Almost 90 percent of cryptocurrency exchanges’ reported trade volumes may be incorrect, new research from trading analytics platform The Tie warned in a digest released on March 18.

Reporting on figures gathered from 97 exchanges, researchers found that the vast majority of the volume claimed to come from users may not in fact exist.The revelations came as a result of calculations of lesser-known exchanges versus well-known businesses such as Binance and Kraken.

“In total we estimated that 87% of exchanges reported trading volume was potentially suspicious and that 75% of exchanges had some form of suspicious activity occurring on them,” The Tie wrote in social media comments on the findings. The organization added:

“If each exchange averaged the volume per visit of CoinbasePro, Gemini, Poloniex, Binance, and Kraken, we would expect the real trading volume among the largest 100 exchanges to equal $2.1 (billion) per day. Currently that number is being reported as $15.9 (billion).”

Exchanges have often fielded accusations of volume misreporting: a similar reported issued in March 2018 warned of similar problems with data from exchanges.

Then, as now, Binance CEO Changpeng Zhao (CZ) took industry participants to task, arguing listing resources such as CoinMarketCap added to the confusion.“Why do exchanges fake volumes?” he queried on Twitter following The Tie’s report. CZ also wrote:

“(CoinMarketCap) is [the] highest traffic website in our space, and [the] biggest referrer for all exchanges. Ranked high on CMC has benefits for getting new users. BUT at the expense of DESTROYING CREDIBILITY with pro users.”

Zhang repeated similar claims about CoinMarketCap which appeared in December, focusing on the the top 25 Bitcoin (BTC) trading pairs.Last month, meanwhile, Cointelegraph reported on how overall exchange volumes had dropped to their lowest levels since May 2017.

Facebook is developing its own cryptocurrency for payments, according to at least two reports, a move that has the potential to make the social network billions of dollars while also helping to eliminate fake news and bots.

Although the social media giant has not publicly commented on reports from Bloomberg and The New York Times, it did acknowledge it's exploring the distributed ledger technology(DLT).

"Like many other companies Facebook is exploring ways to leverage the power of blockchain technology. This new small team is exploring many different applications. We don't have anything further to share," Facebook said in a response to a Computerworld request for comment.




[ Related: The top 5 problems with blockchain ]

While details are few, the reports based on unnamed sourses claim a cryptocurrency would allow users of Facebook's WhatsApp messaging platform to send money to contacts, similar to how Venmo or PayPal allow cross-border payments; the difference is that there would be no middleman (i.e., a central bank or clearing firm).

According to the Times' article, Facebook has already spoken with cryptocurrency exchanges about selling its crypto coin to consumers; others believe the social media firm would not tie payments to a strict "cryptocurrency," opting instead to use a stable coin backed by U.S. dollars and other fiat currencies.

"They'll get exchanges to onboard customers with the KYC [know your customer] process and enable them to buy the currency," said Avivah Litan, a Gartner vice president of research.

"The details are sketchy, but my guess is they increase ad revenue and offer users a PayPal-like experience...and they don't get regulated much.

"Stable coin networks require operators to keep collateral in a bank, so that if $1 billion in digital coin is issued, an equivalent amount must be available on deposit or reserve, according to Litan.

Cryptocurrencies, such as bitcoin that aren't backed by fiat currencies, have no intrinsic value other than supply and demand.In a note to investors this week, Barclays internet analyst Ross Sandler said a "Facebook Coin" could net the social network as much as $19 billion in revenue by 2021, according to a report from CNBC.

"Merely establishing this revenue stream starts to change the story for Facebook shares in our view," Sandler told CNBC.

Because blockchain-based payment networks eliminate the need for central banks that enable payment processing, the time and fees associated with payment, clearance and settlement can be cut.

DLT also has the added attraction of avoiding regulation, which has yet to catch up to the blockchain industry.

The Facebook interest reflects gathering interest in using blockchain-based networks to move money around.In February, the largest U.S. bank by deposits, J.P. Morgan, launched its own stable coin. JPM Coin, as the bank is calling it, has the equivalent value of one U.S. dollar.

