Warren Buffett, Crypto Troll

Recently, Warren Buffett continued his gratuitous criticism of bitcoin, stating that it “has no unique value at all. It doesn’t produce anything. You can stare at it all day and no little bitcoins come out.”

Previously he has said that “Cryptocurrencies will come to bad endings … If you buy something like bitcoin or some cryptocurrency, you don’t really have anything that has produced anything.”, and other similar statements include, “You can’t value bitcoin because it’s not a value-producing asset.”, as well as “It’s a gambling device …. Bitcoin hasn’t produced anything.”

Although Warren Buffett claims not to know much about the internet, he is essentially trolling the crypto community. The headlines of the press in this revolutionary field were predictable, and one of the most revealing ones happened to be “Billionaire Warren Buffett Remains Clueless About Bitcoin”.

Here’s the real story about Warren Buffett and Bitcoin

Don’t fall for his feigned ignorance. He knows exactly what he is doing. While he may not be able to explain how the Lightning Network works, Mr. Buffett understands money and banking. He knows that bitcoin has the potential to disrupt the financial sector radically, in the same way that Amazon has disrupted retailing.

Let’s keep in mind that Warren Buffett has made most of his fortune by investing in the financial sector. As of the most recent filing for Berkshire Hathaway, 7 of his 10 largest holdings were in banks or related companies.

Like most people’s incentives in life, with Mr. Buffett you need to follow the money. Cloaked in folksy ignorance of technology, the billionaire’s attack on bitcoin is a measure of worry from the banking system’s largest beneficiary. Don’t ever forget that asking Warren Buffett what he thinks about bitcoin is like asking a taxi driver what he thinks about Uber.

In the next section of the article, we will break down Buffett’s disingenuous argument

Bitcoin’s Value

Warren Buffett knows perfectly well that bitcoin is money and that no government-issued currency has “intrinsic” value. US dollars, gold, bitcoin, etc. have value only to the extent that they are scarce and are commonly accepted to purchase goods and services. Money is a symbol, a representation of purchasing power; it is not valuable in itself.

If you are confused about money and intrinsic value, here is a thought experiment for you. Imagine that aliens show up tomorrow and want to sell us a cure for cancer. They want something valuable in return, to take back to their planet. Well, stacks of rectangular bills, atomic element 79, and 1s and 0s in a computer network probably won’t be seen as very valuable in their world. They are going to want something that has intrinsic value to them, like a work of art, not just a symbol of purchasing power on Earth.

Productivity

Warren Buffett doesn’t want the public to think of bitcoin for what it really is: money. Maybe because if people think of it as money, which can be exchanged directly with other individuals almost instantaneously and almost for free without going through a bank, it might cause a little problem for 7 of his 10 largest investment holdings.

Therefore, he makes the insightful observation that you can stare at this new-fangled money all day long, but it doesn’t produce additional little bits of money. Unlike staring at US dollar bills, you might be thinking…

The mistake is to think he is stupid or that he doesn’t get it. If you believe that, you fall for his deception. He gets it all right and he knows that bitcoin is incompatible with traditional payment methods and a fractional reserve banking system. Bitcoin is an existential threat to his banks. It is no random coincidence that Warren Buffett attacks the enemy of his financial empire, and does so in such a dishonest manner.

Fraud

Warren Buffett intentionally conflates bitcoin with utility token issuers, to scare the general public. Just one of his top holdings, Wells Fargo, has paid almost $15 billion in fines over the past 20 years. All of the US banks he is invested in have benefitted from government bail-outs. Buffett knows well that the greatest perpetrators of fraud, and the greatest cost to society, come from his portfolio companies, not from bitcoin.

The Oracle’s Secret

The biggest issue that Warren Buffett and others who really understand banking is trying to keep secret is much more sinister. What they really don’t want you to know is this: commercial banks create the majority of the money supply. Read that again: most of our money is created by privately-owned commercial banks. Not the Federal Reserve, not other central banks, not by the state.

Don’t believe that commercial banks create money? Well, how about asking some central banks themselves? In the United Kingdom, according to an obscure report in their in-house journal, the Bank of England states that 97% of the money supply comes from credit money creation by commercial banks. In Germany, according to the Bundesbank, the vast majority of money is created by commercial banks. In Switzerland, it is about 90%. Guess what it is in the United States? The percentage varies over time, but it is broadly above 90% in advanced economies.

Buffett’s banks create money in two ways.

  1. Through the creation of loans and concomitant deposit accounts. In this way, banks are essentially monetization entities: they exchange the requirement for future cashflows for the grant of purchasing power today.
  2. Through a credit multiplier effect, as deposits are moved between banks. Banks receiving new funds keep a fraction in reserve and then lend out the rest, growing the money supply.

Essentially, a commercial bank’s charter to grant loans is an authorization to create purchasing power, via deposit accounts. Banks then decide who in society gets to receive this purchasing power and the links between insider groups and banks is what contributes the most to inequality in society.

