated therefore investors should be prepared regulated in the same way. In an interActivities Order to lose all the value they have put in.” view with the Times, CryptoUK Chair you are making Iqbal Gandham said: everything into In the report, the UK regulatory body also states that it believes crypto assets “It is important that new rules are pro- an investment threaten to destabilize the UK’s econportionate and do not put up excessive bank.” omy, while the BBFA argues driving crypto business away would hurt the country’s reputation as a fintech hub.

According to an article in the Financial Times, the FCA is specifically looking at a ban on cryptocurrency based derivatives to retail investors. It is thought this would include contracts

barriers, including for retail investors,”

It seems the FCA have repositioned themselves from a somewhat neutral stance on distributed ledger technology to pushing more strongly for its regulation, at least when it comes to its use in creating financial derivatives. They stated to the Times:

Which way the FCA will jump is unclear at this moment in time. By the first quarter of 2019 the FCA has stated it will hold a separate consultation into whether to ban the sale of crypto derivatives to retail investors and will also decide on whether to regulate crypto exchanges and wallet providers. Before the end of the year it will also clarify which crypto assets it has jurisdiction over and which ones it would need to extend its powers to cover.

This is not the first time that debate on cryptocurrency regulations in the UK has drawn unfavourable opinions.

Leading UK law firm Reynolds Porter Chamberlain has raised doubts over NEIL FOSTER whether the FCA even has the capaciBaker Botts ty to regulate the cryptocurrency sector. The firm’s legal experts have also suggested that introducing such regulations would be a very lengthy process and could take up to 24 months. Two years is a very long time in the world of crypto.

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Vitalik Buterin and The Birth of Ethereum Vitalik Buterin is a Russian-Canadian write and programmer who has been involved in the crypto community since 2011. He co-founded and wrote articles for Bitcoin magazine but is most famous for his role as the co-creator of Ethereum, the world's second most valuable cryptocurrency.

ing articles for a blog which earned him abling users to facilitate financial conaround five bitcoins per article (roughly tracts. These projects were designed to ÂŁ16,000 at todays prices. build a whole new layer of functionality atop the Bitcoin blockchain.

Vitaliks articles eventually attracted the attention of a Romanian BitVitalik soon realised that it was possicoin enthusiast called Mihai Alisie. In ble to replace the functionality of these 2011 they co-founded Bitcoin Maganew protocols with a much more genzine. Buterin became the head writer eralised system. If a blockchain based for the magazine whilst doing a second currency could also have a Turing-comjob as a research assistant for Ian Gold- plete programming language built in, Vitalik was born in Russia in 1994. He berg, a cryptographer. Vitalik manthe possibilities were endless. He aplived there until, at the age of six his aged to do all this whilst taking five ad- proached existing projects with his idea parents decided to emigrate to Canada. vanced courses at the University of Wa- but was told that whilst his idea had Vitalik’s brilliance was noticed at a very terloo in Toronto. merit the time wasn't right for such a early age, in third grade he was placed grandiose idea. Vitalik decided to proin a program for gifted children. He was In 2013 Vitalik travelled to San Jose, ceed alone. a natural at both mathematics and pro- California to attend a Bitcoin conferby ence on behalf of Bitcoin Magazine. It Towards the end of 2013, Vitalik reICO CROWD gramming. was here that he witnesses the enthuleased his idea in the form of a white He first became aware of Bitcoin afsiastic community that was growing paper. He sent this to some friends who ter hearing about it from his father around the cryptocurrency project. Vi- then forwarded it to others. He was apwho had a software startup compatalik decided to drop out of university proached by around 30 people who ny in 2013. Vitalik was initially sceptiand spend some of the Bitcoins he had wanted to further discuss the concept. cal about cryptocurrency but became earned to travel around the world and He awaited criticism of his idea and for more interested as the idea did seem meet the growing list of names making someone to point out fatal flaws, but to be going away. He was no fan of gov- a name for themselves by trying to exnone were forthcoming, Ethereum was ernment regulation or corporate contend the capabilities of the Bitcoin net- born. trol and the decentralized nature of Bit- work. coin became more and more attractive Initially the concept of Ethereum was to him.

As Vitalik travelled he became familcloser to Bitcoin than it is now. The iar with a wide range of Bitcoin relatidea evolved over time. The first step Vitalik spent significant time on varied projects. However, most of these was to create the programming lanous Bitcoin and crypto related forums, projects were merely focused on how guage required to create a Turing-comwhere he gained a strong understandto improve Bitcoins function as a curplete machine. Once this had been ing of the potential of cryptocurrencies. rency. achieved the team kept finding new He wanted to get more involved in the uses for it every week. By January 2014 developing cryptocurrency but lacked When meeting the people behind the the development team had realized the resources to mine or purchase cryp- CovertCoin and MasterCoin projects in that the amount of use cases for their to so ended up looking for online emIsrael they opened his eyes to the posnew cryptocurrency were immense and ployment opportunities that paid in sibility of using blockchain for applica- that many existing technologies could Bitcoin. He eventually started writtions other than currency such as enbe disrupted with the Ethereum block73

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chain and relatively little code. Vitalik and the team slowly modified the project making it eventually into what we now know as Ethereum.

The Ethereum project was publicly announced in January 2014. The core development team were Vitalik Buterin, Mihai Alisie, Anthony Di Iorio, Charles Hoskinson, Joe Lubin and Gavin Wood.

A few months after their public announcement they held a crowdsale of Ether to fund the further development of the platform.

tive nodes at the same time. Crypto exchanges were quick to add Ether to the list of currencies that they allowed to be actively traded and Ether saw its value rise quickly.

Ethereum was quick to attract some big names wishing to develop projects on the platform. Microsoft and IBM have both developed applications on the platform as well as collaborating directly with the Ethereum Foundation and its developers.

The Metropolis update is set to come The crowdsale was a success and the out in two parts. The first part took team raised more than 31,000 BTC place in October 2017 and the secin funding. At the time Bitcoin was ond part is due to take place in 2019 trading around $650 US dollars and subject to issues on the testnet berepresented around $18 million in ing resolved. The update is designed funds. Ethereto make the netum’s crowdfundwork more user ing campaign friendly, faster, was the third lighter and more most successful secure. The final The Ethereum project there had been to stage of Etherewas publicly announced date and gained um is known as it much positive “Serenity” and in January 2014. The core media coverage. does not at this development team were However, shortly stage have an imVitalik Buterin, Mihai Alisie, plementation after the crowdsale the price of date.

Anthony Di Iorio, Charles Bitcoin crashed Hoskinson, Joe Lubin and and they lost “The DAO” is the Gavin Wood. millions of dolname of a Digital lars which could Autonomous Orhave been avoidganisation created had they coned by a German verted their holdstartup called ings in to fiat currency. The team es- Slock.it built on the Ethereum nettablished the Ethereum Foundation, work. Slock.it offered “smart locks” a non-profit organization based in that allowed people to share anySwitzerland. This foundation overthing that could be locked such as a sees the development of Ethereum's car or a house allowing a kind of deopen source software. centralized AirBnB. The DAO became the largest crowdfunded project in Before the network was officially all history, raising over $150 million launched the Ethereum Foundation US dollars. It was more money than trialled several prototypes. Beta testthe creators ever expected to raise, ers searched for bugs in the system and and a lot more than they were capathe Ethereum team introduced a “bug ble of handling. bounty” of 25,000 Ether for stress testing the network.

It was then that the unthinkable happened. In June 2016, due to the poor Towards the end of July 2015, the first way that the DAO was programmed, a publicly available version of Etherehacker was able to take advantage of um was launched under the code name a technical loophole and drain Ether “Frontier”. It was a “bare bones” verout of the project. The hacker mansion of Ethereum with only command aged to syphon off $50 million US line access but still allowed for the crea- dollars worth of Ether into a child tion of DApps. When the platform was DAO which rendered the funds undeemed as stable by the developers and usable. Ether dropped dramatically auditors they migrated to the next ver- in price as a result and the Ethereum sion “Homestead”. This occurred in Foundation faced a difficult decision March 2016. on how to deal with the fallout of the collapse of Ethereum's largest project.

Ethereum had established itself well in the cryptocurrency world. Ethereum The Ethereum Foundations solution boasted around 5100 active nodes. An was a blockchain “fork”. Initially they impressive achievement when you con- proposed a soft fork. This would roll sider that Bitcoin had around 6000 acthe entire network back to a time be74

I think ethereum can absolutely survive me spontaneously combusting tomorrow at this point.

fore the DAO losses had occurred and move all the Ether into a smart contract that could only reimburse investors. The proposal divided the Ethereum community as it run contrary to the principle that on the Ethereum network the decision power lies with the community. A soft proposal would require the majority of Ethereum miners voting for the rollback, but eventually a security flaw in the voting process made this option impossible.

A “hard fork” was the only solution.

