London Stock Exchange Exec: Fiat Cash Impeding Blockchain Trials

Fiat currencies are hampering blockchain innovation – at least according to David Harris, head of commercial innovation at the London Stock Exchange Group (LSEG).

In a keynote address at the third annual London Blockchain Summit today, Harris told a crowd of about 150 global bankers, insurers and technology providers that he looks forward to a day when central banks will issue their own cryptocurrency.

While not a new aspiration, the reason Harris gives for wanting to move to a cryptocurrency equivalent notably stems from LSEG’s role on the Borsa Italiana project, which looks to issue securities on a blockchain. But even with tests underway, in which multiple unlisted companies have been given access to services normally reserved for public firms, LSEG continues to encounter obstacles related to paying for securities with cash.

“Eventually, and hopefully, central banks will issue their currency in a digital form on a blockchain, because then that will facilitate collateral movement,” Harris said.

The statements underscore that while some central banks have deemed cryptocurrencies a threat and moved to ban them, others are in fact exploring the potential benefits of issuing fiat currency on a blockchain.

But, Harris is conscious that there are factors that could impede a swift embrace.

As blockchain technology was in large part developed to make banks and other middlemen unnecessary, once a central bank decides to issue a cryptocurrency, that could call into question the entire concept of commercial banking, Harris said.

As Harris puts it, “nothing is easy.”

He concluded:

“You’re not going to wake up one day and suddenly have a crypto-dollar facilitating collateral movements. The policy decisions you have to make from here to there are huge.”

David Harris image via Michael Del Castillo

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Source: The Global Blockchain

SEC Alleges Day Trader Used Bitcoin to Hide Fraud Profits

The U.S. Securities and Exchange Commission (SEC) is suing a Philadelphia day trader for alleged fraud, claiming they used bitcoin to hide their profits.

On Oct. 30, the SEC filed suit against Joseph Willner, accusing him of illegally taking over more than 100 brokerage accounts and using the victims’ funds to artificially inflate stock prices that he would then trade against advantageously.

In order to hide the profits of those activities, the SEC said, Willner used an unnamed bitcoin exchange to convert the funds from U.S. dollars to bitcoin. Those proceeds were then transferred to another individual, who was not named in the lawsuit.

The agency said in a release:

“To mask his payments to the other individual as part of a profit-sharing arrangement, Willner allegedly transferred proceeds of profitable trades to a digital currency company that converts U.S. dollars to Bitcoin and then transmitted the bitcoins as payment.”

According to the complaint, the two made at least $700,000 in profits through the alleged account take-over scheme. The SEC added that its investigation is still ongoing.

The case was investigated through the SEC’s Cyber Unit, which was unveiled in September and is aimed in part at crimes involving cryptocurrencies.

“Account takeovers are an increasingly significant threat to retail investors, and it is exactly the type of fraud our new Cyber Unit is focusing on,” Stephanie Avakian, Co-Director of the SEC’s Division of Enforcement, said in a statement.

Gavel image via Shutterstock

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Survey: Younger Americans More Interested in Cryptocurrencies, ICOs

Younger Americans appear to be more interested in cryptocurrencies compared to other age groups.

That’s according to the latest survey published by digital student loan servicer LendEDU, which asked roughly 1,000 U.S. citizens about ether and Ripple’s XRP token at the end of October. The questions ranged from whether people had heard of ether and XRP to if they would invest in the cryptocurrencies.

According to the survey, 31.6 percent of respondents have heard of ethereum (with 18.2 percent planning to invest in it) while 22.2 percent have heard of XRP (with 14.8 percent intending to purchase some).

After breaking the results down by age, the data shows that roughly a third of respondents between the ages of 18 and 44 planned to invest in ether, while another third did not. The final third was uncertain.

A far smaller portion of adults aged 45 and up planned to invest in ethereum, with between 89–98 percent of respondents saying they were either not going to invest or were unsure.

The results of the research closely match LendEDU’s previous survey, which instead took a focus on bitcoin. In that survey, the majority of respondents who had heard of bitcoin were also in the younger age ranges, while older respondents indicated less awareness of the cryptocurrency.

The latest survey also looked at initial coin offerings (ICOs), finding that roughly a quarter of respondents had heard of the blockchain funding model, while 75.1 percent had not. However, there was some uncertainty around the status of ICOs among even those who had heard of them.