Bitcoin is fundamentally incompatible with this system, since there is no ability to create money with bitcoin.

Warren Buffett doesn’t attack bitcoin because he is worried about people losing money

On the contrary, he is behaving as a rational actor, concerned about his investments. He is protecting the geese that lay golden eggs: the banks that create money for him and his friends.

You want to know when adoption will really kick off, when the bitcoin price will increase significantly? Well, that will happen as more and more people learn about Warren Buffett’s true motives and the secret his banks are hiding.

So, when you hear Warren Buffett dismiss bitcoin, don’t rise to his baiting; see the troll for who he is. Money is about more than value; it is also about our values as a society. For those of you in the community of believers, recognize his attacks for what they are: a validation that bitcoin is increasingly challenging a corrupt old establishment.

Robert Sharratt lives in Geneva, Switzerland and writes about how banks suck. You can follow him here: @ReassureFin.

Image credit: Huffington Post

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Litecoin reduces transaction fees by 10x

On May 7th 2019, a blog post of the Litecoin.org project has announced the release of a new client software version: Litecoin Core v0.17.1. The update brings slight user interface changes, a new wallet format, extended privacy features, and a significant network fee policy change which effectively reduces the minimum transaction cost from 0.001 LTC/kb (the default value of the previous client) to 0.0001 LTC/kb.

This is great news for both Keynesians who want to spend their coins, and Lightning enthusiasts who want to onboard the second layer at a fraction of the Bitcoin cost. However, according to data provided by Bitinfocharts, Charlie Lee’s coin has never really faced a lot of demand for block space: the busiest day was December 20th 2017, and the average fee was around $1.5. After the phenomenal bull run has passed, the transaction costs have returned to a price ranging from one to four cents.

Litecoin Core 0.17.1, lower fees, and the Lightning Network

As soon as the 0.17.1 Litecoin Core update gets adopted by a majority of nodes, even writing your transaction in a full block cost as little as $0.15 (ten times lower than the bull run amount). This means that under regular conditions of low demand, the average fee will be lower than a cent. In terms of opening a Lightning Network channel, this is exactly what is needed to increase adoption and tackle the criticism of costs, as Atomic Swaps from LTC to BTC become possible.

In a nutshell, instead of opening a Bitcoin channel and paying the higher fee, you can go for Litecoin. As soon as you’ve joined the Network, you will be able to exchange your LTC for BTC and benefit from all the merchant adoption and network effect. This also means that there will be a lot more going on for Litecoin, to keep up with the latest developments.

More privacy for Litecoin

Also part of the Litecoin Core 0.17.1 update is the coin selection feature which enables greater privacy for user UTXOs. Furthermore, support for partially signed transactions has been added in order to “simplify workflows where multiple parties need to cooperate to produce a transaction”. This inclusion, which is an adaptation of Andrew Chow’s 2017 BIP 174, is meant to enable greater functionality for hardware wallets, multisig setups, and CoinJoin transactions.

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As announced in January 2019, Litecoin has set a greater goal to attain fungibility and privacy. Part of this quest is the addition Confidential Transactions, and the solution of choice seems to be that of creating extension blocks through the Beam MimbleWimble implementation.

While the Core 0.17.1 update doesn’t swerve the protocol in this direction, it opens up the door for some tricks and fixes that will definitely improve the privacy. Furthermore, it’s going to be interesting to see to which extent the Litecoin developers are interested in forking a CoinJoin wallet such as Wasabi and allow LTC users to mix their coins. Definitely, this solution is no substitute for Confidential Transactions, but it can be a great tool for privacy nonetheless.

The economics of low fees for Litecoin

The main reason why Litecoin affords to take this risk of lowering the miner reward for writing transactions into blocks is that the creation of Charlie Lee is the leader of its mining algorithm and has no serious competition. Therefore, miners can’t really rebel and switch to something else that they might find more profitable (such as Digibyte and Dogecoin).

However, it’s very likely that this protocol change has been negotiated in advance and the financial considerations regard greater adoption and resulting economies of scale. The fee market is still in its early phase, and miners are still making most of the profits from the rewards given for discovering new blocks.

If more merchants accept Litecoin as a mean of payment and more people open LTC Lightning Channels, then there will be significant gains for those who secure the network. Furthermore, if Litecoin earns a reputation for being the major cryptocurrency with the lowest on-chain fees which also offers a gateway to the Lightning Network, then there will be much more enthusiasm surrounding digital silver.

Traders willing to get on exchanges greatly benefit from the lowered fees (especially during bull markets), Lightning enthusiasts will definitely prefer to experiment with the cheaper way of onboarding the Network, and everyday users who make transactions will love the cost reduction. It’s a win-win-win situation in a competitive environment where Bitcoin forks like BCH and BSV constantly market their low fees. Furthermore, since Litecoin is loyal to the king and actively supports it, this is good news for BTC and Lightning.