It would mean creating an entirely new Ethereum network that had slightly different rules than the original. Once the fork was complete miners, exchanges and holders of Ether would need to decide which version of Ethereum they wanted to participate in. The hard fork proposal was passed

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by 89 percent of the Ethereum community and the fork toom place on July 20th 2016.

As part of an ongoing twitter debate which covered various issues including his support of Ethereum-based altcoin projects, Buterin stated that Ethereum itself could now continue even if it were impossible for him to contribute.

In June 2017 a fake news report about Vitaliks death went viral causing Ether to lose $4 billion off its market capitalization. Ethereum rebounded but it has shown how integral Vitalik’s contribution is to the Ethereum project.

“I think ethereum can absolutely survive me spontaneously combusting tomorrow at this point,” he wrote on Twitter October 4.

Cryptocurrency industry figures have on several occasions accused Buterin of “pumping” through his Ether (ETH) holdings, also questioned his ethics regarding Ethereum’s pre-mine and other aspects of the largest altcoin.

Recently he addressed accusations that he had premined a billion US dollars of Ether. When questioned on twitter about how much Ether he held he issued the following statement: “I never personally held more than ~0.9% of all ETH, and my net worth never came close to $1b. Also, I'm pretty sure there are no criminal laws against pre-mining.”.

Adding: “I never had 900k ETH. When I had 0.9% of all ETH, the supply was ~75 million. When the price hit $1250, I had considerably less than 0.9%.”

He went on to say: “The Ethereum Foundation only ever owned ~3m, and now has ~660k; the rest was spent on development.”

Already in progress; watch the repos, even much of the research is being done by (Danny Ryan), (Justin Drake), (HsiaoWei Wang) and others

When asked whether he was planning to take a back seat with regard to his project in future, Buterin replied that this was “in progress,” without giving details about a timeframe. “Already in progress; watch the repos, even much of the research is being done by (Danny Ryan), (Justin Drake), (Hsiao-Wei Wang) and others,” he confirmed.

Vitalik is optimistic about the future of Ethereum and for the time being remains involved in the project. He remains focused on bringing out new safer, more stable, efficient versions of Ethereum that solve scaling issues. He is and will remain one of the most influential people in blockchain.

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Who is Satoshi Nakamoto?

The world of cryptocurrencies owes its existence to Bitcoin. Bitcoin was designed as an open source project and was released to the public in 2019. It was a communal project that had openness at its core. It was created as a result of a white paper released in November 2008.

The paper was released under the name of Satoshi Nakamoto and laid the groundwork for the Bitcoin protocol.

This followed the 2007 release of the first iteration of the Bitcoin source code

by Satoshi or someone calling themselves Satoshi. On January 3rd 2009 by ICO CROWD the first ever Bitcoin block was mined.

The identity of Satoshi Nakamoto is a subject of much debate and quite possibly the greatest mystery of the whole cryptosphere. The first ever bitcoin block bore the message: “The Times 03/ Jan/2009 Chancellor on brink of second bailout for banks”.

Initially, the notorious Satoshi was heavily involved in the Bitcoin community. He collaborated with them to 76

modify the underlying bitcoin protocol. After two years of involvement with the project, he handed control of it to Gavin Andresen. In the spring of 2011, Satoshi had his final communication with the project creators stating that he had “moved on to other things” and that Bitcoin was “in good hands with Gavin and everyone”. No one was to ever hear from him again.

As the Bitcoin ecosystem has grown in value and size the mystery around who Satoshi Nakamoto is has grown too. Many people have tried to identify him with no success. Satoshi himself claimed to be born on the 5th of April 1975. It is not known if he is male or female or even if he is one person or a group of people.

Due to Satoshis perfect use of English, many have speculated that Satoshi might, in fact, be British. He sometimes uses British English in the code and comments suggesting that he is of Commonwealth origin.

A Swiss coder, Stefan Thomas, who is an active member of the Bitcoin community has graphed the time stamps

of more than 500 of Nakamoto’s public posts and demonstrated that he was consistently absent between the hours of midnight and 6am Greenwich Meantime giving further credence to the suggestion that he may be a Brit.

Internet sleuths have come up with several potential individuals who they suspect of being Nakamoto. Here is a list of the prime suspects: Nick Szabo, Dorian Prentice Satoshi Nakamoto, Hal Finney, Craig Wright.

Given the current market capitalisation of Bitcoin and the fact that Nakamoto, if he or she truly is one person, owns roughly 5 percent of the world’s bitcoin supply. This would make him an instant billionaire. If Satoshi was to move the rumoured 980,000 Bitcoins in his or her possession it would have massive ramifications for the world of crypto with the price potentially plummeting if the biggest whale of all time was ever to move coins. Maybe it is best for all concerned if Satoshi remains both anonymous and inactive.

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Nick Szabo One of the first people to be identified as a suspect in the Satoshi Nakamoto identity mystery was Nick Szabo. He is a decentralized currency enthusiast who in 1998 published a paper on “Bit Gold” which was a precursor to the first cryptocurrency. He is credited with the concept and phrase “smart contracts”. Running a reverse textual analysis, Skye Grey, an internet researcher, found many unique phrases that linked Szabos style of writing to that of Satoshis white paper.

This evidence is purely circumstantial. Szabo has repeatedly denied accusations he is Bitcoins creator.

Dorian Prentice Satoshi Nakamoto Dorian is a Japanese American man who lives in California. Whilst he goes by the name Dorian Prentice Satoshi Nakamoto his birth name is Satoshi Nakamoto. He was brought to public attention in a 2014 Newsweek where he was identified as having trained as a physicist at Cal Poly University in Pomona and has a background of libertarianism.

When asked a question regarding Bitcoin he once said “I am no longer involved, and I cannot discuss it. It’s been turned over to other people.

They are in charge of it now. I no longer have any connection. “This led to a media frenzy resulting in a car chase. However, he later claimed that he had misunderstood the reporter’s question thinking it related to his previous work as a military contractor that was classified.

Hal Finney Hal is a cryptographic pioneer and was before Bitcoin came along. He was the second person after Satoshi Nakamoto to make use of the bitcoin software, file bug reports and suggest improvements to it. He was the first person to ever receive a bitcoin in a transaction when Satoshi sent him 10 coins as a test. Writing analysis suggests that Finney may have been the ghost writer for Satoshi Nakamoto. Hal lived only a few blocks away from Dorian Prentice Satoshi Nakamoto. Hal died in August 2014. Only circumstantial evidence pointed to Hal being Satoshi.

Craig Wright Craig Wright is an Australian academic and computer engineering expert. In November 2015 Gizmodo received an anonymous email from an individual stating that not only did he know Craig was the creator of Bitcoin but that he had also worked for him. Hours after Wired asserted that Craig was Nakamoto the Australian Federal Police raided his home, later stating that the incident was unrelated to the recent media report. Wright deleted his internet presence until May 2016. He then announced on Twitter that he was indeed the creator of the digital currency and claimed to have proof to back up his statement. He later retracted his statement and did not offer the proof, instead claiming that he did not have the courage to prove his identity. This has earned him the title of the Fake Satoshi or Faketoshi.

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An Introduction to the Stellar Lumens Community With no doubt, I can say that Stellar has one of the strongest communities around its token in the crypto space. The most important part of their community that drives the innovation is the Stellar Build Challenge. It’s responsible for funding the most useful tools build upon Stellar. Let’s take a deeper look!

Introduction to Stellar Build Challenge Approximately every three months Stellar launches a new challenge for its community members incentivizing them to create useful tools and spreading the word about Stellar. There are three general rules for participating in by the challenge: MICHIEL MULDERS 1. Submissions must be live and available somewhere so people can use/review them.

2. All entries must be announced on Galactic Talk (Stellar forum).

3. Code must be open source, this means it’s freely available for everyone to view and modify.

SBC PROJECTS Development of SDKs Stellar consists of a wide range of software development kits in many differ78

ent languages which allows developers to interact with the Stellar Horizon API using their native programming language. One of the latest additions is the Stellar SDK for iOS so app developers can integrate Stellar-based operations in mobile applications. It’s great to see such variety in SDKs that help to further increase developer support so any dev can adopt Stellar.

STELLAR TOKEN WALLETS Many wallets have been developed over the past year, Lobstr.co is an online secure Stellar wallet that supports all Stellar assets. Why is it worth mentioning just this wallet? During the 7th SBC, Stellar announced that they wanted to see UI and UX improvements to the existing wallets. Lobstr.co introduced a clever idea where they credit each new account 1 XLM as that’s the base amount to activate an account on the Stellar network. For many new users, this is a huge UX struggle as they must sign up at an exchange (go through the slow KYC process) to buy a small amount of XLM just to activate their wallet account. Because of this struggle, many users just leave their XLM holdings on the exchange wallet which is less secure compared with a wallet like Lobstr.co where you

own the private and public key. By giving this one XLM, Lobstr.co can remove a big UX hurdle for new users adopting Stellar.