LendEDU said of the results:

“In our September survey, we found that 10.69 percent of Americans believed that owning bitcoin was illegal in the United States. In our October survey, we found that 21.00 percent of respondents believe that investing in an initial coin offering is illegal. And, 61.10 percent of respondents were unsure about the legality of investing in an initial coin offering.”

On the other hand, 15.1 percent of respondents said they plan to invest in an ICO in the future.

Survey image via Shutterstock

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Source: The Global Blockchain

Swarm Closes $5.5 Million ICO for Alternative Investment Fund

Swarm, a cooperative ownership fund for investment assets, has raised $5.5 million in an initial coin offering (ICO).

Philipp Pieper, a partner at the company, told The Global Blockchain that 637 contributors took part in the token sale, which was split into two phases. All told, those backing the project gave 18,048 ethers in exchange for 8,171,014 SWM tokens, with almost all of the funding being raised during the pre-sale.

Owners of Swarm Fund tokens can vote now on the way in which their tokens will become liquid on the open market, reflecting a pivot the company made two years ago, to focus on decentralized governance.

Swarm Fund seeks to enable people to buy into investments that they might not be able to otherwise access. In order to make decisions about investments, Swarm designed a voting system that uses the SWM tokens to determine the outcome.

The first test of its voting system is underway now, according to the firm. Token holders have four options to choose from, ranging from large, infrequent distributions to smaller, more frequent ones, according to a blog post describing the vote.

“This is kind of a big deal,” Pieper wrote The Global Blockchain, “as this directly influences the behavior of the token and it draws in buyers to become ‘active investors’ right away.”

Voting will run through Nov. 6, with token holders ballots being proportional to their overall holdings.

Of the funds gathered, 25 percent of funds raised will be used to support the foundation that will manage the token, with the remainder going toward software development. According to its whitepaper, Swarm’s goal had been to raise $55 million.

The completed sale represents the latest utilization of the blockchain use case this year. CoinDesk’s ICO Tracker shows that more than $2.6 billion has been raised through token offerings to date.

Bee hive image via Shutterstock

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Source: The Global Blockchain

Vertcoin Clocks Record High Ahead of Reward Reduction

Bitcoin isn’t the only cryptocurrency trading at all-time highs today.

At press time, the vertcoin-U.S. dollar (VTC/USD) exchange rate is $5.55, its highest level ever. Week-on-week, VTC has witnessed a 69 percent appreciation in value, while on a monthly basis, its price has gone up by an astonishing 431 percent.

So, what’s behind the rally? The boost for the lesser-known crypto appears to be occurring as it closes in on a reduction of its block reward, expected on Dec. 12.

The term “block reward” refers to the amount of the cryptocurrency received by miners for creating a block. As a result of a coded halving mechanism, production of new coins will drop from the current level of 50 VTC to 25 VTC in a matter of weeks.

With this drop in supply on the cards, simple economics suggests that value of existing vertcoins might be likely to rise. Traders would seem to agree, as volumes have climbed 79.22 percent in the last 24 hours, most notably on the Bittrex and Poloniex exchanges.

Another reason for the rally could be increased attention on the coin following the introduction of cross-chain atomic swaps, which allow direct trades between its blockchain and other compatible networks.

On Sep. 20, Litecoin creator Charlie Lee tweeted the news of a successful swap between the litecoin (LTC) and vertcoin blockchains using the technique, making it one of the first to support the innovation. Looking back, VTC began its record rally in late September, indicating the positive impact of the technology may have been priced-in.

However, at press time, the rally looks to be stalling and the price action analysis indicates the potential for a healthy correction.

4-hour chart

If the current candle closes in the red, a bearish price-relative strength index (RSI) divergence would be confirmed. A bearish divergence occurs when the price forms higher highs and the RSI forms lower highs. It indicates a weakness in the trend.

View

  • VTC could see a healthy pullback to $4.00 if the bearish RSI divergence is confirmed.
  • The RSI is overbought on the daily chart as well, hence a short-term consolidation in the range of $4.00 to $6.00 is more likely.

Circular saw image via Shutterstock

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Source: The Global Blockchain

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.

Vietnam’s Central Bank Announces Ban on Bitcoin Payments

Vietnam’s central bank is prohibiting the use of bitcoin and other cryptocurrencies in payments.

