Rubber Bands and Private Keys, a critique of two articles on Bitcoin

Rubber Bands and Private Keys
by Thomas J Connolly
November 30, 2018

I love imagination. Since I was a little boy I think my most precious moments have been when I let my mind wander, to imagine a world that is similar to today, but somehow different. A world that is better. It makes me happy inside to take that type of walk in a world that represents the future.

For a moment I want you to join me and pause, to remember. You are between the ages of 18 and 25. Last night you were out with your mates, in a bar listening to music. You were drinking and putting money on the bar. You can still feel the beer-soaked paper money crumpled in your pocket that spent an evening on the wet wooden bar that was the platform of beers and shots, money that you sort the next morning back into smoothed out bills.

Now think of a round of golf in Arizona. We are comparing cards and settling bets. Money is exchanged across the table, who has a fiver or a ten? Richard asks, “Did you give me the $400”.

Now think of our children. Do you see them doing the same thing? In a world of Venmo?

Karen and I ask Justin and Sydney when they are home and are heading out for a night with friends, “Do you have enough money with you”? They look at us quizzically, laugh, and say they do not need money. Everything for them is digital.

What about your children? More importantly, what about you? We are used to Gary’s security of a Rubber Band, but in truth how often do each of us reach into our pocket and pay for things with paper notes or coins? Has our world become different than what it was when we were at that bar so many years ago? I think the answer is yes, and in that difference are the seeds of a world that is coming, a world that is borderless in terms of “money” flow, one that does not have exchange fees or movement that has the friction of delay. It is inevitable, and we will not need rubber bands (but you and I will still use them to our children’s delight and mockery because they reflect our time when we were young) but we will need Private Keys.

Now that I have your mind in the right place, let’s look at the articles that John shared with us. The prestigious Washington Post and the LA Times. The key points I discern from the writers’ crafted words are these:

• There was a frenzy of buying that included “Grandma’s and Grandpa’s cashing in on the action”

• It is pitched by its promoters as an alternative to “Fiat” currencies

• “To put it another way, the money in your bank account, wallet or mattress shouldn’t fluctuate widely or unpredictably”

• “Bitcoin trading systems couldn’t enforce their ostensible safeguards against counterfeiting.”

• Bitcoin possess value only as long as the expectation exists “that they will continue to be accepted by others”

• Bitcoin trading is cumbersome and would require super computers to scale like VISA and Mastercard.

• As an investment asset, Bitcoins price has come down by roughly 80% from its peak in just under a year. The Bitcoin crash should all but exterminate the currency.

• “Bitcoin has been around for ten years, but we still haven’t found one use for it.”

• Bitcoin Miners are middlemen that take a fee just like a bank

• The rise in the price of Bitcoin creates hoarding behavior and that price rise means it will only be adopted by the most fervent believers

• Since the end of last year the Euro and the Turkish Lira have outperformed Bitcoin, while Bitcoin has only modestly outperformed the Venezuela Bolivar. “So maybe some sort of congratulations are in order: Bitcoin is a better store of value than the worst store of value there is.”

I think the above about covers the two writers’ main points for concluding why Bitcoin is and will be a failure. Let me do what they did not, which is to go deep vs shallow. On a point by point response, let’s see where they may be correct and where they may be a bit off the mark. Ready? Here we go………

• There was a frenzy of buying that included “Grandma’s and Grandpa’s cashing in on the action”

The point the author seems to be making here is that there was a buying frenzy that included a mass entry into buying Bitcoin by people with little understanding of what they were doing, even by the least likely people, Grandma and Grandpa. How true is that statement?

Well a report released in July 2018 reveals the following:

22 Million Bitcoin Wallets

Currently, there are almost 22 million bitcoin wallets according to data compiled by Bitinfocharts.com. However, most bitcoin users have several bitcoin wallets and use multiple wallet addresses to increase their financial privacy when transacting in bitcoin. Hence, the number of bitcoin users is likely less than 22 million.

2.9 to 5.8 Million Active Users

A 2017 study by the Cambridge Centre for Alternative Finance suggests that “current number of unique active users of cryptocurrency wallets is estimated to be between 2.9 and 5.8 million.” It is important to note that this study focuses on active users as opposed to bitcoin “hodlers”. This gives us insight into how many individuals are actual users as opposed to only buy-and-hold investors.

The Cambridge University study collected data from over 100 cryptocurrency companies in 38 countries, which is estimated to encapsulate 75 percent of the blockchain industry. Hence, we can expect the number of active users to be on the higher end of the study’s estimate or perhaps even higher.

Those are relatively small numbers in a global population of over 7 billion people. While many people became aware of Bitcoin as the media focused on it in late 2017 and into 2018, the actual number who spent the time to figure out how to buy it and to commit money to it was very small. Think of us as a group, we likely have only 1% to 3% of us that own BTC. Fairly representative of the overall population in the current market of BTC (22/7,000 or 3%) and the estimated 5% of the US population that own BTC. Compare the US BTC holders to the percentage of the US population that own stocks (52%), and you can see the author’s stated frenzy for BTC has actually been very narrow. I think the author here was trying to bring emotion to drive a point home, but his point is less than factual.