Crypto Insider has contacted Litecoin Core developer thrasher in order to comment on the changes brought by the fee reduction. His reply was the following:

The rationale was that the team and I decided that we wanted to make transaction fees cheaper for everyday use. Miners will still earn coins from the block reward, despite a reduction in the fees they collect. There always needs to be a balancing of fees, otherwise the network is at risk of getting spammed. At the same time, we also want to make it cheap enough so users don’t pay anything excessive for regular transactions or for participation in the Lightning Network. We hope to spur more adoption as time goes by.

 

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Binance no longer #safu: Hackers steal 7000 BTC

On May 7th 2019, Binance has announced the identification of a security breach which led to the withdrawal of 7000 bitcoins. According to the official blog post, the hackers have been able to obtain “API keys, 2FA codes, and potentially other info”. This marks the first time when the exchange gets hacked, and sets a precedent in terms of public relations and trust.

More specifically, the news about the incident broke from official sources, and it was after a scheduled maintenance that the information was made public by both the Binance blog and the exchange’s CEO Changpeng “CZ” Zhao.

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About two hours later after this seemingly self-assuring post, it was revealed that 2% of the “hot wallet” BTC holdings have been stolen. It turned out that 7000 bitcoins were not as #safu (a meme-able jargon for “safe”) as initially expected. Yet as a way of making the situation transparent and possibly regain the trust of traders and investors, the malevolent transaction has been made public for everyone to see. You may view it on the Blockchain.info block explorer by clicking this link.

Details about the Binance hacking and its aftermath. Are funds still #safu?

According to the blog post, the hackers have used multiple accounts in order to orchestrate a well-timed attack which passed the security checks without being blocked, but rang the alarm nonetheless. Consequently, a thorough investigation will be made by the exchange’s security experts, and it’s estimated that Binance will not allow deposits and withdrawals for an entire week. On the other hand, internal trades between various cryptocurrencies will go on as usual.

In spite of this attack, CEO Changpeng “CZ” Zhao is committed to be transparent, reveal every step of the investigation, and even carry on with the scheduled Twitter AMA (Ask me anything).

Binance also promised that the #safu fund will cover the incident in full, so that no user balances and portfolios get affected. At press time, 7000 bitcoins are worth about $40.63 million.

Community reactions

While some members of the crypto community have praised the transparency and the willingness to make sure that no user suffers any losses thanks to the so-called #safu insurance fund, others were eager to point out that Binance’s clean slate has been tainted by this unexpected hacking.

For instance, prolific meme creator Crypto Meme Central has taken his time to portray a helpless Binance CEO Changpeng “CZ” Zhao whose vault of bitcoins gets raided by an anonymous thief.

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On the other side of the debate, a large number of Twitter users have posted positive messages which praise the open head-on approach. Most of them can be found right below the CEO’s official announcement, and Alex Beadi’s is representative for most reactions displayed in the comments section.

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Later edit: less than an hour after the announcement about the hacking incident was posted, Binance’s token (BNB) has dropped more than 10% in price and continues to plunge.

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Interview: Laurent Kratz on Scorechain and blockchain intelligence

During the second day of Paris Blockchain Week Summit 2019, Scorechain chairman and co-founder Laurent Kratz has agreed to do an interview with Crypto Insider and talk about the blockchain intelligence services his company provides. Before the recording started, Mr. Kratz has made a big claim in regards to the scope and scale of Scorechain: it’s the biggest Bitcoin and Ethereum crypto transaction analysis company in Europe, and one with greater scale and efficiency than even Neutrino – which Coinbase acquired earlier this year in spite of shady associations with human rights violations. Throughout the interview, the co-founder would reaffirm the statement with the same direct confidence.

As the conversation progressed, Laurent Kratz has clearly expressed his views on anarchy and compliance: the intelligence firm which he leads is a bridge between blockchain innovation and the rule of law, and therefore acts as an instrument which ensures that actors are honest and proper taxes get paid. To be more specific, the biggest customers of Scorechain are cryptocurrency exchanges which require further information about the origins of the funds, and audit firms interested in the transparency of their clients.

In regards to the early cypherpunk dream which laid at the foundation of ecash, b-money, bit gold, and eventually Bitcoin, Ethereum and Monero, Laurent Kratz is very direct: it’s a romantic ideal, but death and taxes are inescapable.

At the time when the interview was shot, Scorechain had just launched blockchain analysis for Litecoin and was planning to direct some resources towards Bitcoin Cash. Historically speaking, the company has started with Bitcoin, has moved on to Ethereum, and has also extended its field of expertise to cover ERC20 tokens. Basically, businesses and governments looking to do forensics and compliance can contract the services of Scorechain in order to track down certain cryptocurrency transactions and de-anonymize addresses on the public ledger.

Laurent Kratz on currencies, utilities, and Bitcoin

An interesting distinction which Laurent Kratz makes is about the fundamental difference between currencies and utilities. More specifically, he states that the exclusion of VAT (Value Added Tax) turns utilities into properly acknowledged currencies. In this regard, he states that countries like France, Belgium, and Luxembourg have already enacted the corresponding laws to recognize Bitcoin as a form of money.