"When one client sends money to another over the blockchain, JPM Coins are transferred and instantaneously redeemed for the equivalent amount of U.S. dollars, reducing the typical settlement time," JPMorgan said in an online FAQ.

 "The JPM Coin is based on blockchain-based technology enabling the instantaneous transfer of payments between institutional accounts."And just this week, IBM launched a payment service using a stable coin for international money transfers.

On Facebook, users who want to purchase advertised products must currently type in credit card information – not big deal on a desktop computer, but a somewhat more arduous experience on a mobile device that leads to people dropping off the site, according to Litan.

"I've talked to someone who uses Facebook extensively for advertising and business and he said [blockchain] is good for advertisers because it'll convert more customers because it's a one-click pay," Litan said.

"So, [customers] will have a currency where they'll just pay and that way [Facebook] will keep all the payments within their own network and with more conversions and higher advertising rates.

"Jack Gold, president and principal Analyst of J. Gold Associates, believes Facebook is interested in entering the "lucrative" the mobile payments market, where it will compete with Apple Pay, Google Pay, Samsung Pay and others.

 "They have a huge installed base and if they can leverage a payment opportunity it could generate some pretty big revenues for them," he said.

Facebook, however, could also cash in on blockchain's native cryptography, which enables network operators to authenticate users through hash keys once they're registered; the process keeps identities private but means there's an authentic user on the other end and not a bot.

"It can also be used to enhance their ability to fight... 'fake news' by requiring that everyone posting be registered and have an audit trail," Gold said.

Blockchain technology creates an immutable record where a file or "block" of data is inextricably tied to the previous one through a hash; it's a write-once, append-many technology.

Because of its cryptography capabilities, blockchain could also help Facebook comply with new international privacy laws, such as the EU's General Data Protection Regulation (GDPR), which targets citizens' personally identifiable information (PII), providing transparency around its use and giving people the right to restrict its use or request it be deleted all together.

If a user deletes their hash key, their information is no longer accessible, meaning cryptographic deletionis  just as effective – if not more so – as traditional data deletion.

Today, registering with blockchain is hard due to the need to confirm the identity of the users (e.g., requiring them to have an ID, picture, etc.), Gold said via email.

"So the person can be confirmed and it's a very manual process. But that could potentially be simplified for Facebook needs.

"There is however, a downside to collecting user information in order to authenticate them; it means Facebook now becomes the repository for a lot of personally identifiable information.

"But I suspect there will be a lower bar on identity for Facebook users that can still offer some level of identity without all the serious identity confirmation needed in financial transactions," Gold said. "Although any payment system might still need that, so there may be levels of identity confirmation."

Retail investors are lining up for the latest twist in the never-ending crypto craze.

BlockFi, a fintech startup backed by billionaire Mike Novogratz’s Galaxy Capital, began providing interest-bearing accounts this month that offer up to 6.2 percent in annualized returns paid in Bitcoin or Ether. Since a March 5 launch, they’ve attracted at least 10,000 customers, 90 percent of whom are retail investors.

The company has taken in over $35 million in deposits, with large accounts pulling the average balance up to about $40,000.

BlockFi’s interest rate is set on a month-to-month basis and is based on a combination of rates BlockFi sees in the institutional cryptocurrency borrowing market, as well as a budget it set for customer acquisitions, Zac Prince, chief executive of New York-based BlockFi, said in an interview.

“We expect the interest rate in the account to be higher in times when prices are falling, and lower when prices are rising because demand to borrow Bitcoin is partially driven by market sentiment,” said Prince.

“We are bullish on the cryptocurrency market and on Bitcoin long term,” he said, which would ultimately result in lower interest rates.

It turns out that investors might do fine just holding onto their coins right now rather than depositing their crypto assets with BlockFi. Bitcoin has rallied about 8.5 percent since December to around $4,000.



The accounts have attracted push back in a world that already lacks expansive regulatory oversight and suffers from a pandemic of scams and unanticipated meltdowns such as the recent shuttering of the digital-asset exchange Quadriga CX following the death of its founder.

BlockFi’s critics point to the terms and conditions that state the company can determine the interest rate each month at its sole discretion.

“A superficial review of their splash page and their terms and conditions shows that their advertising is not necessarily what they’re guaranteeing,” said David Silver, founder of the Silver Miller law firm in Coral Springs, Florida.