If your wallet is inactive for 20 days or more, Lobstr will delete your Stellar account to return the credit. However, your account will be available anyway.

Besides that, you won’t be allowed to keep the 1 XLM credit. As soon as you receive funds to your Stellar account, the 1 XLM credit will be paid off.

STELLAR TOKEN EXCHANGES Stellarport.io is an SBC product that is widely used by the Stellar community.

Stellarport.io stands for a secure and reliable portal to the stellar network.

Using their intuitive portal, users can create and manage their wallet, send payments in all stellar assets, and trade on the stellar decentralized exchange.

Other Relevant Projects Through the SBC challenge, many relevant projects regarding security were developed. For example, Stellar Authenticator is a tool for creating accounts and validating transactions on Stellar. Besides that, Stellar Authenticator helps you to securely create transactions while keeping all your private data encrypted.

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StellarGuard is an extra security plugin for your Stellar account to protect it from security flaws. Whenever an attacker is able to access the private key of your account, StellarGuard helps to prevent him from stealing your funds.

StellarGuard utilizes the Stellar network's multisignature functionality to protect your account. It’s actually very simple, you create a StellarGuard account and add this public key as an additional signer to your main account containing all your funds.

Stellar Partnership Grant Program Stellar.org is accepting proposals from leading organizations that are building on the Stellar network to improve the global financial landscape and promote financial inclusion. Exceptional organizations who develop and operate products and services that are crucially important to the Stellar Network may receive up to $2,000,000 USD worth of lumens per grant. In total, Stellar has allocated in total 25 billion Lumens into the Partnership Grant Program.

You can send around every asset under the sun, not just your local currency — that’s where money is heading.

Stellar and Keybase Partnership One of the fruits of this Partnership Grant, is the partnership Keybase acquired with the Stellar Foundation.

Keybase has created a general set of cryptographically secure tools (chat, file storage, git) which will be supported by Stellar.

Stellar is mostly interested in their ground-breaking effort to link strong cryptography to real-world identity. They see a future where, say, I can send my friend 100XLM, and, via Keybase, I can send it to her by knowing only her Twitter or Reddit handle. I won’t need some long string of digits as a key, just a human-readable username that I already know. In short, I can interact with her financially in the same way I interact with her socially. The end product would be like a global, decentralized Venmo, where “you can send around every asset under the sun, not just your local currency—that’s where money is heading”, and they want to get Stellar started along the path.

THE BOTTOM LINE Stellar is doing a great job building, incentivizing, and growing their community. On the one hand, developers get a chance to get rewarded for their hard work, on the other hand, Stellar users can profit from all these new tools being developed. Stellar has one of the largest communities due to all the efforts they put into their community. It’s great to see that amazing projects like Keybase partner with Stellar to pursue amazing things like building one global currency.

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A Crypto Smart City Jeffrey Berns, CEO of Blockchains LLC and cryptocurrency millionaire has acquired 67,000 acres of land in Northern Nevada where he plans to build a city that is managed entirely on the blockchain.

dential living and commerce can flourish alongside world-changing technologies. Multiple innovative technologies will change the way its residents interact daily and blockchain technology will be at the centre of it all — keeping systems honest, fair and democratic.”

The deal cost him around $170 million US dollars and once his project is up and running, he aims to give away 90 percent of the decision-making and profits made to what he describes as a distributed collaborative entity. All ownership rights and voting powers by ICO CROWD will be tracked and recorded via a digital wallet.

This vast area of land that Berns has purchased surrounds an industrial park where Tesla has built their Gigafactory as well as large buildings of Silicon Valley tech giants like Apple and Google.

The city will not have an established government and instead, decisions would be made by holders of a city-specific cryptocurrency built on the Ethereum blockchain.

Tom Wiscombe Architecture, one of the designers of the community’s website states: “The city aims to showcase how business development, resi80

So far Berns has spent around $300 million on land, offices planning and maintains a staff of around 70 people.

The New York Times states that Berns is funding the entire project with money he made from an investment in Ethereum in 2015 which he sold at the right time. He told the New York Times: “Something inside me tells me this is the answer. That if we can get enough people to trust the blockchain, we can begin to change all the systems we operate by.”

He went on to explain that one of the reasons he chose Nevada was the tax benefits, particularly the lack of any income taxes.

The city will be split into two sections: The residential area with campus for researching emerging technologies and a commercial sector which will feature “a highly secured, high-tech Blockchains Campus that joins blockchain technology with artificial intelligence (AI), 3D printing and nanotechnology,” as well as a university.

It is envisioned that the commercial side will be focused on encouraging technologically forward thinking ideas and development. The tech campus will also feature an e-sports arena. The residential area will be a smart city with homes and schools, self-driving cars, as well as a drone delivery system.

There are plans for the whole city to run on renewable energy and work will begin on the wider construction in late

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2019 at the earliest as the plans need to Belmont Partners, an investment combe approved by the county. pany owned and run by Bill Gates himself have invested around $80 milBerns said: “Everything that we do will lion US dollars into their own smart have its infrastructure rooted in block- city. There are plans for it to be built of chain. Now, we also wanted to show 25,000 acres of land near Pheonix, Arihow the blockchain could change the zona. It will be equipped with unpiloted way we live, so we are creating a resitransport, independent logistics hubs, dential community as well. This resiand high-speed networks. dential community will have houses, apartments, condos, banks, markets, Consulting firm McKinsey claims there stores, schools, and we will use blockwill be over 600 smart cities around chain, the public blockchain, wherever the world by 2020 and some analysts possible. We will incubate projects with expect them to generate 60% of the those entities as we build out that resi- world’s GBP by 2025. dential community.”

In Slovenia, a country sometimes “This will either be the biggest thing known as “the Silicon Valley of Europe” ever, or the most spectacular crash and there is a crypto mall known as Bitcoin burn in the history of mankind,” Mr. City. It is a collaboration between BTC Berns said. “I don’t know which one. I City and Eligma, a start-up that specialbelieve it’s the former, but either way ises in smart commerce solutions. it’s going to be one hell of a ride.”

The guys at Eligma have allowed visiBerns is not the only crypto city starttors to the entertainment area to enup. Several other players around the joy a wide range of payment options inglobe are planning their own crypto cluding crypto. They have developed utopias. their own payment system known as

Elipay that allows visitors to pay using cryptocurrencies via a mobile app.

This will either be the biggest thing ever, or the most spectacular crash and burn in the history of mankind.

I don’t know which one. I believe it’s the former, but either way it’s going to be one hell of a ride.”

Taipei also has visions of turning itself into a smart city. They have partnered with IOTA to provide the residents there with a wide range of technological advances powered by digital citizen cards with a build in Tangle-ID. Your Tangle-ID represents your digital identity in Taipei and helps prevent voter fraud, theft and is used to track your health history and a wide range of public services.

How big these new crypto smart cities will become remains to be seen. With multiple projects underway the race is on to create the smartest most crypto friendly city on the planet. Whether this will be an existing city that upgrades its infrastructure quickly or a brand-new start-up city remains to be seen. What we can be sure of, is that this technology is here to stay and wherever you are you will begin to see the effects of blockJEFFREY BERNS chains and the internet of things on the CEO of urban spaces around you soon if you haBlockchains LLC ven’t already noticed.

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Blockchain to Disrupt Advertising

There has been much debate of late of the huge influence that the tech oligarchs have over the economy, politics and the general fabric of society. Claims have been made that social media damages mental health.

Google has been accused of a left wing bias. Russia has been accused of using Facebook to influence the United States Presidential election. At the beating heart of both Facebook and Google and their main source of revenue is one thing - advertising.

vertising. Advertisers are these tech giants customers and you, the user, are the product. Under the current model sites are incentivised to garner as much information as possible about the users and try to keep them on the platform for as long as possible. Alphabet, Googles parent company and Facebook are the third and fifth most valuable companies on the planet as a result of their ability to scale advertising in ways never seen before.

When Google first started selling advertising space in 2000 it used the by standard model that had been used to ICO CROWD price adverts for several generations.

Google and Facebook are free at point of use as the sites users freely give away Humans would sell slots based on the cost per thousand people who viewed information about themselves which the advert. Google’s game changing inGoogle and Facebook then sell on to novation was the development of Adthird parties by allowing targeted ad82

Words a platform that automated the process of buying advertising space and turn the process into an auction. In 2002 AdWords generated $400 million US dollars of revenue for the firm. By 2017 that figure had risen to $95 billion. Facebook in 2017 generated close to $40 billion US dollars from their advertising platform.

When generating such substantial revenues from their advertising models it is unlikely that Google or Facebook would want to rock the boat. But new and innovative technologies to allow people to take back ownership of their digital identity and share in the revenues generated with users. The next generation of web services is going to be much more closely aligned with the user than the current generations.