According to an Oct. 30 statement, the State Bank of Vietnam said that cryptocurrencies are not a “lawful means of payment” in the country, and the “issuance, supply, use of bitcoin and other similar virtual currency as a means of payment is prohibited.”

From next year, it goes on, illegal use of cryptocurrencies in payments will be subject to penalties of between 150 million ($6,600) and 200 million ($8,800) Vietnamese dong (VND).

The central bank states:

“As from January 1, 2018, the act of issuing, providing and using illegal means of payment (including bitcoin and other similar virtual currency) may be subject to prosecution.”

The moves comes as part of a new legal framework for cryptocurrencies instigated by Vietnam’s Prime Minister Nguyen Xuan Phuc. That process has now been completed and the framework submitted to the government, the State Bank indicates.

Local reports suggest that the ban may already be having an impact on local institutions.

News source VietnamPlus said that FTP University in Hanoi, which recently announced it would allow students to pay for tuition in bitcoin, could now be forced to reverse that decision. Representatives of the State Bank reportedly stated that, if the university continued to treat bitcoin as a “legal means of payment,” it would be “committing an act of violation under the current law provisions, and may subject the university to the appropriate sanction.”

The move by the central bank is likely to come as a shock to many in the domestic cryptocurrency space. When the prime minister requested the framework to be drawn up in August, there were hopes the country might formally recognize bitcoin as a form of payment next year.

However, the country has previously issued warnings about bitcoin and blocked credit institutions from offering digital currency services.

State Bank image via Shutterstock

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Bitcoin’s Price Climbs Above $6,400 to Hit All-Time High

The price of bitcoin has hit an all-time high, crossing $6,400 for the first time.

According to data from the CoinDesk Bitcoin Price Index (BPI), the price reached an average of $6,415.28 across global exchanges at roughly 14:00 UTC today. On Oct. 29, the price of bitcoin rose to $6,306.58, a move that came just over a week after markets moved above $6,000 for the first time.

Data shows markets have consistently traded above this level since Oct. 29. Overall, the price is up more than 500 percent since the start of the year, having begun trading below $1,000.

Today’s climb also represents a gain of more than $200 in 24-hour trading, per data from the BPI, bringing bitcoin’s market capitalization to roughly $106 billion.

At press time, bitcoin is trading at $6,381.07, a gain of about 4.2 percent on the day.

Other top-10 cryptocurrencies (by market capitalization) have seen mixed results in terms of trading, including a notable decline in bitcoin cash. As reported by The Global Blockchain, the cryptocurrency’s price has been trending down in the run-up to a planned technical change.

This article has been updated.

Image via Shutterstock

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Source: The Global Blockchain

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.

Derivatives Giant CME Group to Launch Bitcoin Futures Contract

Derivatives marketplace operator CME Group has announced plans to launch a bitcoin futures product in the fourth quarter of this year.

Though the exact release date has yet to be revealed, CME said that the futures would be settled via cash and based on its CME CF Bitcoin Reference Rate, an index it debuted in Nov. 2016 in partnership with London-based Crypto Facilities. The futures would be listed on CME, the company said.

Terry Duffy, CME Group chairman and CEO, said in a statement:

“Given increasing client interest in the evolving cryptocurrency markets, we have decided to introduce a bitcoin futures contract. As the world’s largest regulated FX marketplace, CME Group is the natural home for this new vehicle that will provide investors with transparency, price discovery and risk transfer capabilities.”

According to the company, the launch is contingent on receiving approval from U.S. regulators. As previously reported, recent efforts to create financial products around the cryptocurrency have hit some headwinds, particularly those that involve the creation of derivatives contracts.

That said, startups like LedgerX – which is licensed as both a swap execution facility and a derivatives clearing organization – have already moved to capture some of the interest and demand in these products. Established firms such as CBOE are seeking to list similar derivatives as well.

Image via Shutterstock

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Source: The Global Blockchain

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.

Last Laugh? Dilbert Creator Scott Adams Talks Plans for Token Launch

When Scott Adams announced his company would embark on an initial coin offering (ICO) on his blog Friday, he wrote without sarcasm that the day might be one of the “biggest” of his life.

Quite the statement from the creator of the beloved Dilbert comic strip, readers may be surprised given Adams’ recent, pointed take on blockchain mania. But far from just lampooning the technology, Adams is gearing up to get firsthand experience of how it can be used for fundraising.