“As a securities fraud lawyer, my job is to protect people who are misled into misrepresented investments; and it’s understandable why people would be confused if they didn’t receive their 6.2 percent because BlockFi’s advertising makes it seem like that’s a guaranteed rate of return.”

BlockFi has been open about this and the rate will “definitely” change in the future, said Prince. “The way that it works is we will announce rate changes in advance of the change happening and they won’t go into effect immediately,” he said.

“We didn’t launch with a 6 percent rate with the intention of changing it one month later and pulling a big gotcha on everybody. That would be really bad business.”Clients can deposit either Bitcoin or Ether (the only coins currently accepted) and the company lends the funds to crypto investors for arbitrage, short-selling or market-making trades at rates ranging as high as 12 percent.

BlockFi’s interest rate is nearly three and a half times higher than the next-nearest rate of 2.5 percent from Customers Bank online savings accounts or three and a half times times higher than that offered on 120-month JPMorgan Chase certificates of deposit.

But while deposits held by traditional banks are insured by the federal government in case of default, BlockFi’s accounts offer little downside protection.

FDIC insurance isn’t available in the crypto world. Instead, Tyler and Cameron Winklevoss’s Gemini Capital is providing custody and insurance against cyber theft, said Prince.BlockFi’s also at the mercy of an unstable crypto market, which saw Bitcoin -- its largest cryptocurrency -- lose more than 70 percent of its value last year.

And the interest rates paid out are only as valuable as the price of Bitcoin or Ether at the time of payout.

Obvious Risks

“It struck me that it could be misconstrued by unsophisticated retail investors,” said Tim Swanson, founder and head of research at PostOak Labs. “In order to use some of this cryptocurrency technology, you have to be a little bit tech savvy.

”But BlockFi says risks related to its products are obvious -- and have been part of the crypto market for a while.

“It’s systemic risks,” like failure in the Bitcoin blockchain that could push prices down an order of magnitude more than it previously has, said Prince. “In our terms and conditions, we have thorough, bold print sections on risk disclosures.

”BlockFi also offers crypto-backed loans with rates ranging between 4.5 percent to 11.25 percent, and eventually hopes to offer an array of services similar to what other fintech platforms -- like SoFi -- offer.

“They started with a core market segment, which for them was HENRYs -- high earners, not rich yet,” said Prince.

“They delivered one product to that market segment -- and the one product was student loan refi.” Since then, SoFi’s diversified its product suite to include mortgages, stock trading and savings accounts, among other things. “We think of ourselves as a company kind of like that.”

Switzerland’s executive branch will undertake the unenviable task of clearing up the muddied lines around crypto trading platforms, FINMA’s supervisorial reach, and anti-money laundering provisions.

Switzerland's Federal Assembly, the federal legislature of the Swiss parliament, approved a motion on March 20 instructing the Swiss Federal Council, which serves as the country's collective executive head of government, to begin adjusting existing legislation to apply to cryptocurrency regulation.

According to the press release, the Federal Council will now be responsible for "adapt[ing] the provisions on procedural instruments of the judicial and administrative authorities so that they can also be applied to cryptocurrencies.

"Introduced by assemblyman Giovanni Merlini, the approved motion is meant to help the Swiss government "close gaps in protection against abuse" of cryptocurrencies, which Merlini says favors "extortion and money laundering.

" Specifically, Merlini hopes that, by adapting the existing laws, a clarification will be made regarding cryptocurrency trading platforms and whether they should be subject to regulation by the Financial Market Supervisory Authority (FINMA), Switzerland's financial regulator.

While it is tempting to view the approved motion as an attempt to forcibly mold existing laws around a new type of financial technology they weren't designed for in the first place, a similar proposal made by Switzerland's Federal Council in December 2018 suggests the government branch will work with favorable flexibility in mind.

At the time of the December proposal – which also asked that existing financial laws be adapted to "deal with new technologies including blockchain" – the Federal Council hoped to create "the best possible framework conditions so that Switzerland can establish and develop itself as a leading, innovative and sustainable location for fintech and blockchain companies.