• It is pitched by its promoters as an alternative to “Fiat” currencies

The original paper by Satoshi Nakamoto that introduced Bitcoin is nine pages long (if you would like me to send you a copy, just ask). I have read it. It does speak of developing a network to enable payments, but it does not suggest that Bitcoin will or should replace Fiat currencies. The introduction of the paper reads as follows:

“1. Introduction
Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments. While the system works well enough for most transactions, it still suffers from the inherent weaknesses of the trust based model. Completely non-reversible transactions are not really possible, since financial institutions cannot avoid mediating disputes. The cost of mediation increases transaction costs, limiting the minimum practical transaction size and cutting off the possibility for small casual transactions, and there is a broader cost in the loss of ability to make non-reversible payments for nonreversible services. With the possibility of reversal, the need for trust spreads. Merchants must be wary of their customers, hassling them for more information than they would otherwise need. A certain percentage of fraud is accepted as unavoidable. These costs and payment uncertainties can be avoided in person by using physical currency, but no mechanism exists to make payments over a communications channel without a trusted party.

What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party. Transactions that are computationally impractical to reverse would protect sellers from fraud, and routine escrow mechanisms could easily be implemented to protect buyers. In this paper, we propose a solution to the double-spending problem using a peer-to-peer distributed timestamp server to generate computational proof of the chronological order of transactions. The system is secure as long as honest nodes collectively control more CPU power than any cooperating group of attacker nodes.”

While there are those that get headlines by proposing that BTC will replace Fiat currencies, the truth of the matter is that this view is a minority view and not connected to the concept of BTC or the actual existence of BTC. The author has once again chosen to make an inflammatory comment that is shallow and without real substance.

• “To put it another way, the money in your bank account, wallet or mattress shouldn’t fluctuate widely or unpredictably”

We would all like this to be true. However, as we know from simply watching the movement of the British pound during George Soros billion dollar move against the UK Pound or the impact of Brexit, that volatility in Fiat currencies is present. What about the EURO vs the USD? How do 50% point moves sound? In August of 2002 the EURO made its debut. It was valued at less than 1 USD. Between then and now, the EURO has soared in value to 1.58 USD and has fallen from that level to 1.05 USD. Volatility is a natural occurring event when normal supply and demand factors exist for all assets. BTC is no different. To highlight the volatility is factually accurate, but it is not a reason to demean any asset that moves based on market dynamics (think of the price of oil). Once again the author seeks to win an argument based on emotion, not facts.

• “Bitcoin trading systems couldn’t enforce their ostensible safeguards against counterfeiting.”

This comment made me laugh. I know of not one case where BTC has been counterfeited. In fact, it is impossible simply based on the structure of the Blockchain network on which it resides. This is the most foolish statement of all.

• Bitcoin possess value only as long as the expectation exists “that they will continue to be accepted by others”

I believe this is true. Just like any asset, its value is predicated on demand. I think this is an obvious fact of all assets and wonder why the author positioned it as unique to BTC? I guess he needed to meet a word count requirement to fit the paper’s column structure.

• Bitcoin trading is cumbersome and would require super computers to scale like VISA and Mastercard.

This statement is both somewhat accurate and wildly wrong. Trading in BTC is fast, almost instantaneous. Try it on Coinbase. I think the author was trying to make the point that as a means of payment it has a low transaction per second metric due to the network requirements for validating the blocks that make up the BTC Blockchain. That is true. It is a young technology that continues to advance, seeking to solve the inefficiencies that it was conceived with. For example there is the Lightning Network that has been developed which is designed to sit on top of the BTC Network. It is currently in testing at 60,000 transactions per second, with the expectation that it will scale to millions of transactions per second. Even the internet use by normal everyday people went through this phase. Can you not remember the modem hooked to your computer and connected to your phone line with all the screeching and noise as it connected to the internet at incredibly slow speeds? Everything does evolve does it not? I wonder why the author would not speak to the way technology is evolving, versus concluding it is a failure when compared to VISA or Mastercard? Shallow reporting if you ask me. Oh, by the way, there is no need for a supercomputer, as the network runs on normal computers in a shared peer to peer network. Talk about sensationalism.

• As an investment asset, Bitcoins price has come down by roughly 80% from its peak in just under a year. The Bitcoin crash should all but exterminate the currency.

So which is it? Is it an asset or a currency? Seems the author lost his way for a second.