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Adverts as we know them have been a part of societies cultural fabric for well over 100 years but technology has a way of disrupting the old ways and replacing them very quickly. The advent of web 3.0 and ever increasing adoption of cryptocurrencies offers users a way of monetising their online presence and enhancing their privacy should they wish. It will bring with it a plethora of new products and services. In the same way that the internet wouldn’t exist without the personal computer and instagram would not exist without the mobile phone the new wave of innovations that will be ushered in by crypto and web 3.0 will transform the internet and threaten the very core of Facebook and Google's value proposition.

Blockchain technology allows innovation on a scale never before seen on the internet. Blockchain platforms are generally open source and have created a design space allowing people to build upon their underlying infrastructure. Crowdfunding and collaboration by teams of developers building on these networks will bring

with them a more sincere user focused experience. The transparency of these projects will provide trust in the services a quality that both Google and Facebook seem to be having a hard time maintaining.

The adoption of blockchain technology is in many ways analogous to the open software ideology of the 1970s where developers built on open networks with standards and protocols they could trust. Blockchain by default has these qualities built in. The decentralized and distributed technology that will underpin web 3.0 is likely to be built by collaboration and cooperation rather than on the back of advertising revenue.

Advertising has established itself as the primary economic driver of the internet. With the advent of crypto based micropayments becoming possible the advertising based business model is likely to be superseded by a system that does not extract as much personal data, is not based on proprietary software. There are multiple competing visions of how web 3.0 is go-

ing to play out but blockchain does encourage more open systems with higher degrees of interoperability.

The next generation of web services is going to be much more closely aligned with the user than the current generations.

The Brave browser has received an all round good reception since its launch in June. It blocks advertising and tracking cookies by default. It also supports its own crypto-currency, the basic attention token (BAT). You can use these tokens to reward websites you visit with a monthly payment in tokens based on the amount of time you have spent on their site and your monthly BAT spend. You can choose to top up your browser at anytime with BAT tokens and there are plans in the future for you to be able to earn tokens by allowing certain non tracking adverts from Brave partners.

Brave has reportedly signed a deal with a major internet player (suspected to be wordpress) to integrate their token based system into wordpress websites that have over 80 million views daily.

Basic Attention Tokens were trading at $0.31 on Binance at the time of writing.

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Fidelity and Professional Advisory Firms Impact on Crypto Fidelity Investments are one of the biggest names in financial services. Globally they manage over $7.2 trillion US dollars in customer assets and provide clearing, custody and investment services for 13,000 institutional advisory firms and brokers.

It is the leader in the United States when it comes to 401(k) retirement savings plans and is one of the largest 403(b) retirement plan providers for not-for-profit institutions. It seems that now the world’s fifth largest asset manager is about to take a much by ICO CROWD more active stance on Bitcoin and cryptocurrency.

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Fidelity Investments has set up a subsidiary with the intention of bringing the ability to own and trade cryptocurrencies to institutional investors. The new company is called Fidelity Digital Assets. It is to be based in Boston and will provide enterprise-grade custody solutions, a cryptocurrency trading execution platform and an institutional advisory service 24 hours a day, seven days a week in keeping with the fact blockchain based markets never close. The operation is set to have around 100 staff so is no small venture.

Fidelity has mostly limited its cryptocurrency exposure to a few peripher-

al services and through donations via their non-profit Fidelity Charitable.

Fidelity Digital Asset’s initial customers are already being onboarded and it is expected that their products will be generally available in early 2019. This marks the largest push into cryptocurrency by an institutional asset manager thus far.

“This is a recognition that there is institutional demand for these assets as a class,” stated Tom Jessop, founding head of Fidelity Digital Assets. “Family offices, hedge funds, other sophisticated investors, are starting to think seriously about this space.”

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In May 2017, Quartz reported that Fidelity had started mining both bitcoin and ether. At first, it was for educational reasons, according to Fidelity CEO Abigail Johnson, but it soon started “actually making a lot of money.” The employees who embraced cryptocurrency at the company got the nickname (“bitcoin vikings”) and were even able to use bitcoin to buy lunch at the company’s Boston headquarters.

“We started exploring blockchain and digital assets several years ago,” Jessop mentioned in a statement about Fidelity Digital Assets’ launch.

In 2016 Fidelity took in $7 million worth of bitcoin in donor-advised funds where the money can grow taxfree until the account holder decides to give it away, the year after it first started accepting donations in the digital currency.

In 2013, long before the likes of Goldman Sachs started talking about bitcoin trading, Fidelity began its digital asset research through its Blockchain Incubator, eventually letting customers track the state of their Coinbase wallets on Fidelity.com.

Fidelity announced the creation of Fidelity Digital Assets at an event in Bloomberg’s New York City headquarters. The most interesting proposi-

tion to be offered by Fidelity Digital Assets is a service to give institutional investors a compliant way to secure their assets by storing them in a physical vault. One of the first crypto custody clients has been revealed to be none other than Mike Novogratz’s Galaxy Digital fund.

Fidelity provides services to over 27 million customers globally. Shapeshift CEO, Erik Voorhees has pointed out there are not, in fact, enough bitcoins in existence for each customer to own one: “It would be impossible for every Fidelity brokerage customer to own even one Bitcoin,” he wrote. “This is why Bitcoins are worth thousands of dollars, while a dollar is only worth one dollar (and only until next year when it’s worth 97 cents).

Save wisely.”

Hunter Horsley, CEO of Bitwise Asset Management, also shared his thoughts with Bitcoinist, calling this an important moment in history for this “new asset class.”

He stated: “For many institutional investors, a trusted custodian like Fidelity entering the space removes a huge obstacle to investing in crypto-assets. I think we’ll look back on 2018, and particularly this moment,

as the time that crypto became cemented as a new asset class.”

“This is a recognition that there is institutional demand for these assets as a class.

Family offices, hedge funds, other sophisticated investors, are starting to think seriously about this space.”

TOM JESSOP

Founding Head of Fidelity Digital Assets

Ben Waters, Head of Digital at IOST stated: “Institutions like Fidelity and Nasdaq entering the space can be a good thing for crypto, as long as the exploitative financial systems (e.g. fractional reserve banking, commingling, etc.) are not piggybacked into the crypto space,” he said. “Historically, the legacy financial system has been used to exploit the general public — making the rich get richer and creating centralized points of failure.”

Tom Jessop stated: “In our conversations with institutions, they tell us that in order to engage with digital assets in a meaningful way, they need a trusted platform provider to enter this space,” Fidelity is currently working with more than 13,000 institutions on asset management, according to its press release. Nikolay Storonsky, a former Credit Suisse Group AG trader turned fintech entrepreneur recently stated that “Large institutions currently have little appetite for investing in digital assets.” I tend to remain more positive about this. Only time will tell how many of Fidelities customers will seek to get involved but this cannot be a bad thing for crypto.

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Are Hybrid Dex's the Solution to Low dApp Adoption?

The world of cryptocurrency exchanges is currently dominated by Centralized exchanges often known as a CEX. Buyers and sellers of cryptocurrency meet together on a site or app intermediated by a third party. When you place your funds or crypto with the site you are trusting that third party to handle your money. This leaves centralized exchanges open to hacks.

CEX’s lend themselves well to the needs of newbies, inexperienced crypto traders who would best start off with an exchange that supports fiat-crypto trading pairs. Decentralized Exchanges remove the third party intermediary from the process of buying and sellby ICO CROWD ing and hence remains true to the distributed philosophy of the crypto community.

The peer to peer trades are executed through the utilization of smart 86

contracts. As a result, there is not as much crypto in one place for hackers to get to and are considered hard to hack. However, in reality, Bancor, a decentralized exchange, has been hacked, showing that decentralization is not always the most secure or appealing option. The downside of a Decentralized Exchange is that in the event you forget your key - you will be unable to access any funds you held on the DEX. Another downside, for now, is that most DEX’s suffer from low trading volumes and have low liquidity due to their relative lack of popularity to CEX’s.

A Hybrid is a cryptocurrency exchange which merges aspects of both centralized and decentralized exchange. Hybrid exchanges are being touted as the future of the crypto exchange industry.

They seek to provide all the functionality and liquidity of a traditional centralized exchange whilst offering the privacy and the hacking protection of a decentralized exchange.

One of the first hybrid exchange to launch was Qurrex earlier this year. The Qurrex team have been together since 2016 and consisted of experts who had significant experience working in the forex markets, developers of trade terminals, and founders of successfully operating stock and futures exchanges.

Qurrex is based in Cayman Islands and in the Netherlands.

Binance has recently released an alpha version of its decentralized exchange in the attempt to provide a more secure trading solution.

Hybrid exchanges have a greater value proposition than either centralized or decentralized exchanges to most people. Because of this, it seems to just be a matter of time before centralized exchanges will start to add decentralized features. We may even see some centralized and decentralized exchanges merging. Those that stick rigidly to either centralized or decentralized are likely to find their popularity waning.