"Along with the Federal Council's plan to create a pro-crypto regulation framework, the government body also wanted to see a crackdown on the country's anti-money laundering laws.

The Federal Council asked that the Swiss Federal Department of Finance conduct research regarding whether money laundering legislation should be adjusted in relation to certain forms of crowdfunding, as well as reworking the country's Money Laundering Act to more explicitly include decentralized trading platforms.

While the Swiss government works to regulate the nascent financial technology, Swiss retail and financial businesses have been hard at work creating a crypto-friendly environment.

Just this week, the Swiss online retailer group, Digitec Galaxus AG, announced it would begin accepting 10 different cryptocurrencies as payment options for its online retail stores, Digitec and Galaxus.

Additionally, earlier this month, an online banking and trading platform, Swissquote, unveiled the launch of its cryptocurrency storage service, which offers nuclear weapon-proof storage with servers held in a former military bunker within the Swiss Alps.Translations by Google.

NICHOLAS RUGGIERI

Nicholas Ruggieri studied English with an emphasis in creative writing at the University of Nevada, Reno. When he’s not quoting Vines at anyone who’s willing to listen, you’ll find him listening to too many podcasts, reading too many books, and crocheting too many sweaters for his dogs, RT and Peterman.
ETHNews is committed to its Editorial Policy

One of the indices is structured to give a view of the crypto market independent of bitcoin's influence.

Cryptocurrency data provider CoinMarketCap announced today that it has teamed up with Solactive, a Germany-based index provider, to create two cryptocurrency benchmark indices. These indices include pricing data covering the top 200 cryptocurrencies by market capitalization.

One index will include bitcoin (BTC) while the second index will not. The indices are available from Nasdaq's Global Index Data Service (GIDS), the Bloomberg Terminal, Thomson Reuters Eikon (Refinitiv), and Germany's Börse Stuttgart.

The first index is known as CMC Crypto 200 Index (CMC200), which includes BTC. The second, CMC Crypto 200 ex BTC Index (CMC200EX), displays the market's general performance without the influence of BTC, which currently enjoys a 51 percent dominance of all global trading volume.

The indices are weighted according to market capitalization and are rebalanced quarterly. The index constituent weights are fixed on the selection date, which is five days prior to the rebalancing date. At this time, all eligible cryptocurrencies are ranked by their current market capitalization.

This ensures that growing or shrinking cryptocurrencies are accurately represented in the overall index. At any time, if a cryptocurrency is no longer eligible for membership, a replacement is named at the next scheduled rebalancing.

Solactive's announcement explains that "the rationale behind the ex-BTC version of the index is to display the general market conditions in the crypto-currency space while at the same time avoiding market bias through the market's focus currency, [which is] Bitcoin..."Brandon Chez, CEO of CoinMarketCap, said:

"We are excited to launch and share these indices … [which] will promote greater accessibility to cryptocurrency data in an easier-to-digest format. In partnership with Solactive, our chosen index administrator, we hope these professionally-calculated indices will serve to expand the reach of cryptocurrencies into the larger financial markets."

Barring negative surprises, this unveiling of new indices signals a buoyant future for product innovation tied to cryptocurrency investing. 

MARY DRISCOLL

Mary Driscoll covers finance and business trends as a staff writer for ETHNews. She formerly served as an editor for management and finance at the Economist Intelligence Unit and a research principal at APQC. In addition, she has written for The Wall Street Journal CFO Report, HBR-online, and strategy + business.

Her book on corporate treasury management was published by John Wiley & Sons, Inc. Mary enjoys hiking and skiing in the Sierras with family. Her goal in life is to win big on Jeopardy.

With billions of users worldwide, Facebook has the power to bring cryptocurrency well and truly into the mainstream ( iStock/The Independent )Facebook is reportedly preparing to launch its own version of bitcoin for use in its messaging applications, WhatsApp, Messenger and Instagram.

Could this “Facecoin” be the long-awaited breakthrough by a global technology giant into the lucrative market for retail financial services?

Or will it be yet another exaggerated “crypto” project, buying into the continuing excitement about decentralised peer-to-peer exchange but, in the end, not delivering very much?