If an 80% price drop was enough to conclude that an asset should be exterminated, then the world would look a bit different today as Amazon would be gone for it fell by 98.7% between the year 2000 and 2001/02 (high split adjusted share price of $75.25 and a low of $5.51. Bet you wish you bought AMZN at $5.51). What about Cisco systems? Fell by 86.5%. Corning Glass works by 99%; Priceline by 99.4%; Yahoo by 96.4%, etc. You get the picture.

• “Bitcoin has been around for ten years, but we still haven’t found one use for it.”

Really? I think one of the most significant things you would highlight is that BTC can be used to pay taxes:

US State of Ohio Accepts Bitcoin for 23 Types of Taxes

The U.S. state of Ohio has set up a cryptocurrency payment portal and reportedly starts accepting payments in bitcoin for 23 types of taxes this week. “Ohio has become the first state in the United States, and one of the first governments in the world, to accept cryptocurrency,” the Treasurer’s Office wrote.

How can an author/writer for these prestigious news organizations be allowed to print for mass consumption false statements? Dare I say it, “Fake News”………

• Bitcoin Miners are middlemen that take a fee just like a bank

A bank charges us for maintaining deposits with them of our own money, paying us less than 1% interest while using our money to loan to credit card users charging them 19% interest, charges us for international transfers, and delays for days sizeable deposits that are mere transfers between financial institutions. As to BTC miners, they are compensated for mining BTC which is adding new blocks to the Blockchain. They are not paid by you or me. The BTC they receive is new BTC, that is why they call it mining.

There is a fee for transactions, but it is nominal and significantly less than our current banking system. For example, earlier this week, Binance, the world’s largest cryptocurrency exchange, sent $600 million with a $7 fee. To send a $1 million through a bank in an international wire transfer, it could cost institutions nearly $10,000 in fees.

Taking a fee just like a bank is a partially true statement by the author, but it is misleading in substance and for me amounts to no more than a big lie buried in a small truth.

• The rise in the price of Bitcoin creates hoarding behavior and that price rise means it will only be adopted by the most fervent believers

Which is it? Earlier the first author posited that the price rise brought Grandma and Grandpa into the BTC market as buyers of the asset. Now writer number two says that only the possessed few will come into the market. Who is right? Are not these statements foolish?

Simple fact of life, new technologies are embraced early on by the “believers”. It is not until later that the masses come on board once the technology has proven its value. I imagine you have heard of the S curve in the adoption of new technologies? We are today at the beginning of the curve. BTC has not proven its value yet in a way that would lead to mass adoption, but that in no way means it won’t. The fact of the matter is that the Blockchain is expanding rapidly into every business, and the most comprehensive and developed Blockchain at this point is the BTC Blockchain. The ease with which it enables the transference of capital from one geography to another in a seamless and timely manner indicates to me that the day is coming when mass adoption will happen, and not as a replacement of the USD, the Pound, the EURO or the YUAN, but as a compliment to them that changes the financial industry in a dramatic and significant way.

• Since the end of last year the Euro and the Turkish Lira have outperformed Bitcoin, while Bitcoin has only modestly outperformed the Venezuela Bolivar. “So maybe some sort of congratulations are in order: Bitcoin is a better store of value than the worst store of value there is.”

What is it they say about statistics?

Mark Twain (among others), who attributed it to the British prime minister Benjamin Disraeli: “There are three kinds of lies: lies, damned lies, and statistics.”

Choosing to make a statement comparing the price of BTC to the named currencies is so misleading that I shake my head in sadness that journalism has fallen to such lows. The writer is accurate in their statement for they searched for the period in time where the statistics aligned with their theory. What if they compared the values between 2010 and now? BTC was valued at $.08 in 2010. What might the increase in value be to now at $4,000 per BTC? Lies, Damned lies, and Statistics, is what I say. Shame on these writers and the editors that allowed such biased and misleading journalism to flourish on their pages.

Well I guess I am done for now. I hope in the future a better more balanced presentation of the Crypto-Asset world emerges. I imagine it will be written only after the horse has left the barn. But remember, I began this discussion speaking about imagination. I think John Lennon got it right and was prescient in imagining a world without borders as being attainable one day. Maybe we are moving there ever so slowly. I do hope so……

Ohio Accepts Bitcoin for Tax Payments

Ohio Accepts Bitcoin for Tax Payments

The U.S. state of Ohio has set up a cryptocurrency payment portal and reportedly starts accepting payments in bitcoin for 23 types of taxes this week. “Ohio has become the first state in the United States, and one of the first governments in the world, to accept cryptocurrency,” the Treasurer’s Office wrote.

The office of Ohio Treasurer Josh Mandel has set up a cryptocurrency tax payment portal at Ohiocrypto.com. The website explains that businesses do not have to be Ohio-headquartered to pay their taxes in cryptocurrency, adding:

Under the leadership of Ohio Treasurer Josh Mandel, taxpayers are able to pay their state business taxes with cryptocurrency for the first time anywhere in America. Ohio has become the first state in the United States, and one of the first governments in the world, to accept cryptocurrency.