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THE PROBLEM WITH COMPLETE DECENTRALIZATION Right now, the term dApp is a crypto buzzword. Where there is blockchain there is talk of a dApp for that. There are currently more than 2,100 active dApps and there are around 25,000 daily active users, which conversely does not seem like a lot.

apps tend to perform better in terms of simplicity, speed, and overall user experience.

Traditionally when designing a product or service a developer would need to consider how to build it, how to grow it and how to monetize it. By utilizing a decentralized protocol, it fundamentally changes the way a developer looks at Why is there such a lack of user adopmonetization. Decentralization brings tion? Is it merely a symptom of enterwith it new and interesting ways to ing the market early? I would argue monetize a product but has a negative that it is also down to the limitations of effect on building and growing it. completely decentralizing a consumer application. For dApps to gain real trac- Crypto has the potential to fundation in the crypto market we need to mentally alter the way an app developtake the best of both worlds and comer monetizes their product. Most atbine aspects of centralization and detempt to grow demand for a scarce ascentralization. The killer crypto apps of set. However, dApps inability to genertomorrow will most likely integrate de- ate network effects without consuming centralized protocols into proprietary too many resources is fundamentally centralized apps. at odds with the need to grow demand and make a profit.

WHAT IS A DAPP? A dApp is an app that runs on a shared Consider Snapchat. If it were to be improtocol and has a shared data ledgplemented as a dApp then every picture er. It is not controlled by any one entiwould have to wait for confirmation from ty. Decentralized exchanges are an exvalidators and only then would it be comample of this. mitted to the public ledger. Let’s assume it was built on the Ethereum network WHAT IS A CENTRALIZED APP? and that every daily active user sent just This is an app operated and controlled one picture it would take approximately a by a single entity. They maintain a cen- year to process them all. This, of course, tral database and have complete control ignores things such as layer-2 solutions over the user experience. Centralized and is an extreme example. Snapchat

is what it is, because of network effects (its value grows as the number of users grow) and also as a result of the networks speedy performance. In today's environment, even a five-second delay can seem like a lifetime.

Consider Snapchat. If it were to be implemented as a dApp then every picture would have to wait for confirmation from validators and only then would it be committed to the public ledger.

For an app to grow effectively the environment needs to be as frictionless as possible. The process of decentralizing every aspect of an app runs counter to what is required to grow the network and increase user adoption.

Cryptokitties is a perfect example of decentralization preventing growth.

Whilst the platform showed promise initially it never really managed to take off. There was not an issue with the concept nor the team. The service was hampered by its inability to scale effectively. As I previously said: Network effects are very important. As CryptoKitties grew in popularity the network suffered. Their product has an inherent upper limit on growth. Cryptokitties was unable to merely pull more resources from Amazon Web Services as a centralized app could do.

Decentralization brings with it many benefits such as privacy and security.

Developers need to find ways to get the best of both worlds. Certain aspects of products will benefit from decentralization and others will not.

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Morgan Stanley Calls Crypto an Institutional Asset Class Until recently the Bitcoin and cryptocurrency markets in general had been uninspiring. However, for the last few months the crypto-media have been increasingly reporting about the onboarding of institutional investors.

Headlines are awash with talk of J.P Morgan, Fidelity, Goldman Sachs, Harvard, and more all gearing up to enter the market and offer services to their clients.

Whilst the news about these legacy financial giants in promising, the number of retail investors in the space remains stagnant. This is according to a report by banking giant Morgan Stanley.

and individuals. Morgan Stanley is ranked No. 67 in the 2018 Fortune 500 list of the largest United States corporations by total revenue.

In an update to "Bitcoin Decrypted: A Brief Teach-In and Implications," Morgan Stanley’s research division delved into the last six months of bitcoin and has highlighted certain trends it has noticed.

The report was dated October 31st 2018.

The report places strong emphasis on the fact that both crypto and its thesis is rapidly morphing. It began by defining bitcoin as a form of Morgan Stanley is an American multiby national investment bank and finan“digital cash” and stated that ICO CROWD investors had full confidence cial services company headquartered in New York City. It has offices in more in it. It then suggested it ofthan 42 countries and over than 55,000 fered solutions to issues in employees, the firm's clients include cor- the current financial system, to a new payments system porations, governments, institutions 88

and eventually to a whole new investment class.

Over the coming years, we think that the market focus could turn increasingly toward cross trades between cryptocurrencies/tokens, which would transact via distributed ledgers only and not via the banking system.”

Through Morgan Stanley’s investigations they have had to modify their report about what bitcoin and crypto as it is a rapidly evolving environment. They have had to note the potential of distributed ledger technology, details of hacks, a list of hard forks, new technologies which are cheaper than Bitcoin, details of the market volatility and other concerns the report states.

Via this process of evolution Morgan Stanley has arrived at its current conclusion, that bitcoin is a "new institutional investment class," and has been for almost a year. It is estimated that the amount of crypto assets under management has been

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increasing since January 2016, with $7.11 billion currently being stored by hedge funds, venture capital firms and private equity firms.

the banking sector which charges a higher fee. Also as bitcoin prices fell, so did most all other coins so if owners wanted to come out of bitcoin holdings, they needed to go to another asset The report noted that clients had had which was closer to the valuation of the three main issue with investing in the U.S. dollar."

USDT took an incryptocurrency space, there are: regcreasing share of ulatory uncertainty, a lack of regulatMany exchange and crypto startups BTC trading voled custodian solutions and a current are jumping on the bandwagon with umes as cryptocurlack of major financial institutions in regards to stablecoins as "part of the rency prices startthe space. next wave of development." ed falling. This occurred because The report also covered the recently Morgan Stanley’s report states that many exchangpopular topic of stablecoins. they do not believe that all of these new es only trade crypstablecoins will survive "with the lowto->crypto and not Bitcoin is "moving increasingly towards est transaction costs, highest liquidity crypto->fiat. Tradtrading vs the stable coin USD-Tether and defined regulatory structure" likely ing crypto->fi(USDT) [sic]," the report notes. Around to see increased adoption. at requires going half of all current bitcoin trading is now through the bankdone against another digital asset rath- Compared to their 2017 report the out- ing sector which er than fiat currency. This is growing look is bullush. charges a hightrend which began last year. There are er fee. Also as bitmany crypto exchanges out there that The report also lists Bitcoins shortcom- coin prices fell, so do not even accept fiat currencies and ings which include issues surrounding did most all oththis has contributed to this trend, the energy consumption and a lack of a ro- er coins so if ownreport noted. bust regulatory framework. ers wanted to come out of bitcoin holdThey went on to explain: The report goes on to describe the inings, they needed to "USDT took an increasing share of BTC creasing trend for crypto tied futures go to another asset trading volumes as cryptocurrency as “surprising” and this comes at the which was closer to prices started falling. This occurred be- same time that Morgan Stanley is plan- the valuation of the cause many exchanges only trade cryp- ning to offer trading on derivatives tied U.S. dollar.” to->crypto and not crypto->fiat. Tradto the cryptocurrency. CEO James Goring crypto->fiat requires going through man stated earlier this year that a trad-

ing desk specializing in digital asset derivatives could be a potential service they offered to clients.

According to Bloomberg, Morgan Stanley has already put in place measures to offer Bitcoin swap trades. They do not wish to launch it without ascertaining institutional client demand and after completing a thorough internal review of the service.

According to Cointelegraph, Morgan Stanley has told clients that Bitcoin is similar to the Nasdaq, albeit moving “15x” faster. The bank has also predicted that financial markets will increasingly lean towards the use of crypto in the future: “Over the coming years, we think that the market focus could turn increasingly toward cross trades between cryptocurrencies/tokens, which would transact via distributed ledgers only and not via the banking system.”

With crypto-friendly noises being made both by Morgan Stanley, Goldman Sachs. and Fidelity Investments amongst other banking and financial giants could this signal the inflow of institutional investment that crypto so badly needs? Will 2019 be the year that banks learn to love crypto?

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Stellar V Ripple has recently had some good headlines in a time when most crypto news is bad. But Ripple has a competitor, Stellar. Stellar is Ripple’s open source cousin and both projects share a cofounder. Both cryptocurrencies currently sit in the top 10 cryptocurrencies by market capitalization.

With very different philosophies but similar underlying technology, is there a space for both currencies in the long term or will one end up consuming the other? Let us look at the similarities and differences between Stellar and Ripple and discover what you need to by ICO CROWD consider when deciding between XRP and XLM: Ripple has a strong financial backing and a long list of partners. It has managed to attract a lot of attention in the crypto world and mainstream media too. Ripple was founded in 2012 by Jed McCaleb and Chris Larsen. It is a digital 90

payment network for cross-border payments between financial institutions.

XRP is the cryptocurrency used as a bridge between differing fiat currencies.