Time will tell, but my two decades of research into the economics of payments makes me sceptical.We know little about Facebook’s plans. So far there is just one company statement about a new group set up to look into cryptocurrencies, reported by Bloomberg: “Like many other companies, Facebook is exploring ways to leverage the power of blockchain technology.

This new small team is exploring many different applications. We don’t have anything further to share.”

Watch more




Facebook is working on its own cryptocurrency to rival bitcoinSome investigative journalism from Bloombergand The New York Times reveals a little more. Facecoin (and the similar “Gram” cryptocurrencybeing developed by the privacy focused messaging app Telegram) will apparently be a “stablecoin”.

Rather than having a fixed amount of currency that fluctuates in price, depending on demand, Facecoin will have a fixed price and the amount of it in circulation will vary. So unlike bitcoin it will not be a vehicle for speculation.


What will the fixed price be? Bloomberg reports it will be fixed against the dollar. The New York Times says that it will be against a combination of dollar, euro and yen.

Who will use it? Facebook is apparently focusing on providing a technology solution for the large and lucrative remittance market for payments into India. Will transactions in Facecoin be anonymous like those in bitcoin?

No, they will be associated with Facebook accounts, so they won’t be an easy means to avoid laws and regulations.
Reasons to be scepticalWhile this is a fascinating development, some scepticism is in order. If there is one common feature to the many hundreds of crypto and blockchain finance projects announced over the past four years, it is exaggerated early claims.

In one ongoing research project, I have found that of 103 projects announced since 2015 applying blockchain technologies to financial services, all but a handful have quietly disappeared.

None have yet been taken through to commercial-scale launch (although around half a dozen may achieve that by 2021).Is there anything about Facebook’s plans to suggest a different outcome?

The obvious parallel is with the Chinese payment solution WeChat Pay, globally the largest mobile and internet payment solution used by “900 million active users”.

In Beijing and Shanghai “even beggars have QR codes” that allow passers by to scan and give them money using their smartphones. The integration into the WeChat messaging system is what gave WeChat Pay the critical mass to achieve widespread acceptance.

 Facecoin’s integration with WhatsApp and other Facebook services could support a similarly rapid take-off.

But WeChat Pay doesn’t involve cryptocurrency. It uses established server technologies to enable people to transfer money in and out of conventional bank accounts as well as to other users.
The New York Times reports, rather surprisingly, that Facecoin (unlike WeChat Pay) will be based on integration with cryptoexchanges, which trade conventional money for digital currencies, rather than with the conventional banking system.

But given that cryptoexchanges are coming under increasing regulatory pressure because of their lack of transparency and irregularities in how they operate, linking with them is hardly likely to encourage people to adopt Facecoin.

It is also difficult to make sense of the intended use of Facecoin for remittances. Major banks already send dollars virtually instantaneously and costlessly from one country to another. Costs and inefficiencies arise in the final mile when converting funds to local currency and allocating them to a local bank account or for cash collection.

The Facecoin technology will do nothing to address these problems.Who pays out?Another question mark is about the backing for Facecoin. Unlike bitcoin, which is not pegged to any other currency, Facecoin will need the backing of real money to maintain its fixed price.

The safest approach will be full reserving: for every $1 of Facecoin issued, Facebook could hold $1 of reserves in a segregated account.Fractional or partial reserving is also possible but who then guarantees the safety of those reserves?

If reserves do not cover withdrawals, who is then responsible and what compensation is there for holders of Facecoin? Facebook would need a banking licence and subject itself to the full burden of banking regulation. Ideally, reserves would be held with a central bank. But central banks will be reluctant to support a private currency.

Perhaps the biggest reason for scepticism comes from the challenges Facebook already faces over user data, privacy and authenticity. If Facebook takes as big a role in daily payments as it already has in personal communications and social media, then it will become an even bigger target for the growing antitrust movement that seeks to break up the tech giants.

Fundamental change is possible. Cryptocurrency technologies could be used to eliminate the instability of fractionally reserved banking. But this will have to be through a state currency replacing fractionally reserved bank transaction accounts and not through a private currency.

It would probably be wiser for Facebook to outsource Facecoin to an established international bank. But then, of course, this wouldn’t be such a major disruption of established financial services.