“Beginning this week, Ohio businesses will be able to go to the website Ohiocrypto.com and register to pay everything from cigarette sales taxes to employee withholding taxes with bitcoin.” the Wall Street Journal reported on Sunday. “Eventually, the initiative will expand to individual filers.”

23 Eligible Types of Taxes

According to the Ohiocrypto website, cryptocurrency can be used to pay for 23 types of taxes.

Eligible taxes are 911 wireless, cigarette / other tobacco products, commercial activity, consumer’s use, direct pay permit, financial institution, interest on lawyers trust accounts, international fuel tax agreement, kilowatt hour, motor vehicle fuel, municipal net profits, municipal tax electric light & telephone, natural gas distribution, non-resident motor vehicle sales tax, pass-thru entity tax, petroleum activity, premium insurance tax, public utilities tax, sales tax, seller’s use tax, severance tax, streamlined sales tax, and withholding tax.

The Ohiocrypto website also outlines the benefits of paying with cryptocurrency. Firstly, it is “quick and easy” for taxpayers, the website claims. There are three steps to follow: registering on the website, entering tax payment amounts and tax period dates, and then using “your compatible cryptocurrency wallet to pay the invoice with bitcoin.”
Secondly, payments are tracked in “real-time on the blockchain.” Thirdly, they are secured as “Cryptocurrencies cannot be transferred to third parties without user initiation,” the site notes, adding that transparency is another benefit since “anyone can view all transactions on the blockchain.” Furthermore, there are mobile options allowing taxpayers to make payments on their phones or tablets. The website also notes that “A minimal fee is charged to confirm transactions on the blockchain network.”

Regarding which cryptocurrencies are accepted, the Ohiocrypto website clarifies, “Taxpayers can currently pay their taxes with Ohiocrypto.com in bitcoin,” adding “the Treasurer’s office looks forward to adding more cryptocurrencies in the future.” The state will not be keeping any bitcoins, however. The Treasury’s Office emphasizes:

At no point will the Treasurer’s office hold cryptocurrency. Payments made on Ohiocrypto.com, through our third party cryptocurrency payment processor partner Bitpay, are immediately converted to USD before being deposited into a state account.

Bitpay usually processes both BTC and BCH payments. However, BCH payment processing is unavailable at this time due to the Nov. 15 hard fork of the BCH network. “Bitpay has temporarily paused bitcoin cash payment processing until we determine that customers can pay safely,” the company wrote.

In general, to pay taxes using either BTC or BCH, taxpayers need to use compatible wallets which both the Ohiocrypto website and Bitpay have listed. Compatible wallets include Bitpay’s own wallet, Copay wallet, Btc.com wallet, Mycelium wallet, Edge wallet (formerly Airbitz), Electrum wallet, Bitcoin Core wallet, Bitcoin.com wallet, BRD wallet (breadwallet), and Electron Cash Wallet.

“First, select the cryptocurrency you’d like to pay in from the drop-down and select either bitcoin or bitcoin cash (currently unavailable at this time),” the payment instruction on the Ohiocrypto website reads. The website further describes:

Our third-party cryptocurrency payment processor locks an exchange rate (USD to BTC or BCH) for 15 minutes. If you do not submit your payment within 15 minutes, then you must restart your transaction – which will include an updated exchange rate.

Story by:
Kevin Helms
A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.

EY and Microsoft launch blockchain solution for content rights and royalties management

EY and Microsoft launch blockchain solution for content rights and royalties management for media and entertainment industry
Related topicsBlockchainMedia and entertainment

• Rights and royalties management solution can be applied to any industry where intellectual property or assets are licensed, with initial focus on gaming

• Blockchain solution expected to deliver reduced processing time and faster tracking of royalties

EY and Microsoft today launched a blockchain solution for content rights and royalties management. Aiming to streamline the costly and time-consuming processes in entertainment rights and royalties, the solution is first being deployed within gaming with Microsoft and its game publisher partners.

EY and Microsoft designed the solution to serve any industry where intellectual property or assets are licensed to other parties and where the creators are paid royalties based on royalty agreements. Within this value chain – which can include authors, song writers, production houses, developers and more — the intellectual property generates millions of transactions aggregating to billions of dollars per month in royalties to be paid. The royalty calculations along the value chain are currently mostly manual and generally managed via offline data sources.

The new rights and royalties management solution is designed to enable increased trust and transparency between industry players, significantly reduce operational inefficiencies in the rights and royalties management process, and eliminate the need for costly manual reconciliation and partner reviews.

In addition, the solution aims to provide near real-time visibility of sales transactions to the participants in the blockchain network and to help the participants to react to market needs faster and more effectively because they will get timely, improved insights into the content that is being purchased.

The embedded smart contract architecture is designed to enable accurate and real-time calculation of each participant’s royalty position, providing enhanced visibility for recording and reconciling of royalty transactions.