The chairman and co-founder of Scorechain also made it pretty clear that their job is not to de-anonymize individuals, but to analyze legal entities – in this regard, he presented the example of the Kraken exchange and the methodology employed in order to identify potentially fraudulent transactions.

Last but not least, Mr. Kratz has made an interesting remark about the fungibility of Bitcoin and how the firm that he leads might help increase fungibility: through the analysis of Scorechain, some coins associated with criminal activities (most famously, the Silk Road) can be declared as “clean” thanks to being sold by the FBI or changing hands enough times to stop being suspicious. This helps users make use of their BTC on various exchanges without worrying about potential criminal investigations that might be unfair.

So if some bitcoins become tainted after Scorechain’s analysis, there are others that receive a clean slate for free trading. Nonetheless, this says a lot about the privacy improvements that are required in Bitcoin, and how mixing, Schnorr signatures, and other innovations that may lead to confidential transactions are vital for a truly fungible mean of exchange.

Without further ado, check out the 17-minute interview with Mr. Laurent Kratz, chairman and co-founder of Scorechain.

 

 

Cover image: Alfi European Asset Management Conference 

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Blockchain adoption: Canada, Russia, and Starbucks to use distributed ledger tech

Banking with Blockchain

Canadian banks are taking a big step towards modernization as they deploy a blockchain-based user identification system.

Verified.Me, a digital identity system developed by SecureKey Technologies Inc., is now available through a mobile app to clients of Royal Bank of Canada, Toronto-Dominion Bank, Bank of Nova Scotia, Canadian Imperial Bank of Commerce and Desjardins Group.

The identity verification systems will be also available to customers of Bank of Montreal and National Bank of Canada later this year. Sun Life Financial Inc. has also signed up for the service and will become the first North American insurer on the service.

Greg Wolfond, SecureKey’s CEO, expects a broader adoption of the system by the end of this year.

“Everything from being able to see your health records in a secure way, being able to open a new bank account, being able to get a new phone — all this stuff that’s so time-consuming and painful is going to get easier for consumers. They’re going to be able to share their data in a secure and trusted way, which they never really could before.”

Russia’s E-Vote

The Moscow City Duma, a local parliament of the Russian capital city, is planning to protect the process and results of an electronic voting system using blockchain technology in the university student council elections towards the end of June.

During a meeting at the Moscow Public Chamber, Artem Kostyrko, Deputy Head of the Information Technology Department (DIT) of Moscow, revealed:

“We plan to do a test vote in the summer, at the end of June, until the list of participants is determined. While we had conversations with student associations, there are elections to the main councils that have been held on the blockchain long time ago. Changes will have to be made to the program.”

The technicalities of the program will be sent for approval around May 15 and once the required legislation is passed and approved, the DIT will launch the program in public.

Coffee on the Blockchain

Starbucks has teamed up with Microsoft to use machine learning to gather customers preferences and connect coffee makers to blockchain services for tracing coffee.

Satya Nadella, Microsoft’s CEO, applauded the collaboration between the two firms.

“They are coming together to completely take what is that iconic experience that is Starbucks and incorporating digital throughout.”

Starbucks is extending the app recommendations based on order history to the drive-thru ordering process with digital boards that will make order recommendations.

The company will also connect its devices to the Cloud, hoping that it will make it easier and faster to update its menu. Previously, Starbucks would have to send USB drives to the stores and upload them manually into their computers, but now they can just send out updated recipes through the Cloud.

Ultimately, Microsoft is working to connect coffee consumers with coffee farmers, who will be able to use the Starbucks mobile app to trace the journey of their coffee from the farm where the beans originate, all the way to their cup.

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Pieter Wuille publishes BIPs for Taproot & Schnorr Signatures

On May 6th 2019, prolific Bitcoin Core developer and Blockstream co-founder Pieter Wuille has formalized and sent (via bitcoin-dev mailing list) a series of significant BIPs (Bitcoin Improvement Proposals) that derive from game-changing cryptographic advancements. More precisely, the Belgian engineer has published two distinct yet complementary documents which provide more details on a potential soft fork which integrates Schnorr signatures, Taproot and Tapscript. For the sake of transparency and in order to encourage peer reviewing, all the contents are available on his GitHub repository.

Though these technologies have been discussed by community members for quite some time, this is the first formal public attempt to create a clearer and more comprehensive way of scrutinizing the ideas. Furthermore, the BIP format is excellent at setting goals and boundaries for a specific research: it’s no longer about hypothetical scenarios and envisioned applications, as pragmatic ways to put matters into practice take over the public discourse.

In plain terms, we’re speaking of a research draft for a series of good ideas whose implementation was vague until the moment someone took time to explain everything in written (and properly documented) form. Thanks to this effort, now we know exactly what Schnorr signatures and Taproot can do to Bitcoin, and what the realistic expectations should be (as opposed to the various speculations and rumors which circulated on social media and discussion forums).