Alistair Milne is a professor of financial economics at Loughborough University. This article originally appeared on The Conversation

Square CEO Jack Dorsey said he wants to hire a few cryptocurrency engineers and a designer, to conduct work that will contribute to advancing an accessible, Internet-based financial system that benefits the greater community.

The new employees be able to work from wherever they want, report directly to Dorsey, and can even be paid in Bitcoin, if they so choose.“I love this technology and community.

I’ve found it to be deeply principled, purpose-driven, edgy, and…really weird. Just like the early internet! I’m excited to get to learn more directly,” Dorsey tweeted on Wednesday afternoon.

jack✔@jack#BitcoinTwitter and #CryptoTwitter! Square is hiring 3-4 crypto engineers and 1 designer to work full-time on open source contributions to the bitcoin/crypto ecosystem. Work from anywhere, report directly to me, and we can even pay you in bitcoin! Introducing @SqCrypto. Why?11.6K9:58 PM - Mar 20, 2019Twitter Ads info and privacy

4,739 people are talking about this


Square already allows people to buy and sell Bitcoin on its Cash App, which is also a mobile payments platform that competes with Venmo.Dorsey said Square “has taken a lot from the open source community to get us here,” so this would be his way of giving back to the community—while also helping to further Square’s “broader interest” of having an accessible financial system for the Internet.

“This will be Square’s first open source initiative independent of our business objectives.

These folks will focus entirely on what’s best for the crypto community and individual economic empowerment, not on Square’s commercial interests,” Dorsey wrote. “All resulting work will be open and free.”

Africa continues to dominate Google Trends search interest for “bitcoin,” but that has not translated into widespread adoption of cryptocurrency by users and businesses. Apart from opaque regulation and a lack of awareness, one of the major reasons for this failure has been the expansive use of mobile money on the continent.

Also read: Report: 87% of Crypto Exchanges May Be Falsifying Volume

Crypto Adoption Disappoints, Even as Africa Dominates Bitcoin Search Interest

According to Google Trends, the biggest search interest for bitcoin in the world is by potential investors from Nigeria, South Africa and Kenya – the three biggest cryptocurrency markets in Africa. That dominance is, however, predominantly limited to trading activities on exchanges.

On a few occasions, bitcoin may be used as a means of payment, mostly to overseas suppliers.But despite that world-leading interest, Africa still lags behind the rest of the world in everyday BTC use and adoption.

The cryptocurrency has found it difficult to break the stranglehold of convenience, simplicity and efficiency that, like a magnet, draws millions of Africans to mobile money. The continent of 1.2 billion people is home to over 50 percent of the world’s mobile money services.





Google Trends chart for the keyword “bitcoin”For example, with a basic telephone handset, one can send or receive money via SMS anywhere within a particular country, without the need of an internet connection.

By comparison, you will need a smartphone and a secure internet connection to complete a cryptocurrency transaction. While internet use has risen sharply in the past 20 years, users from Africa account for just 10 percent of the global total, making the case for crypto on the continent even more cryptic.

Also, erratic power supplies in many countries continue to impede the internet access on which cryptocurrency largely depends.

Beating Mobile Money at Its Own Game

Vin Armani, founder and CTO of Cointext, an internet-free wallet service that allows users to send or receive bitcoin cash (BCH) via SMS – just like mobile money – believes his service could rival mobile money in the continent.

 In Africa, Cointext is currently available only in South Africa, and it’s unclear how many people are actually using the service there. “We are preparing to make a major announcement that will give us global coverage (in every country),” Armani told news.

Bitcoin.com.


“We’re currently working on an integration that will make us available for smartphones throughout Africa. We’re also working on SMS solutions for a few other African countries,” another official from Cointext explained separately.

Elisha Owusu Akyaw, a 17-year-old Ghanian crypto investor and influencer, has made a fortune investing in bitcoin.

He believes that “Cryptocurrencies should probably integrate with mobile banking platforms.

” Akyaw might have a point. The mobile money sensation has grown very deeply in African economics to the extent, perhaps, of defining its people.