The underlying network is built using the Quorum blockchain protocol and Microsoft’s Azure cloud infrastructure and blockchain technologies, and implements confidentiality of agreements across entities.

Microsoft’s gaming partners participating on the network will get improved visibility to the transactions versus the legacy process, which could take up to 45 days or more. The participating partners will be able to generate accounting accruals on a daily basis and use the timely data to improve their forecasting.

Ubisoft, one of the world’s leading game publishers and a Microsoft gaming partner, is testing the solution.

Loic Amans, Senior Vice President, Finance & Strategic Planning at Ubisoft says:
“We are always looking at how to leverage emerging technologies in all facets of our business. The opportunity to collaborate with EY and Microsoft on blockchain use cases in the domain of digital contracts and royalties is truly exciting.”

Microsoft intends to deploy the rights and royalties blockchain network with interested gaming partners in a phased manner. When fully operational, this blockchain network is expected to encompass thousands of Microsoft royalty partners and process millions of transactions per day, making it one of the world’s largest enterprise blockchain ecosystems.

Paul Brody, EY Global Innovation Leader, Blockchain, says:
“The scale, complexity and volume of digital rights and royalties transactions makes this a perfect application for blockchains. A blockchain can handle the unique nature of each contract between digital rights owners and licensors can be handled in a scalable, efficient manner with an audit trail for the participants. By deploying this on Microsoft Azure, we believe this will be highly scalable across thousands of royalties and content partners.”

Grace Lao, General Manager of Finance Operations, Microsoft, says:
“Deploying this blockchain solution will allow us to efficiently manage high volumes and automate processes, while at the same time improve partner satisfaction and enhance compliance. Smart contract technology is far more flexible and scalable than any prior solution for managing business agreements. We look forward to deploying this solution across our gaming ecosystem and exploring additional blockchain applications for other finance processes at Microsoft.”

Brad Wright, Partner, Software Engineering Manager, Microsoft, says:
“Powered by Microsoft Azure and blockchain technology, this solution helps demonstrate our ability to enhance trust with our gaming partners, and strengthen security, transparency and payment accuracy through the power of blockchain. We’re thrilled to work with EY and our gaming partners to streamline this business.”

Deep Ghumman, EY Global and EY Americas Blockchain Finance Lead, Advisory Services, says:
“Enterprises are looking to use blockchain technology to solve their business challenges. They are especially looking for scalable blockchain products that can easily plug into their existing processes and systems. The rights and royalties blockchain solution on Microsoft Azure is a great example of how blockchain will transform the way we do business and how EY and Microsoft are collaborating to empower digital transformation with blockchain.”

EY and Microsoft are currently deploying the solution with Microsoft’s key business partners and will explore opening the solution to other partner organizations as a general exchange infrastructure for royalties-related transactions on everything from software to digital media.

This development builds on other blockchain initiatives from the EY organization including blockchain for automotive services; the world’s first marine insurance blockchain platform; and a suite of blockchain audit technologies that enhances the ability to perform an in-depth review of cryptocurrency business transactions.

This news release has been issued by EYGM Limited, a member of the global EY organization that also does not provide any services to clients.

Contact
Advisory
Barbara Burgess, EY Media Relations and Social Media Associate Director – Advisory

+1 212 773 1652

Aparna Sankaran, EY Media Relations and Social Media Supervising Associate – Advisory

+44 20 7951 6713

Major Swiss Stock Exchange SIX Lists World’s First Multi-Crypto ETP

Major Swiss Stock Exchange SIX Lists World’s First Multi-Crypto ETP Amidst Market Collapse
By Helen Partz
COINTELEGRAPH

Switzerland’s principal stock exchange SIX Swiss Exchange will list the world’s first multi-crypto-based exchange-traded product (ETP) next week, the Financial Times (FT) reported Saturday, Nov. 16.

Backed by the Swiss startup Amun AG, the first global multi-crypto ETP will be listed under index HODL, and will track five major cryptocurrencies: Bitcoin (BTC), Ripple (XRP), Ethereum (ETH), Bitcoin Cash (BCH), and Litecoin (LTC).

According to the article, each cryptocurrency will acquire a certain market share within the upcoming ETP, with Bitcoin accounting for around half of the ETP’s assets. The rest are set to be divided in fractions, with 25.4 percent in now-second cryptocurrency XRP, and 16.7 percent in Ethereum, while Bitcoin Cash and Litecoin will acquire 5.2 and 3 percent of the market, respectively.

Amun’s co-founder and chief executive Hany Rashwan commented that the upcoming ETF is organized in a way to comply with the same strict policies that are required by traditional ETPs. According to Rashwan, this will provide a well-regulated tool for trading cryptocurrencies for both institutional and retail investors that are limited in the field by crypto-unfriendly environments.
The Amun ETP index will be managed by the German index unit of investment management firm Van Eck, according to major Swiss news agency Finews.com. While Amun AG is based in the Swiss “crypto valley” town of Zug, it is reportedly a branch of Amun Technologies, a U.K.-based fintechcompany. The firm first announced their plans to introduce a crypto ETP in late September this year, according to Bloomberg.