WhenHub – a time visualization firm co-founded by Adams – is now preparing to launch a token of its own, preceded by an offering of Simple Agreements for Future Tokens, or SAFTs.

The project, according to Adams, allows subject matter experts to sell small amounts of time to clients, who will consult in a Skype-like video call session over the platform, the WhenHub Interface Network (WIN). The new product will facilitate auctions and payments, a system that would be built on top of ethereum using smart contracts, taking the tedium out of payments and invoicing.

In interview, Adams explained that he went through much the same process as everyone else: going from asking “What the hell is this?” to having days where he kind of started to get it and others where he could see the bigger picture.

Adams told The Global Blockchain:

“Once you see different applications for the blockchain, you start to see: This is way more than I ever imagined.”

Adams went on to explain his recent strips about blockchain aren’t intended to inspire others to write off blockchain tech.

Rather, he said, they have been inspired by how difficult it can be to explain the technology. In this way, he reasons the comics reflect the way it feels when someone understands something very new and they have to talk to someone else who doesn’t.

“This is based on a real technology that I think you can say is tried and true,” Adams said. “It’s not like a management fad … It’s more like the internet in the early days.”

Bitcoin, in particular, has impressed Adams because “the secret inventor merged technology and persuasion,” he said. His recent writing has focused heavily on the latter topic, including a new book, “Win Bigly,” on how Donald Trump convinced voters to elect him president.

Later on, Adams would use similar wording when discussing how bitcoin took advantage of the psychology of scarcity, hipness and greed to convince people to adopt it and treat it like it like gold.

“It’s one of the greatest pieces of persuasion the world’s ever seen,” Adams said.

Getting to WIN

WhenHub’s CTO arrived at blockchain after creating previous products that helped people conceptualize and manage time, such as calendar management, timeline visualization and meeting coordination.

Adams said:

“As the world often goes, you start with one good idea and then you discover others that might be more fun and more profitable to chase.”

The company held a hackathon early in the year in which one of the entrants included a blockchain element in his not-quite-completed project. It came to mind for another WhenHub co-founder, CTO Nik Kalyani, when he was speaking to a consultant friend about the struggle to find that next client after completing a project.

WIN will now allow skilled people to squeeze revenue from gaps in their schedule, while enabling consumers to get knowledgeable answers to very specific questions. Adams said he could have used WIN recently when he spent six months trying to set up a live-streaming studio in his home that could work on all the platforms, such as Facebook and Periscope.

“There are just some things you can’t Google,” he said.

An hour with someone who has set up a lot of such systems, he continued, would have saved him a lot of time and headache.

Adams, too, says he gets lots of requests for his time, but finds it difficult to manage all the requests. When he does sit down with people, “most times they have 15 minutes-worth of questions,” he said.

So experts on WIN can post increments of time as small as 15 minutes on their calendar, setting a minimum price for a consultation. Clients interested in talking to them can then bid for the time slot, and the winning bid is permitted to connect with the expert.

After WhenHub verifies the session took place, client funds are released to the expert via a smart contract.

The WHEN token

Equally important to the network will be its custom cryptocurrency.

An ERC-20 token built on top of ethereum, WHEN will manage payments between experts and clients on the WIN platform. By creating its own token, the company is able to seed early adopters with rewards for participation for useful activity without the need to spend fiat money to buy ether to provide those incentives.

“This is a case where the token is marketing as well as technology,” Adams said. “The two worlds collide.”

Early experts on the platform will be rewarded with tokens for doing things like completing their profile, linking it with social media (such as LinkedIn) and getting their identity verified with WhenHub partners. Provided they do a good job and manage to attract clients, those seed rewards will start to take on real value.

The company has devoted 26 percent of the total pool to drawing influencers onto the network.

Adams expects the earliest adopters to be people with technological skills, though he also expected that counselors of various kinds might use the service as well.

“I would be amazed if sex workers don’t find this, because they find everything,” he added.

Larger strategy?

Going forward, WhenHub aims to sell enough tokens to fund the company’s operations for two-and-a-half years, which Kalyani estimated will require about $35 million.

Of the total 875 million tokens, 350 million will be offered via a SAFT, according to its white paper. The pre-sale is open now, with a minimum investment of $50,000, and a token bonus of 30 percent.

A public sale will open on Nov. 10 and run through the end of the year, with a minimum purchase of $250. Early buyers in the public sale will get a token bonus as well.