McCaleb left Ripple after differences of opinion with other members of the Ripple team. He went on to found Stellar in 2014. Initially, the two platforms shared some of the same code but they have evolved into completely different codes.

Stellar mirrors Ripple in its ability to offer fast and affordable cross-border transactions. However, it uses a distributed payment network to connect banks, payment systems and users around the world. Stellars native token is the Lumen (XLM). It is this that is used to bridge differing fiat currencies.

the other hand has focused on providing low-cost access to financial services for those in the developing world.

Stellar also has a few features that Ripple does not have. Stellar is decentralized and provides a platform for the launching of ICOs. Ripple is a privately owned blockchain company that provides services to other companies. Whereas Stellar is a non-profit organization with the goal of enabling a more inclusive global payment system.

Whilst initially sharing a large amount of source code the projects have diverged. Ripples payment protocol uses a proof-of-correctness consensus mechanism based on majority validation.

From a technical standpoint, they are The mechanism is applied every few both very similar projects fulfilling very seconds by all nodes to maintain the similar needs. Their biggest difference agreement of the network. is their philosophy. Ripples focus is on improving the cost and efficiency of in- Stellar uses Stellar Code as its payment ternational transfers between banks protocol. It is based on the Stellar Conand financial institutions. Stellar on sensus Protocol algorithm. Its consen-

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S Ripple sus model is called a Federated Byzantine Agreement and is capable of reaching consensus without the need to rely on a closed system to accurately record financial transactions.

The maximum supply of Ripples XRP is capped at 100 billion. The initial supply of Lumens was also set at 100 billion. To protect the XRP Ledger against spam payments and denial of service attacks a small amount of XRP is consumed and destroyed in each transaction. These charges mean that the total amount of XRP will decrease over time.

Stellars XLM, however, is designed to be inflationary with a fixed inflation rate of 1%. All transaction fees are recycled and not destroyed.

Ripple has been the subject of much criticism in regard to its centralized nature.

In fact, some people claim it is not even a real cryptocurrency. Much of the criticism of Ripple comes from an incident that occurred in 2015 when the XRP held by co-founder Jed McCaleb were frozen following his departure from the project.

It raised serious questions about the amount of control Ripple holds over XRP and its payment network. Ripple CEO Brad Garlinghouse addressed this issue, using Quora to refute suggestions that Ripple is overly centralized. He posted: “Ripple is not centralized. To be clear, if Ripple disappeared today XRP would continue to function.

To me, that’s the most important measure of whether something is decentralized.” Stellar on the other hand is a fully distributed offering.

Ripple has made an impressive start to transform the way we perform international payments, getting on board an impressive range of partners. Stellar does not have quite as impressive a list of corporate backers but IBM and Deloitte are notable supporters of the project.

The biggest hurdle for the future of Ripple is whether it can achieve widespread adoption by the banks, financial institutions, and corporations of this world. It will face competition not only

from Stellar but also from established players in the transfer market such as SWIFT and Visa. It is also threatened by banks developing their own blockchain solutions.

Ripple is not centralized. To be clear, if Ripple disappeared today XRP would continue to function.

To me, that’s the most important measure of whether something is decentralized.

Stellars altruistic philosophy and focus on the developing world could see it fail to achieve the heights of other initiatives that are highly focused on profitability. However, If Stellar can underpin a new financial system that helps the unbanked have access to a banking system it could take a sizable chunk of the estimated $380 billion US dollar opportunity.

To aid in mass adoption of Stellar Lumens they have recently announced a $125 million US dollar airdrop to be given out to all Blockchain wallet holders. Blockchains support of Lumens BRAD combined with this airdrop will potenGARLINGHOUSE Ripple CEO tially create 30 million new users of the token. The Stellar community is split over whether this is a good idea, however, all have signed up for their free Lumens.

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To Boldly Go Where No Blockchain Has Gone Before 92

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A wide range of industries globally depend on the supply of commodities from underground such as minerals and metals. The worlds dependency of various high-tech-industries on rare earths is a recent issue, coal, on the other hand, is still one of the leading global energy resources.

As a result, the mining sector is pivotal to the world’s economy. Of the global top 40 companies, which represent a vast majority of the whole industry, reported some 496 billion U.S. dollars of revenue in 2016 alone.

Now a blockchain startup is making plans to create what could potentially be a trillion dollar industry after taking over a space company hopby ing to mine near earth asICO CROWD teroids.

and policy, and brought the promise of space resources irreversibly closer to humankind's grasp," "I am proud of our team's extraordinary accomplishments, grateful to our visionary supporters, and delighted to join ConsenSys in building atop our work to expand humanity's economic sphere of influence into the Solar System."

If humanity can find ways to reduce the cost of space travel they have the potential to tap into trillions of dollars of minerals that are floating in space. Potentially there is a to all purposes infinite supply of resources within the confines of our solar system.

“Over the course of nearly a decade, Planetary Resources has simultaneously pioneered technology, business, law and policy, and brought the promise of space resources irreversibly closer to humankind’s grasp.

I am proud of our team’s extraordinary accomplishments, grateful to our visionary supporters, and delighted to join ConsenSys in building atop our work to expand humanity’s economic sphere of influence into the Solar System.”

Planetary Resources has had some high profile backers since it formed in 2009. Larry Page who co-founded Google provided $21.1 million during a funding round in 2016.

Chris Lewicki, a former Nasa worker who helped co-found Planetary Resources stated: "Over the course of nearly a decade, Planetary Resources has simultaneously pioneered technology, business, law

ConsenSys founder Joe Lubin shared his view stating that the space firms actions were in line with his company's belief "in the potential for ethereum to help humanity craft new societal rule systems through automated trust and guaranteed execution."

He went on to say: "It reflects our belief in democratizing and decentralizing space endeavours to unite our species and unlock untapped human potential.

We look forward to sharing our plans Asteroids that have been deemed and how to join us on this jourcommercially viable are suspected to ney in the months ahead.” contain minerals including gold, silver and platinum which Planetary Lewicki, who has got on board Resources suspect could potentially was formerly a flight direcbe mined and delivered back to plantor that was involved with et Earth. the Mars rovers and Phoenix Mars lander before his time at Planetary Resources.

He stated:

Planetary Resources was acquired by ConsenSys on the 31st of October whose stated aim is "democratising and decentralising space endeavours."

Planetary Resources was founded in 2009 under the name Arkyd Astronautics, it is reported they had over 30 investors at one point. In better days, they managed to raise over $50 million in investment, which funded the launch of two satellites into orbit this year. The company fell upon hard times in early 2018 when they could not raise sufficient new funds, and they had to lay off many employees.

This also led them to postpone the 2020 launch of their first asteroid prospecting mission indefinitely.

dering and commerce in space – the only domain of human activity not ordered around territorial sovereignty – in which a diverse range of actors from a growing number of countries must coordinate and transact,".

ConsenSys co-founder Joe Lubin stated:

The United State government has recognised the vast mineral resources held in asteroids by legalising asteroid mining in 2015 in a step away from the 1967 Outer Space Treaty that initially banned it.

The acquisition of an interplanetary mining company by a blockchain startup did not come as a surprise to Brian Israel who has previously served in the U.S. State Department’s Office as a Legal Adviser, taking control for “the international legal dimensions of outer space, oceans and international environmental governance matters, and also served as U.S. Representative to the United Nations space law body,” said: "Ethereum smart contract functionality is a natural solution for private-or-

“I admire Planetary Resources for its world class talent, its record of innovation, and for inspiring people across our planet in support of its bold vision for the future. Bringing deep space capabilities into the ConsenSys ecosystem reflects our belief in the potential for Ethereum to help humanity craft new societal rule systems through automated trust and guaranteed execution. And it reflects our belief in democratizing and decentralizing space endeavors to unite our species and unlock untapped human potential. We look forward to sharing our plans and how to join us on this journey in the months ahead.”

Their report concludes, it indicates that the “initiatives” of ConsenSys will be performed out of the former facility that Planetary Resources used in Redmond, WA. 93

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Who is Jed McCaleb?

Jed McCaleb is a big name in the world of crypto. He has been part of some of the crypto worlds biggest projects and his name will go down in crypto history as the founder of Mt Gox and co-founder of Ripple and the Stellar network. The innovations he has worked on have become some of the most respected names in crypto.

This sometimes controversial characters projects haven't always worked out how he expected. Some have become amazing successes with two of his founding currencies in the crypto top 10 by market cap and others have ended in lawsuits, hack attacks and bankruptcy. Let's by ICO CROWD take a look at his life and the projects he has worked on up until now.

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Jed was born in 1975 Little Rock, Arkansas, and attended the University of California, Berkeley. He dropped out and moved to New York City.

In 2000, McCaleb founded Metamachine Inc and released the eDonkey2000 application. He was joined

by Sam Yagan who assumed the position of CEO and McCaleb served as the CTO whilst continuing to develop the peer-to-peer file sharing software system. At its peak the network had over 4 million active users at any one time. In 2006 as a result of legal action with the RIAA eDonkey, eDonkey2000 and Overnet were taken down and Jeds company reached a settlement with the RIAA where the company would pay $30 million US dollars to avoid a copyright infringement lawsuit.