According to Amun’s official website, SIX Swiss Exchange is the fourth largest stock exchange in Europe with a market capitalization of $1.6 trillion. On Wednesday, Nov. 14, head of securities and exchanges at SIX Thomas Zeeb claimed that blockchain-based digital exchanges will entirely replace conventional ones in “about ten years,” citing a large interest in cost advantages of the technology by brokers, banks, and insurance firms.

ETPs represent a type of security that is priced derivatively and trades intraday on a national securities exchange, based on investment tools such as commodity, a currency, a share price, or an interest rate, according to New York City-based investing and finance website Investopedia. ETPs can reportedly be actively managed funds, including exchange-traded funds (ETFs), and others.
Some experts have predicted that adoption of Bitcoin ETFs will be a “way bigger deal” than a cash settlement Bitcoin futures contract, and hence will be a bigger basis for the growth of crypto markets.

In Sweden, XBT Providers already have a Bitcoin ETP called Coinshares, which has attracted around $1 billion since 2015 when it was listed on major Swedish exchange Nasdaq Stockholm.

Recently, the U.S. Securities and Exchange Commission (SEC) stopped accepting public feedback on their Bitcoin ETFs policy review, following the previous denial of nine applications to list and trade various BTC ETFs from three companies, including ProShares, Direxion, and GraniteShares

KuCoin Raises Series A Round of Funding

KuCoin Raises Series A Round of Funding
PUBLISHED 2018-11-14
This post is also available in: 简体中文 (Chinese (Simplified))

Dear KuCoin Users

At KuCoin, we have always believed that one day everything will function with blockchain technology, and we are continuing to strive for this realization.

Today, we are thrilled to announce that we have closed our Series A Round of Funding, raising $20 million (USD) from IDG Capital, Matrix Partners and Neo Global Capital to bring cryptocurrency to the masses.

We will use this financing to:
• Bring KuCoin Platform 2.0 to life
• Increase customer support staff to offer concierge-level service to all traders
• Expand globally by concentrating on targeted markets
• Accelerate research to find the best of the best in blockchain projects
• Educate and train blockchain talents

We would like to thank our new partners as well as our users who have helped us grow. We will continue to spare no effort in exploring the best hidden gems in the crypto world while growing exponentially on a global scale and, more importantly, solidifying our position as “The People’s Exchange”.

For additional information, please visit: https://news.kucoin.com/en/idg-capital-matrix-partners-and-neo-global-capital-invest-20-million-usd-into-kucoin-to-bring-cryptocurrency-to-the-masses/

The KuCoin Team

Microsoft Azure Blockchain Development Kit Launches

Microsoft Azure Blockchain Development Kit Launches to Improve Workbench Capabilities
By
Bitcoin Exchange Guide News Team

November 16, 2018

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Microsoft is renowned the world over for enabling the PC revolution. They have, arguably, changed the landscape of business and daily lives by bringing computers to an affordability level that they are now ubiquitous. The company has for decades been working towards lowering barriers to development with tools and integrated offerings. They have now released a serverless blockchain-powered development kit, as announced yesterday on the 15th of November.

This initial release of the Azure Blockchain Development Kit looks to extend the capabilities of the blockchain developer templates and Azure Blockchain Workbench. The end goal, being able to afford a reference architecture that can be deployed to quickly build blockchain-based applications while incorporating off-chain identity and data, monitoring, and messaging APIs.
What Is The Main Focus

The announcement details the core focus on 3 primary aspects, these are: connecting interfaces, integrating data and systems, and deploying smart contracts and blockchain networks. Mike Ward, the Head of Product Management said,
“We are committed to ensuring developers can deploy CorDapps quickly, securely and easily. The Azure Blockchain Development Kit will give our enterprise customers tools to integrate with the applications, software, and devices that people use every day like Outlook, Alexa, SMS, and web UX. The blockchain is moving out of the labs and into everyday business applications.”
Connecting Interfaces

Only a solution that enables differing user interfaces to integrate with the blockchain can be a viable end to end blockchain solution. To this end, multiple factors come into play. Therefore different use cases for a vast variety of solutions have been factored in. For examples, SMS and voice interfaces, Mobile client devices, Bots and assistants and Web clients. These can be utilized in conjunction with each other, seamlessly. With these interfaces, individuals and organisations will be able to connect to a blockchain.