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The trademarked soft fork approach of Pieter Wuille

Pieter Wuille wasn’t the first Bitcoin Core developer to step into the scene, but he has been consistent in creating improvements that embellish the protocol via soft forks (without requiring a network split, through the opt-in “UASF” philosophy). Thanks to his contributions, we now have a market for BTC wallet clients outside of Bitcoin Core, we are able to use deterministic wallets that can be changed between clients (BIP 32), and the block size can be effectively increased in times of high network demand via SegWit (BIP141).

None of these upgrades create incompatibility issues with older clients, and the Bitcoin nodes are able to communicate and agree regardless if they chose to implement these benefits. Schnorr signatures, Taproot and Tapscript are set to be deployed on the basis of the same philosophy, so that the network participants can choose to use them or ignore them without schismatic consequences.

 

What are Taproot and Schnorr signatures?

According to the brief summary of Mr. Wuille from the bitcoin-dev e-mail, Taproot makes “all outputs and cooperative spends indistinguishable from each other”, and Schnorr signatures “enable wallet software to use key aggregation/thresholds within one input”. In a nutshell, we are dealing with improvements that are concerned with privacy and efficiency.

Pieter Wuille describes the two protocols in the following words: “Taproot’s advantages become apparent under the assumption that most applications involve outputs that could be spent by all parties agreeing. That’s where Schnorr signatures come in, as they permit key aggregation: a public key can be constructed from multiple participant public keys, and which requires cooperation between all participants to sign for. Such multi-party public keys and signatures are indistinguishable from their single-party equivalents. This means that under this Taproot assumption, the all-parties-agree case can be handled using the key-based spending path, which is both private and efficient using Taproot. This can be generalized to arbitrary M-of-N policies, as Schnorr signatures support threshold signing, at the cost of more complex setup protocols.

The combination of MAST (Merkelized Abstract Syntax Tree), Schnorr signatures, and Taproot can lead to the creation of very efficient and private Bitcoin smart contracts, where the participants only reveal the conditions that finalize the deal. The clauses involved in a deal should not be visible on a public ledger, and good contracts should retain a certain degree of confidentiality with the outside world. This is where Taproot and Schnorr step in and make sure that nobody else can see what the other contractual provisions were.

For instance, if Kate and her son James make a deal and decide that 2 BTC should be awarded to James by the time he turns 18 or when he becomes competent enough to make use of his part of the private key, then the intrusive eyes of blockchain analysts will only see the conditions under which the transaction occurs (but not the other terms which could have made it happen at a different time).

It’s worth mentioning that the word “scalability” is not featured in either of the BIPs, which might be a slight disappointment for those expecting to have more issues fixed via Schnorr. However, as Mr. Wuille himself states, new discoveries are bound to be made along the way.

Privacy is a delicate topic in the case of Bitcoin, as advocates either praise the transparent approach or seek to obtain more confidentiality by joining second layers or by mixing their coins. Nonetheless, it’s unlikely that Taproot and Schnorr will completely replace the need for confidential transactions and creative ways to obliterate the Big Brother approach to the blockchain.

What is evident is that Bitcoin is slowly, conservatively, and steadily growing, and not even the brightest minds in the field can envision all the future applications and the great potential of the technology. Satoshi Nakamoto has designed a framework with a great amount of potential, and the limitations constantly push brilliant engineers like Pieter Wuille to innovate and improvize. After all, the world’s biggest network which supports non-governmental money should never undergo radical changes and is bound to operate on the grounds of voluntaryist philosophy.

Image credit: Everipedia

 

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Ether futures contract coming soon, more Bitfinex drama, PepsiCo tries out blockchain

Ethereum Futures Contract

The US Commodity Futures Trading Commission (CFTC), an independent agency that regulates futures and option markets, may soon approve an Ethereum (ETH) futures contract, according to an anonymous senior official familiar with the matter.

On Dec. 1, 2017, the agency gave the green light to bitcoin futures markets to launch on both the CME Group and the Cboe Global Exchange. Now the CFTC could be willing to oversee a similar product for ether.

The official explained:

“I think we can get comfortable with an ether derivative being under our jurisdiction. We don’t do bold pronouncements, what we do is we look at applications before us. A derivatives exchange comes to us and says ‘we want to launch this particular product.’ … If they came to us with a particular derivative that met our requirements, I think that there’s a good chance that it would be [allowed to be] self-certified by us.”

The only way the regulator would respond positively to a specific application is if it is submitted in a manner that is compliant with the appropriate regulatory guidelines. If proposed and approved, the ETH futures contracts will be accessible to a wide range of institutional investors.

Bitfinex Continues to Lead the News

Reggie Fowler, the former owner of the Minnesota Vikings, was supposedly involved in processing unregulated transactions on behalf of Bitfinex.