“The power of financial technology to expand access to and use of accounts is demonstrated most persuasively in Sub-Saharan Africa,” the World Bank’s Global Findex Database detailed in its financial inclusion survey, which found 21 percent of adults on the continent now have a mobile money account.

This is “nearly twice the share in 2014 and easily the highest of any region in the world.”If that is not enough, cryptocurrencies will likely have to fight tooth and nail to gain any reasonable market share in the mobile money-dominated payment systems in Africa, a region often touted as the next frontier for virtual currencies.

In Zimbabwe, publicly listed Econet Wireless controls 95 percent of the mobile money market share through its Ecocash platform. The seven year-old service is so successful that almost every government department depends on it for electronic payments.


With more than six million users in the Southern African country, Ecocash has processed over $23 billion worth of transactions since launch in September 2011.

It boasts more than 32,000 agents (merchants) throughout Zimbabwe. This is the sort of entrenched competition that cryptocurrencies will have to contend with. There will be 725 million mobile phone subscribers in Africa by 2020, according to the GSM Association, who could either plug into crypto or mobile money.

Cumbersome Registration Processes Dissuade Crypto Use

Bernard Parah, a 26 year-old entrepreneur from Lagos, Nigeria, recognizes this challenge and opportunity. Two years ago, he founded Bitnob Quickserve, a platform that allows Africans to buy vouchers and reedem them for BTC without the need to complete KYC or AML procedures.

Parah posits that one of the biggest hindrances to cryptocurrency adoption is the labyrinth of verifications required by exchanges at registration.

“We believe that [the service] will reduce the entry barrier for many people who want to try out bitcoins here in Africa,” Parah told news.Bitcoin.com.

“Onboarding users needs to be made simpler. Many first time users give up at the point where they have to upload their personal identity details for verification.”


Parah also pointed to ease of use and the fear of loss of funds without recovery as stumbling blocks. “A bitcoin address looks like a foreign language to new users,” he notes.

“Many people are not ready to be their own banks, they would rather settle for convenience over security,” said Parah, who reckons there’s need for more awareness and education about crypto.

A litany of fake bitcoin schemes have not helped the cryptocurrency cause either. In Uganda, for example, thousands of people have fallen victim to a number of Ponzi schemes, including the D9 Club, which promised to pay members in BTC.

The scheme, now collapsed, masqueraded as a sports trading company, promising members hefty weekly payouts in bitcoin on initial investment of between $250 and $2,000.

“Scams give Africa [and crypto] a bad name,” decried Chimezie Chuta, an IT specialist and bitcoin enthusiast from Nigeria. Regulation has, as always, been a sticky issue where bitcoin is concerned.

We’re going to have to take a step back and rethink the whole “Bitcoin exchange traded funds (ETFs) are coming” trope.

In February earlier this year, the Securities and Exchange Commission (SEC) put out a solicitation request opening the floor for the public to comment and provide their thoughts on the possibility of allowing a regulated and recognized Bitcoin $BTC▼1.25% ETF.

Since then, seven letters of commenthave been made publicly available.Most people that actually responded to the Securities and Exchange Commission‘s (SEC) request for public input into a Bitcoin ETF really aren’t too fond of the idea. All but one of the seven letters are vehemently against the idea that any form of Bitcoin ETF be approved.

One respondent, Sam Ahn, goes to great lengths to explore how Bitcoin has no intrinisic value. Stating that the “complicated mathematical equation” used in the mining process is not as complicated as Satoshi Nakamoto implied in their seminal white paper.

Most other respondents, while far more concise, follow a similar argument to Ahn. They claim that Bitcoin‘s inherent value is dubious and should not form part of a digital asset based ETF, such as the Van Eck or Bitwise tools.While still strongly against the idea of a Bitcoin ETF, D. Barnwell asks the SECto “watch and wait.

” They say now is not the time for a Bitcoin ETF, but suggest there may be a financial future in which blockchain plays a pivotal role.

One member of the public did speak in favor of a Bitcoin ETF though, claiming that Bitcoin is fast, low-cost, resistant to manipulation and money laundering.

That said, there are cases of cryptocurrency-based money laundering. And Bitcoin transaction fees fluctuate as widely as the value of the coin itself.