Integrating Data And Systems

To enable a suitable end to end blockchain solution, smart contracts are needed in order to facilitate multi-party processes. These require integration with data, software, and media that live “off chain”. Microsoft has identified a few areas for integration. Documents and Media don’t usually belong in any chain but are often involved in business processes. Logic Apps will be used to enable the hashing of files and file related metadata, while also including smart contracts for files and a file registry to store those hashes on a chain.
Further, the importance of smart contract interactions is elevated by the fact that enterprise integration is messy. Thus there are hundreds of connectors available in Logic Apps and Flow. Microsoft’s new kit includes workbench integration cases for Legacy applications and protocols, data, Software as a Service (SaaS), registries and Logic App Connectors for Blockchain
Deploying Smart Contracts And Blockchain Networks

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As more people become aware of the blockchain technology and its possibilities, businesses have been looking to get more information about smart contracts and blockchain projects. There are fundamental questions in relation to business logic, data schema, unit testing and debugging that is all pervasive. This has been recognized and addressed as well. In a blog post, Microsft says “While there are some nuances to the approach, the good news is that just like other types of solution development, this model can readily be addressed in a DevOps model.” They have introduced “DevOps for Blockchain Smart Contracts,” a whitepaper that details using the development kit for blockchain-based apps in a multitude of scenarios.

Earlier in the year, Azure had introduced a proof-of-authority (PoA) algorithm on its Ethereum (ETH) blockchain product, as a way to help develop decentralized applications (DApps)

A Platform For The Future

The Azure Blockchain Development Kit, the multinational hopes, will be a great stride forward in enabling development of ” end to end blockchain applications accessible, fast, and affordable to anyone with an idea.” With Microsoft’s increasing interest and investment compounded with the wealth of knowledge they bring, this should be a robust platform for developers
Solutions such as these are encouraging for any industry let alone a budding one. It is another example of the expanding influence of the cryptosphere and is encouraging to see an industry leader looking to associate, listen and look for solutions to help build the future.

DeepBrain Chain’s Silicon Valley Lab Receives Strategic Investments from European-American Giant and Gobi Venture Capital

DeepBrain Chain’s Silicon Valley Lab Receives Strategic Investments from European-American Giant and Gobi Venture Capital

Today we are extremely pleased to announce some major news. DeepBrain Chain’s Silicon Valley lab has received strategic investments from both an undisclosed European-American giant and Gobi Venture Capital. The investments will be put to use to assist the on-going development of DeepBrain Chain and our incubated killer AI app, VisionX.

Expect further details soon.
Yours sincerely, DeepBrain Chain

DeepBrain Chain is working towards building the infrastructure for the next generation of the internet. Through the use of distributed ledger technology and blockchain’s decentralized trust-less mechanism, DeepBrain Chain will provide a global network of AI computing and storage nodes. Sharing AI computing power globally will allow AI companies to save up to 70% on costs while protecting their data privacy. DeepBrain Chain’s Silicon Valley lab has incubated an AI industry chain project — VisionX. VisionX aims to build a cross-industry high-performance AI collaboration platform. It has the biggest database for surface defect image recognition in the world. Through their one-stop-shop of AI services, VisionX can save companies up to 30% on costs as compared to competitors.

Sony Develops Blockchain-Based Rights Management System for Digital Content

Sony Develops Blockchain-Based Rights Management System for Digital Content
BLOCKCHAIN NEWS OCTOBER 16, 2018 11:58 CET

Sony Corporation has announced the launch of a blockchain-based digital rights management system.

In a statement released on its website, the company revealed that the new framework is built on a prior system for authenticating, sharing, and managing rights to educational data previously developed by Sony and Sony Global Education.

In April, CCN reported that Sony filed an application for a patent to store users’ digital rights data on the blockchain. In its patent application, Sony warned that “conventional solutions may not be very reliable and rely on one unique point of failure which could lead to the loss of all the acquired content.”

Blockchain-Enhanced Rights Management

Having recognised the gap in the digital rights management process that blockchain technology can solve, Sony then put into action its plan to develop a suitable system for digital content using blockchain technology. To this end the company filed an application for a patent to store users’ digital rights data on the blockchain on April 26 this year.

An excerpt from the statement reads:
“Today, advances in technologies for digital content creation allow anyone to broadcast and share content, but the rights management of that content is still carried out conventionally by industry organizations or the creators themselves, necessitating a more efficient way of managing and demonstrating ownership of copyright-related information for written works.”

In addition to the functionality of the earlier management system it is based on, this system also provides digital rights management for several new types of content including electronic textbooks and other educational content, music, films, audio, games, scientific data, medical data, VR content, and e-books.

In the statement Sony said:
“[It is] specialized for managing rights-related information of written works, with features for demonstrating the date and time that electronic data was created, leveraging the properties of blockchains to record verifiable information in a difficult to falsify way, and identifying previously recorded works, allowing participants to share and verify when a piece of electronic data was created and by whom.”

In so doing, Sony hopes to become a thought leader in the use of blockchain technology in the educational field through Sony Global Education and in data dispersal and management through Sony Group. The company also intends to continue to explore possible commercial avenues by piggybacking on the blockchain’s technological and commercial advancements.