A statement put up by the US Department of Justice details that:

“Reginald Fowler and Ravid Yosef allegedly ran a shadow bank that processed hundreds of millions of dollars of unregulated transactions on behalf of numerous cryptocurrency exchanges. Their organization allegedly skirted the anti-money laundering safeguards required of licensed institutions that ensure the U.S. financial system is not used for criminal purposes, and did so through lies and deceit.”

Mr. Fowler has now been charged with bank fraud, as well as operating an unlicensed money transmitting business.

Pepsi on the Blockchain

PepsiCo, an American multinational food, snack, and beverage corporation, has conducted a trial to determine whether blockchain technology could address industry challenges in the automated buying and selling of online advertising space, which brought a 28 percent boost in supply chain efficiency.

PepsiCo’s project partner and media agency Mindshare announced that the trial was performed using Zilliqa’s blockchain platform, which automated various supply chain processes.

According to Mindshare, the results demonstrated a higher efficiency when implementng the process using smart contracts - in terms of costs for viewable impressions against one without.

“These smart contracts reconcile impressions that are delivered from multiple data sources with payments facilitated using an internal Native Alliance Token (NAT) all in near real time, resulting in major efficiency gains and complete transparency for the brand owners.”

Farida Shakhshir, PepsiCo’s director of consumer engagement for the Asia, Middle East and North Africa regions, also emphasized:

“The results are encouraging, and we plan to run a few more campaigns under different conditions to verify more hypotheses and measure overall impact.”

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Fidelity goes all in crypto, Bitfinex to launch an IEO, how to Win 1 BTC

Institutional investors are here

Fidelity Investments, one of the world’s largest financial institutions with over $2.46 trillion under management, will soon buy and sell Bitcoins for its customers.

Last October Tom Jessop revealed Fidelity’s ambitions to launch Fidelity Digital Assets, a new crypto trading and custody business.

“We built a lot of the capabilities underlying this platform months and years ago.”

As a result, the company began offering bitcoin custody services to its clients on Mar. 8, 2019. Now the Boston-based firm is planning to offer over-the-counter trade execution and order routing for Bitcoin. The move came after a recent study which revealed that 47% of institutional investors think digital assets are worth investing in.

Arlene Roberts, Fidelity’s Vice President of External Communications, added in an email:

“We currently have a select set of clients we’re supporting on our platform. We will continue to roll out our services over the coming weeks and months based on our clients’ needs, jurisdictions, and other factors. Currently, our service offering is focused on Bitcoin.”

Bitfinex’s One Billion Dollars Token Sale

Zhao Dong, a Bitfinex shareholder, recently published a tweet revealing the exchange’s plan to offer an initial exchange offering (IEO) aiming to raise up to $1 billion.

The utility token will be called LEO and it will be used to reduce crypto to crypto trading fees on the platform as well as as lending, derivatives, withdrawal, and deposits fees.

LEO will first be offered to private investors and if there is any allocation left it will be opened to the public around May 10. Mr. Dong implied that 60% of the tokens have already been sold by stating that a sum of $600 million has already been raised in private through verbal commitments.

As mentioned in the reports, Zhao had suggested that Bitfinex launch a token offering, in order to help solve its $850 million issue, which was brought up by the New York Attorney General’s Office in a lawsuit.

Bitfinex intends to buy back the tokens on a monthly basis at market price, with 27% profits from the previous month and reserves the right to buy back the tokens within 18 months after its funds are unfrozen.

Around 95% of the unfrozen funds will be used to redeem and burn the LEO in an equivalent amount and even if the seized money cannot be retrieved, the company believes that it will be able to buy back all of the tokens within 4 years.

Free Bitcoin

Tyler Winklevoss, the co-founder and CEO of crypto exchange Gemini, has announced that the company will be giving away 1 Bitcoin to the person with the best picture of the Gemini Crypto Bus.

Anyone who is able to spot the Gemini Crypto Bus in San Francisco, Chicago, or Washington D.C can participate by replying to Tyler’s tweet with the  photo and the hashtag #CryptoBus. Contestants will have until May 11, 2019, at 4:00 ET to participate.

So far 115 people have replied to Tyler’s tweet, but just a few managed to follow the requirements for the contest. The Winklevoss twin has been engaging with the participants, even replying to a tweet:

“That’s a great shot! Love the lighting!.”

It remains to be seen who the winner will be.

The contest appears to be related to a crypto awareness campaign the Winklevoss twins launched in January 2019. The initiative involves developing progressive crypto regulations, in order to adhere to best practices.

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CoinMarketCap says goodbye to Bitfinex’s Bitcoin price

iFinex Inc., the parent company behind Bitfinex and Tether, has been involved in a series of events over the past weeks that appear to have negatively affected it reputation. Recently, CoinMarketCap (CMC) decided to remove Bitfinex’s prices from its market cap estimation.