Still, for those sitting on the sidelines, Kalyani was keen to note that the team believes WHEN tokens could also end up finding a place in other products, hinting at a larger strategy in mind that he believes might continue to make it compelling.

Kalyani concluded:

“We’ve always had this vision to solve problems with time.”

Scott Adams image via VLAD TV/YouTube

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Source: The Global Blockchain

Meet Earn.com: 21 Rebrands Social Network In Shift Away from Bitcoin

21 Inc, once a maker of bitcoin mining hardware, is rebranding to emphasize its new focus on using cryptocurrency to power a social network.

Effective today, the startup has changed its name to Earn.com to drive home the message users can get paid for answering emails and completing tasks, according to a company blog post. The rechristened startup also confirmed it’s on track to issue a token that would replace bitcoin as the currency it uses to incentivize people to join the network by the year’s end.

Separately, the company notified customers last week that it had discontinued support for the Bitcoin Computer. The pocket-sized mining device, which initially retailed for $400, was once 21’s flagship product.

Taken together, the moves underscore how far one of the best-funded startups in the blockchain space has moved from its roots.

In an interview with The Global Blockchain, CEO Balaji Srinivasan said the new name gives people “an easier way to understand the purpose of the company.” He described Earn.com as “the first commercial social network,” combining elements of LinkedIn and Amazon’s Mechanical Turk.

The advantage for users over popular social media platforms like Twitter, he said, is simple:

“You’re not just wasting time, you’re making money.”

Sends with benefits

Specifically, users can make money in several ways, according to the company.

They can create a public profile for receiving paid messages; join lists of people with similar skills (e.g. Python programmers) to receive “microtasks” such as completing surveys; or set up an autoreply on their email encouraging senders they don’t know to pay for responses (with a whitelist, so real acquaintances can be spared the request for money).

As for the senders of mass emails, who aren’t used to paying for the privilege, Earn.com claims they can get much higher response rates when recipients have a monetary incentive to write back.

According to the post, offering $1 for the recipient to read and answer an email yields response rates over 30 percent within 24 hours, and $10 gets response rates over 70 percent – crushing the low-single-digit performance typical of cold emails. Senders pay only if they get a response.

‘Not an ICO’

Stepping back, 21 raised $116 million from a group of prominent investors in multiple rounds revealed two years ago, when it was still squarely in the hardware space. The valuation reflected 21’s early success in bitcoin mining, but that business has since grown more competitive, and Srinivasan (a board partner at VC firm Andreessen Horowitz who joined 21 as CEO in 2015) has been steering the company toward a software model.

According to Srinivasan, the company has plenty of capital left, and fundraising is not the purpose of the upcoming token issuance.

“It’s not an ICO,” he said emphatically. Tokens will be exchanged for “labor,” not capital, he explained.

Rather, the Earn.com token launch is meant to encourage users to join the network sooner. Users earn tokens just by signing up for the platform and getting verified, and the token reward for doing so will be cut in half each time Earn.com’s user base doubles. (After receiving that reward for joining, users will be able to earn additional tokens by answering emails or doing tasks, the way they earn bitcoin currently.)

To give the asset scarcity, no tokens will be created after the launch, and supply is capped at 21 million, of which 54 percent will be reserved for users, according to the firm. Another 30 percent will be allocated to Earn.com employees and backers, and the remaining 16 percent will go to outside researchers and developers.

Aside from their function as an internal currency to compensate users for their work, the tokens will also serve as an API key for programmatic purchases, according to Srinivasan. And since they are ERC-20 tokens, they will be eligible for listing on exchanges, giving users a way to cash out, including in bitcoin.

An end, and a beginning

In addition to being the company’s first day as Earn.com, Friday marked the “end of life” for server-side support of the Bitcoin Computer, 21 command line interface (CLI) and API marketplace, according to the email sent to customers last week.

Despite the wind-down, the email deemed the hardware product a success – because, it said, one of the tutorials published when 21 released the device grew into the current get-paid-to-answer-emails application.

“Going forward, we’re going to be putting all our energy into that product and the corresponding token launch … because we think the ability to earn digital currency by replying to emails and completing tasks will be one of the most useful applications of the blockchain,” the note said.

Image via Earn.com 

‘The Global Blockchain’ is a leader in blockchain news. ‘The Global Blockchain’ is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies.

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Source: The Global Blockchain