In 2007, Jed bought the domain name Mtgox. MtGox actually stands for Magic the Gathering Online Exchange and it was his intention to create a trading site for the Magic the Gathering card game. He soon moved on from his idea and repurposed the site in late 2010 after becoming interested in Bitcoin. He turned MtGox into a Bitcoin exchange that allowed bitcoin to dollar trading.

The site grew rapidly in late 2011 he sold a majority stake in the company to Mark Karpelès. By 2013 and into 2014 it was handling over 70% of all bitcoin transactions worldwide, as the largest bitcoin intermediary and the world's leading bitcoin exchange. He remained a minority owner in the company until its collapse in 2014.

In 2011, McCaleb started work on developing a digital currency OpenCoin

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which was to become known as the Ripple network. It differed from Bitcoin as it was premined and has centralized aspects to it that allow for low fees and rapid transactions. Jed recruited David Schwartz and got investment from Jesse Powell then adding Arthur Britto as chief strategist.

sale of the tokens for the sake of the XRP ecosystem.

When the Stripe deal failed, Jed tried to remove co-founder Chris Larsen from the organisation. With his girlfriend, Jed approached Arthur Britto and discussed how Larsen should be removed from Ripple. The suggestion didn’t sit well with Britto who arranged a meeting with Roger Ver, Jesse Powell and top levels members of the Ripple team. Jed’s proposition that Chris Larsen be removed was voted down by five to one.

Around this same time Jed was to go on to start Stellar, an open source cryptocurrency very similar in nature to the ripple network.

I have given away and donated some of Jed was considered to be one of the my 9 billion best cryptographers around at the time of developing what was to become RipXRP to charple. His experience in developing eDonities such as key2000 became invaluable.

MIRI, Literacy Bridge, Give DiAlthough it was McCaleb who founded the OpenCoin team it was Ryan Fug- Jed left Ripple whilst still holding 9 bil- rectly, Mission ger who founded the Ripple project in lion XRP. The Ripple team were very Bit and others.

2004. concerned that a holder of this much I plan to start Ripple could severely impact the XRP selling all my reThere was some controversy when Jed ecosystem. Ripple prices dropped 60% maining XRP helped his girlfriend, Joyce Kim, secure when Jed announced online that he investment from Ripple Labs for her would be selling his XRP and donating beginning in start-up SimpleHoney. some to charity. He wrote: two weeks. Because I have imRipple was to then go on to give Joyce ” I have given away and donated some mense respect a job as Chief Engagement Officer. Her of my 9 billion XRP to charities such reign was not to last long as she was as MIRI, Literacy Bridge, Give Directly, for the commukicked out of Ripple Labs in 2013. AlMission Bit and others. I plan to start nity members though she no longer worked there Mc- selling all my remaining XRP beginning and want to be Caleb continued to involve her in Ripin two weeks. Because I have immense transparent, ple matters which earned her the nick- respect for the community members I’m publicly anname “Yoko Ono”. and want to be transparent, I’m publicly announcing this before I start. So nouncing this After his girlfriend’s departure McCaleb just fyi…. xrp sales incoming.” before I start. sought to sell Ripple Labs to fintech So just fyi…. company Stripe for an alleged $13 mil- The remaining Ripple team had to lion US dollars but it didn’t happen for move to reassure users that they could xrp sales incomundisclosed reasons. At the time Mcfind a solution that would prevent ing” Caleb and Larsen were holding around 20% of all the XRP (around 18 billion XRP) and there were talks about the

Jed mass dumping his XRP. A deal was struck with Jed who promised to limit his token sales for the next seven years.

Jed allegedly broke the deal he had struck regarding his XRP holdings and became embroiled in a legal dispute with Ripple. Bitstamp froze 100 XRP that were being held by Jeds family members, it was claimed his family were attempting to sell, circumventing Jed’s agreement with Ripple.

Ripple came to a deal to end the dispute and to change the terms if Jed sold all his equity in Ripple. The new terms of the deal allow Jed to donate 2 billion XRP to a charity of his choice. Both Jed and the charity would not be able to sell more than .5% of the daily volume for each day of the week. During the second and third year the percentage would increase to .75%, 1% for the fourth year and 1.5% onward. Jed and his children owned 5.3 billion XRP at the time of the settlement.

Ripple would in turn agree to the release of the disputed 100 million XRP that remained locked with the US District Court for the Northern District of California, and these funds would be donated to Stellar.

Jed McCaleb remains an active part of the Stellar community. Stellar has recently announced it will be distributing $125 million of Lumens via Blockchain wallets as they start to support JED MCCALEB the coin. This is intended to help with mass adoption.

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Are Institutional Investors Coming to Crypto?

It is often said that crypto will remain on the fringe of the financial world until it is accepted by institutional investors. But institutional investors are getting more involved in cryptocurrency markets than you may realize.

Hedge funds have replaced high networth individuals as the main buyers of large amounts of cryptocurrency according to Bobby Cho, the global head of trading at Cumberland, the cryptocurrency trading arm of DRW Holdings LLC, which deals with over the counter by ICO CROWD purchases. Over the counter, purchases do not occur on exchanges and statistics are not always readily available as to volumes.

The main sellers remain miners who are rewarded with currency for processing transactions on the various networks. Many large-scale mining operations have their own liquidy desks.

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“What that’s showing you is the professionalization that’s happening across the board in this space,” Cho has said.

“The Wild West days of crypto are really turning the corner.”

Last April over the counter markets dealt with anywhere between $250 million to $30 billion in trades per day according to Digital Assets Research and the TABB group. Coinmarketcap states that exchanges are handling around $15 billion per day in trades.

coming more comfortable diving into the space."

Large buyers and sellers have been trading privately in over the counter sales and avoiding exchanges as prices fluctuate on exchanges and the two parties do not need to worry about sudden price changes just as the transaction is about to place. These trades also do not affect market prices when large sums change hands.

Institutional advisers have decided to enter into crypto as the market appears to have matured and the wide price swings have calmed.

When miners liquidate coins they are often doing this via over the counter trading. According to Tom Flake of Because, the largest miners sell their coins to sellers directly or via a brokerage.

"One of the biggest criticisms of crypto by institutional investors has been the volatility," Cho has stated. "Over the last four to six months, the market has been trading in a very tight range, and that seems to be corresponding with traditional financial institutions be-

Another reason institutional investors are buying from sources other than exchanges is that quite often there are not as many coins available for sale as they would like, according to Sam Doctor, the managing director of Fundstrat Global Advisers.

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“At this point in time, because more and more institutions are beginning to enter the market, there’s more of an imbalance,” Doctor has said. “That’s why brokerage firms are springing up to help institutional buyers find inventory”.

Fred Ehrsam, co-founder of Coinbase Inc, former Sequoia Capital partner and ex-employee of Pantera Capital have reportedly launched the new cryptocurrency hedge fund.

Yales $30 billion US dollar endowment is led by David Swensen who has invested an undisclosed amount in Paradigm as part of the institutions vision to allocate 60% of its investments into alternative assets by 2019.

er firms accumulating cryptocurrencies like bitcoin and Ethereum in large amounts.

I have given away and doCoins purchased from miners have a nated some of unique quality that is strongly desired my 9 billion by institutional investors. These coins can command a premium of 20% above XRP to charities market value. The benefit to the insuch as MIRI, vestor is that they can show the coin's For three decades the Yale endowment provenance and prove that the coin has has outperformed every academic insti- Literacy Bridge, Give Directly, not been involved in illicit or money tution in the United States. As a result laundering operations. of this unparalleled success, Swensen Mission Bit and has become one of the most influenothers. I plan to Bloomberg has reported that Yale tial figures in the institutional invesstart selling all University, the Ivy League school tor market. my remaining whose endowment is the second-largest in higher education has invested In June this year, Erik Schatzker, a bil- XRP beginning in a new cryptocurrency hedge fund lionaire investor told the Bloomberg In- in two weeks. called Paradigm who has raised over $400 million US dollars from a range of investors.

vest Summit in New York that the entrance of a major institutional investor into the crypto market will lead to oth-

“It won’t go there ($20 trillion) right away. What is going to happen is, one of these intrepid pension funds, somebody who is a market leader, is going to say, you know what? We’ve got custody, Goldman Sachs is involved, Bloomberg has an index I can track my performance against, and they’re going to buy. And all of the sudden, the second guy buys. The same FOMO that you saw in retail [will be demonstrated by institutional investors],” suggested Novogratz.

Yale is one of the first major institutional investors in the market. It is quite feasible that this bold first move could spark fear of missing out (FOMO) amongst other institutional investors. could this explain the recent improveNovogratz ment in crypto prices and signal an end to the crypto winter?