Bitfinex is out of CoinMarketCap

On May 1st, CMC declared in a blog post the creation of Data Accountability & Transparency Alliance (DATA) in order to provide “greater transparency, accountability, and disclosure from projects in the crypto space.” The move came after a report published by TIE revealed that approximately 60% of the top 100 cryptocurrency exchanges were falsely reporting their volumes.

The crypto market data tracker site gave a 45-days grace period to exchanges so they could provide statistics regarding their live trading and order books data as a requirement to include their price on the site.

After the news broke that the New York Attorney Genereal had obtained a court order against its parent iFinex Inc. for presumably engaging in a cover-up to hide the apparent loss of $850 million, Tether (USDT) holders have been liquidating their tokens for other cryptocurrencies including Ethereum and Bitcoin to be able to move their money out of Bitfinex. This may have resulted in a spike in prices on the platform.

Since then Bitcoin has been trading at a $300 premium on Bitfinex and now CoinMarketCap has decided to exclude it from its market capitalization calculation. At the time of writing, one BTC is worth $5,986 on Bitfinex, while on Coinbase, Bitstamp and  Binance, BTC is trading at around $5,636.

Although CMC has not released an official statement about it, at the beginning of the year, it removed BTC rates quoted by other exchanges including Bithumb, Coinone, and Korbit, due to “the extreme divergence in prices from the rest of the world and limited arbitrage opportunity.”

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The post CoinMarketCap says goodbye to Bitfinex’s Bitcoin price appeared first on Crypto Insider.

Source: cryptoinsider.com

Charles Hoskinson: over 50 full-time engineers working on Cardano

Charles Hoskinson, the founder of Cardano (ADA), an open-source, public blockchain network for creating decentralized applications (dApps), has clarified that his team of developers are “building a product that is based upon new science and new ideas.”

Hoskinson, the CEO at Input Output Hong Kong (IOHK), a research and development (R&D) firm focused on cryptography and distributed systems, confirmed that his colleagues remain committed to developing the Cardano protocol in an “open and transparent” manner.

Cardano Project Involves Time-Consuming Research And Development

Responding to the recent criticism regarding the delay in the launch of Shelley, a major upcoming Cardano network upgrade that intends to bring “full decentralization” to the proof-of-stake (PoS)-based platform, Hoskinson remarked:

“Generally speaking, when this happens in industry, what happens is that the R&D phase concludes before it’s consumerized or productized … So you guys see the end result of projects [that get turned into working products.]”

Going on to mention that consumers only see the end results of “years of effort” that go into developing hi-tech products like the the face scanner for the iPhone, Hoskinson pointed out that had users seen the “early iterations, then [it would seem as if] there’s nothing but delays and missed schedules, and [missed] deadlines.”

According to Hoskinson, this happens because “that’s the nature of building things based upon research.” He added that it’s the researcher’s job to put in their “best effort” but it’s not always guaranteed, or realistic, to aim for always hitting that initial deadline.

Missed Deadlines Doesn’t Mean People Are Incompetent

There will be times, Hoskison explained, that people will miss deadlines, however it doesn’t mean they’re incompetent or that they “don’t know what they’re doing.” It’s because “these are new things that have never been done before.” For example:

“There are many buildings in London…when people decided to build a skyscraper somewhere…when they started digging, they discovered corpses [among other things.]”

He continued:

“They had to bring in people to study them and [assess] how old the [fossils and other buried items] were, where they’re from, what museum do we take them, etc.” Because this can be a time-consuming process, it can cause unexpected delays, Hoskinson said.

Hoskinson further noted:

“When you’re doing new things, when you’re pioneering, occasionally, every now and then, you have a delay. Again, these delays aren’t because [people are not qualified to handle the tasks. It’s also not because of] lack of resources or lack of knowledge. It’s because of the newness behind the protocols or because you discover things that make you change things along the way.”

The Analytics Number Theory dropout from the University of Colorado, Boulder, stated that his team of researchers released Shelley’s formal specifications sometime back. At that point, Hoskinson claimed:

“[The protocol was] pretty solid and we were really not [planning on] making many changes. [The specifications were the result of researchers] spending many months studying these things, building prototypes for these things, and [designing] proofs of concepts for these things.”

Cardano Project Has “More Than Fifty Full-Time Engineers”

Hoskinson again emphasized that the Cardano project developers have always been very transparent about how they’ve been conducting their research and how they’re approaching the ongoing development of the smart contract platform. He remarked:

“If you go to [Cardano project’s] Github repositories, as many of you have done, you can see the code being committed on a daily basis. As for the question of how large is the engineering team, more than fifty full-time engineers. This can be verified from the Github repositories.”

Moreover, Hoskinson pointed out that the Cardano project was ranked first for the number of Github commits sometime back. He also clarified that “Atala” is an enterprise-grade blockchain framework written in Scala and the Cardano protocol has been written in Rust and the Haskell programming language.