Ultimately Sony says, the goal is to open up a new world of opportunities for blockchain technology in education and data and information management.

Amazon Web Services’ (AWS) China division is partnering with public blockchain project Qtum

NEWS
Anna Baydakova
Oct 17, 2018 at 12:00 UTC | Updated Oct 17, 2018 at 19:08 UTC

Amazon Web Services’ (AWS) China division is partnering with public blockchain project Qtum

The partnership sees the on-demand cloud computing giant working with a cryptocurrency project with a $325 million market capitalization, making it the 29th largest cryptocurrency, to develop blockchain-as-a-service (BaaS) solutions for enterprises and developers.

Revealed exclusively to CoinDesk, the partnership will allow AWS users to develop and launch smart contracts “quickly, efficiently, and cost-effectively” using an Amazon Machine Image (AMI), according to a press release issued by the Qtum team.

Simon Wang, head of territory business development at AWS China, confirmed the partnership, telling CoinDesk in an email: “Qtum are now an AWS technology partner and one of the partner network members.”

Based in Singapore, Qtum, which raised $1 million last January from investors including Anthony Di Iorio, OKCoin CEO Star Xu, BitFund founder Xiaolai Li and Fenbushi partner Bo Shen, launched its public blockchain a year ago.
Qtum’s AMI was listed on the Amazon Web Services marketplace in July, and since then, the group behind the cryptocurrency has been moving toward a broader technological partnership, Qtum’s marketing director, John Scianna, told CoinDesk.

The two companies have been discussing this since April, he added.

Members of the Amazon Partner Network, according to the company’s website, receive business, technical, sales, and marketing resources to help expand their businesses and support their customers. In case of Qtum, the startup and AWS will work together to get feedback from customers about the use cases most in demand and provide guidance to those clients that don’t have much software development resources themselves, Mike Palencia, Qtum’s chief information officer, told CoinDesk.

“We are going to work together [with Amazon] to contact different customers and clients. We’re looking into use cases, and the best way to do it is to have a contact with companies who have those use cases,” Palencia said. “Some clients have their own ideas and their own developers, and some of them want more support from us, want to talk to us directly.”

https://www.coindesk.com/amazon-web-services-china-partnering-blockchain-qtum/

Harvard, Stanford, & MIT Have All Invested in Cryptocurrency Funds

Breaking: Harvard, Stanford, & MIT Have All Invested in Cryptocurrency Funds

At least five more university endowments have invested in cryptocurrency funds, suggesting that the “herd” of institutional investors is finally beginning to place at least a small bet on the nascent asset class.

As first reported by The Information, a cadre of major educational institutions including Harvard University, Stanford University, Massachusetts Institute of Technology, Dartmouth College, and the University of North Carolina have each invested in at least one cryptocurrency fund through their respective endowments.

Citing an unnamed source familiar with the investments, the publication reported that these five university endowments have invested tens of millions of dollars in these funds, which in turn invest in both physical cryptocurrencies and equity in cryptocurrency companies.

CCN previously reported that Yale University, which controls the second-largest university endowment next to Harvard, had allocated a portion of its $29.4 billion in assets into two cryptocurrency funds operated by Andreessen Horowitz (a16z) and Paradigm.

Even with these investments, the six universities that are now said to have invested in crypto funds still have very little exposure to this asset class. Nevertheless, the fact that they are engaging with the market at all could help legitimize the space.

As The Information journalist Jon Victor explained:

“A move by endowments into funds that will directly bet on cryptocurrencies signals a major shift in investor sentiment toward the asset class, in the same way that institutions over the past decade became more willing to invest in private tech companies. Backing from such closely watched institutions could help validate cryptocurrencies, which are still considered too risky by many institutional investors.”

Cryptocurrency investors and analysts such as Mike Novogratz had long predicted that a “herd” of institutional investors would power the next bitcoin bull market. Ari Paul, a cryptocurrency fund manager and a former portfolio manager at the University of Chicago’s endowment, said in April that he believed that a number of institutions were interested in investing in cryptocurrency but were waiting for major names such as Yale to make the first move so that they would have an “excuse” to do so themselves.

Notably, though institutional investors are generally viewed as having a more sober view of cryptoassets than retail investors, a recent survey by Wall Street strategy firm Fundstrat found that institutions that have already invested in cryptocurrency are actually more optimistic about bitcoin’s near-term prospects than retail investors.

AUTHOR
Josiah Wilmoth

Josiah is an assistant editor at CCN. A former ancient and medieval literature teacher, he has been reporting on cryptocurrency since 2014. He lives in rural North Carolina with his wife and children. He holds investment positions in bitcoin and other large-cap cryptocurrencies. Follow him on Twitter @Y3llowb1ackbird or email him directly at josiah.wilmoth(at)ccn.com