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Would Crypto Benefit From a Global Recession?

Western stock markets seem to have run out of steam and even though the Chinese government has taken major steps to reassure their markets, it has not restored the previously positive mood.

by ICO CROWD

Some fixed-income managers are still saying they can see value in the current yields despite the potential of a global slowdown. If they are right, depends on what happens in the global economy and if central banks hold their tightening strategy.

What appears to be happening is investors are reassessing their predictions and expectations of trends in the bond market which is cause for concern. This could be the end of the Global Financial Crisis and the start of a whole new crisis on a scale never before seen.

Like the events that led up to the Asian Crisis of 1997, the dot.com crash of 2001, and the mortgage bubble that caused the financial crisis of 2007 we need to refocus ourselves on real stocks that produce real profits. Not ones living off cheap debt and promises of future profits.

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Prices have been distorted by the long-term effects of quantitative easing Central banks are still bringing on cheap corporate debt and the effects of quantitative easing continue to distort prices. Prices will have to adjust downwards eventually. Liquidity has stalled for technical reasons such as market making being regulated almost out of existence. Savvy investors are not going to buy bonds at current levels. They will wait for a correction. The prospect of inflation threatens to devalue investments and people are unwilling to buy at rates that have a real possibility of leaving holders with real terms negative returns. Anyone investing in that market now is gambling on the central banks stepping in to distort the market again by keeping rates artificially low.

Netflix is in the process of issuing $2 billion US dollars’ worth of bonds.

This will provide money to make 1.3 months’ worth of box-set production.

Even when you take in to account its subscriptions its burn rate is around $1 billion US dollars per month. Somehow it is valued at $140 billion. The market does not seem to care about the lever-

age involved here. Its extraordinary valuation is purely notional, only existing if the market believes.

Meanwhile, all is not well in the European Union. Should they tell Italy the budget is unacceptable? Should they fine the Italians for even proposing it and risk a populist uprising across the country? Or should they turn a blind eye to the rule-breaking budget causing anger across the northern EU states and Germany?

Whilst Italy has the largest debt of all nations in the EU the debt is held largely in domestic hands. The north remains very wealthy, but the south is poverty stricken. The country is currently incapable of making the structural reforms and adjustments needed to address these imbalances and improve the underlying economy.

Next year the head of the ECB changes and there is an increasing likelihood of a populist dominated EU parliament blocking the decision-making process in Brussels.

The prospect of a no deal Brexit also hangs heavy over Britain and the EU.

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The short-term effects to both economies could plunge Europe into a recession. Many European nation states are already heavily debt-burdened such as the PIIGS (Portugal, Italy, Ireland, Greece, and Spain). DeutcheBank’s balance sheet is looking far from healthy and it would be heavily exposed in the event of a no deal Brexit. Combine this with problems in Italy with their rejected budget and economic instability in Turkey and you have an economic disaster waiting to happen.

The United States move to tackle the trade imbalance by imposing tariffs on its trading partners, also threatens to upset global trade. President Donald Trump has embarked on a mission to impose retaliatory tariffs on goods ranging from milk, cars, and steel to electronic goods. Whilst the United States is not massively reliant on imports it will affect those who it trades with greatly.

BRICS nations seem to be collectively suffering a currency crisis. During these times of economic uncertainty, many are seeking to place their money in “safe havens” and they have seen sig-

nificant devaluations in their currencies. This is an issue for them as countries, in most cases they need to make purchases on the international market in dollars and their currencies are buying fewer dollars.

Instability in Saudi Arabia also threatens to throw the current economic order into turmoil. The recent scandal where a journalist was murdered in the Saudi Embassy in Turkey has seen Germany impose sanctions and other nations are threatening to do so. They have an ongoing war in Yemen that they seem unable to win and their income from oil has dropped significantly since the United States became a net exporter of oil. Saudi Arabia and the United States are intrinsically linked to each other because the petrodollar is the basis of the world’s current economic order.

The world’s economy is currently very fragile, and we could be on the verge of a global recession.

Banking behemoth JPMorgan Chase predicts there is a 60 percent chance that the next US recession will occur

by 2020 which will cause shockwaves around the world. In the event of a global market crash, could crypto become the viable alternative to our existing stores of value?

The probability of a U.S. recession within one year is almost 28 percent and rises to more than 60 percent over the next two years, researchers wrote in a note this week.

Over the next three years, the odds are higher than 80 percent, according to the note” Bloomberg

“The probability of a U.S. recession within one year is almost 28 percent and rises to more than 60 percent over the next two years, researchers wrote in a note this week. Over the next three years, the odds are higher than 80 percent, according to the note,” Bloomberg reported.

Contrastingly the Federal Reserve Bank of New York states there is only a 14.5 percent chance of a recession occurring before the end of 2019.

As the risk of recession grows and an increasing number of economists are forecasting a market crash and a major recession, the demand for crypto has grown rapidly. Putting aside the spike at the end of 2018 the crypto market has grown steadily.

There have recently been signs that institutional investors are increasing99

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ly getting involved in the cryptosphere.

Big names such as Fidelity, Goldman Sachs, and Citigroup have been putting in place the infrastructure to target institutional investors that are looking to invest in the digital asset market.

Banks have until now been prevented or felt the cryptocurrency sector too risky to enter the market. However, experts have noted a sudden entrance of major financial institutions entering into the crypto market and this suggests that demand for crypto from investors in the traditional finance sector is increasing rapidly.

Portfolio manager at Artisan Global Opportunities Fund, Jim Hamel explained, the digital payments industry has experienced exponential growth in recent years, which could naturally lead investors to cryptocurrencies.

“There are a number of tailwinds contributing to this trend. First, we’re seeing rapid growth in e-commerce, which requires that customers be able to make secure digital payments. The growth in cross-border transactions and the general impact of an increasingly globalized marketplace are helping accelerate this trend.

The long-term deterioration of US financial markets and the end of US global economic hegemony is being predicted by several economists including Peter Schiff and Nouriel Roubini. In the event this happens we will see people turning to crypto and gold as faith in fiat US dollars wains.

There is an old saying in economics; “when America sneezes, the world catches a cold.” and any US downturn will have a significant effect on both Asia and Europe. When US stocks recently suffered one of their worst selloffs in years, deleting all gains made in 2018 analysts stated that Asian markets have become much more vulnerable to a correction.

Kathy Lien, managing director of FX strategy at BKAM, said: “It’s not in an environment of positive growth trend so the pressure will be exacerbated in the emerging markets compared to the U.S. market. Unfortunately, this is the beginning. I think that when we get sentiment shifts like these, they always last longer than we

fect on stocks, real estate and financial markets in Asia.

US Empire now pays half a trillion dollars in interest payments per year to service its debt. US debt increases by a trillion per year.

It’s a death spiral that cannot be undone.

Self-destruction and USD collapse are unavoidable. Get out of USD and US stocks. Buy gold & crypto” KIM DOTCOM

The IMF shares many of Kim Dotcoms concerns regarding US debt levels and recently emphasized that the US must stop ignoring the seriousness of its federal debt held by the public.

Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities, has stated: “Even if you think that public debt just doesn’t matter to economic outcomes, the thing you have to admit is that when we hit a downturn, governments are less likely to take significant steps if the debt is as high as ours is now,” Over the next 10 years, the adoption of cryptocurrencies will improve to a point when merchants, retailers, and businesses embrace digital assets as a proper payment method, It will provide consumers with unparalleled financial freedom, increasing the value of digital assets.

Dotcom has stated: “Crypto is replacing fiat at an accelerating rate. It’s still early days but within 10 years you can pay all your bills, goods and services with crypto. No more bankers and politicians gambling with your money at the bullshit casino. Encryption + Crypto = Freedom,” A natural solution to falling markets is through govern-

Kim Dotcom, a German Finnish tech entrepreneur living in New Zealand is claiming that the US economy is heading towards an inevitable crash. He is best known for his very public battle with US authorities over his video sharing site - Megaupload.

He is also well known within the blockchain community as a renowned investor in cryptocurrency.

He has publicly stated on Twitter: “US Empire now pays half a trillion dollars in interest payments per year to service its debt. US debt increases by a trillion per year. It’s a death spiral that cannot be undone. Self-destruction and USD collapse are unavoidable. Get out of USD and US stocks. Buy gold & crypto.”

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would like to see, and we could see the selling continue for some time.”

If the US economy does crash as many are predicting, major financial institutions like JP Morgan are predicting it will have a massive knock-on ef-

ment intervention.

Most western nations do not have the ability to lower interest rates any further and are instead having to turn to unconventional methods such as quantitative easing. However, QE will inevitably lead to inflation. A situation may arise where the very tools that nation-states use to balance the economy and help it to recover from a downturn may inadvertently usher in the rise of crypto. It is quite possible we are on the verge of a process known as “hyperbitcoinization”.