“There Are No Cardano Developers Working On Atala”

Hoskinson further mentioned that there “are no Cardano developers currently working on Atala.” He explained that Atala and Cardano are “completely separate” projects “in terms of their codebase and engineering acumen.” Interestingly, Hoskinson revealed that his colleagues have been “moving people from Atala to the Cardano project.”

Per the Ethereum co-founder, “the flow of people is moving not in the Cardano to Atala direction, it’s actually the Atala to Cardano direction.” He also noted that his team of developers has been working on Atala for “over two years” and that “it’s a parallel project.” The reason for writing Atala in Scala, Hoskinson said, was to ensure that the resources for the Cardano project weren’t used to develop Atala.

Helping People “Solve A Problem They Have” Will Increase Crypto Adoption

One of the main goals of these projects, Hoskinson stressed, is to encourage people who don’t use cryptocurrencies to begin using them in their everyday lives. In order to effectively spread awareness about blockchain-based digital currencies, Hoskinson cautioned against trying to sell people a token. Instead, he recommended actually helping people by introducing them to cryptocurrency projects that help “solve a problem they have.”

Hoskinson also criticized the approach of misusing technology in order to sell products and make quick profits. For instance, he cautioned against using public networks in cases where you have internet of things (IoT)-powered devices which have “millions of readings”

These readings, Hoskinson noted, are captured on a daily basis from numerous sensors. To put all these processes and their associated data on a blockchain while also trying to store terabytes of data would not be the appropriate application of distributed ledger technology (DLT).

Real-World Use Cases: Remittances, Insurance, Microfinance

“[Blockchains] were never meant to be used this way,” Hoskinson argued. He added:

“It makes a hell of a lot of sense to have a private strategy that works in tandem with an open system and you put these two things together. One brings users into the other system. Users who’ve never been in the cryptocurrency space. Users who have no preferences. And, users who are there because you solved a problem for them. And, now are using that system to solve other problems such as [fulfilling the need for services including] remittances, insurance, and microfinance.”

Hoskinson also addressed recent accusations against the Cardano project developers, which claim that the Atala project has been launched in order to serve as a “distraction.” According to Hoskinson, critics argue that Cardano’s development team is trying to confuse people, or use a “bait and switch” tactic by moving over to a permissioned ledger system.

He continued:

“Our two options were to build something in-house that’s guaranteed to be interoperable with Cardano or use [Hyperledger] Fabric or some other framework like that.”

Hoskinson added:

“It’s amazing that the same people that criticized us for Atala were people who were praising Ethereum for ‘Enterprise Ethereum.’ Enterprise Ethereum doesn’t use Ether, Enterprise Ethereum is a completely different codebase and technology stack than Ethereum itself. So tell me, were the synergies there?”

The Cardano founder questioned:

“How can you praise Microsoft and all these other people for joining the Ethereum Enterprise Alliance (EEA) and [going with the narrative that] this is going to be the dawn of Ethereum? But somehow Atala won’t add equivalent value to Cardano. It’s idiocy and stupidity…and these questions are just extraordinary to me.”

Hoskinson also mentioned:

“A lot of progress has been made. There are multiple clients now, light clients, full clients, there are paper wallet generators on our side and on Merco’s side. [We also] have a new blockchain explorer coming out, multiple codebases. And, these things are evolving rapidly and they have great release schedules. We’re starting to modularize the software. We’re starting to harden the software. We’re starting to make the software more enterprise-grade.”

Hoskinson further noted:

“We’re not slowing down, we’re speeding up. I’m in Mongolia, not for vacation, we’re meeting with ministers and we’ll probably have a meeting with the President [of the country.] … We’re going to talk about problems like 18% of the medicine [in Mongolia] is counterfeited or adulterated and 40% in the rural areas is counterfeited or adulterated. So how do you put a traceability program like what pharma trust has done. We’re talking about the fact that 93% of the people here have some access to mobile banking and 30% receive government disbursements, [but at] enormous costs.”

It’s About “Bringing New Users To The Crypto Space”

The IOHK CEO revealed:

“We’re talking about the fact that the Asian Development Bank has put hundreds of millions of dollars for various projects and the audit trail is not so good here (in Mongolia). These are real, complicated situations and blockchain comes in as part of that solution. Should we get just one solution in, we can bring hundreds of thousands of [new] users into the cryptocurrency ecosystem. And now they’re your customers just as much as they’re mine because you can now build dApps to service them for things they’d like to do. That’s what I do. That’s my job. I don’t write code. I have 50+ engineers just on the Cardano side who write code for that.”

Hoskinson concluded:

“If you have concerns about the roadmap or the testnet, just be patient. These things come and when they come, they’re going to be great. And, we’ll work our way through parts that aren’t so great. But this has always been a long-term project. It’s always been a methodical project. It’s always been a project based upon evidence. And, the evidence is clear, the Githubs are open, the science papers we’ve written are all on the web, 40+ of them. We continue to get accepted at EuroCrypt and CCS and all conferences. We continue to write papers. We continue to write code. And our ecosystem continues to grow.”

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Source: cryptoinsider.com