 In January 2018, when Bitcoin‘s price was at its highest, fees were well over $30 per transaction.

Want to find out more about cryptocurrencies and blockchain technology? Check out our Hard Fork track at TNW 2019!

This year the City of Lights will serve as host to one of the biggest blockchain technology conferences in the world. An estimated 3,000 attendees will gather for the Paris Blockchain Week.

The week-long event will take place from April 13th to April 19th, 2019. In addition, the innovative event will feature a multitude of events and workshops.  Technology and industry professionals are planning to showcase their blockchain achievements.

The Paris Blockchain Week Summit itself is expecting to draw more than 100 international speakers. Station F will be transforming into the world’s largest startup campus. The summit itself will be a two-day flagship event.

Hundreds of International Speakers
The major attraction of that week will be the Paris Blockchain Week Summit that is taking place on April 16-17, 2019. Hundreds of major industry leaders are attending this unique event.In addition,  key speakers include Binance CFO Wei Zhou and Blockfolio CEO Edward Moncada.

These individuals will present lectures that will touch on the latest breakthroughs in the blockchain industry. Corporate executives from various industries will also present their blockchain achievements. Speech topics include perspectives on three major topics: Technology, Investment, and Regulation.

France Taking Steps As Blockchain Pioneer
France in recent years has taken steps to lead on the world stage as supporter and innovator of blockchain technology. Therefore, the Paris Blockchain Week will serve to demonstrate the uniqueness of the French blockchain ecosystem. The event hopes to reinforce Paris as a European capital of blockchain and crypto-asset fundraising.

TAGS: blockchainParisParis Blockchain WeekParis Blockchain Week SummitStation F



Edward Maggio

Edward Maggio is the Editor in Chief for Business Blockchain HQ. He is an author, attorney and blockchain expert who uses his knowledge of commercial transactions and project management to support blockchain endeavors in Washington D.C. and New York City.

 Stacey Schneider 

Summary: Small companies lead blockchain investment. 70% of overall investment originates from private companies. Projects are 40% more likely to originate from IT, while Ethereum is the foundation for the clear majority (62%). Provide Technologies, Emory University and Aprio sponsored the State of the Enterprise Blockchain Study.

The State of the Enterprise Blockchain Study indicates blockchain adoption is gathering momentum. With participants indicating a 62% increase in blockchain investment this year, blockchain expects to be mainstream technology by 2025.

Our study revealed 28% of companies are actively working on blockchain initiatives. While adoption includes activities across all organization sizes, early adopters tend to be smaller companies with less than 100 employees.

In fact, smaller companies report investing 28x more than companies with over 1000 employees.In a similar vein, private companies hold 70% of the investment in blockchain compared to public companies.

This adoption pattern resonates with previous tech adoption patterns where small businesses adopt more aggressively to gain a market lead, while large scale enterprises typically wait until successful patterns emerge. Increasingly, as best practices emerge, we will see larger scale enterprises more frequently as we edge blockchain toward mainstream technology.

Overall, the companies participating in the study indicate that investment in blockchain will increase by 62%.

What is holding back blockchain adoption?

63% of respondents cite internal skills or a lack of tooling as reasons for slow adoption. Successful blockchain development requires knowledge of computer science for distributed computing, an understanding of cryptography, and typically involves a new programming language called Solidity—as well as competency of protocols and consensus algorithms.

The learning curve appears steep for businesses focused on their businesses. While tools like Remix, Truffle, Ganache and Provide help reduce that learning curve, 50% of respondents need more metrics and patterns that deliver business value to adopt.Interestingly, while strategic adoption may be held up on further evidence, developers are finding reasons to use blockchain.

Our findings indicate blockchain projects are 40% more likely to originate from IT than from the business.

What are they using?

The clear majority use Ethereum. 62% base their blockchain projects on the protocol designed for developers—allowing them to put business logic on chain using smart contracts.

A respectable 42% use the Bitcoin network.Proof of Work (POW) remains the leading consensus algorithm with 42% reporting it as their preferred choice. Proof of Authority (POA) and Proof of Stake (POS) tie for second with 28%. In a distant third, Proof of Signature comes in with 12% of citing the relative newcomer as a preferred option.

The majority of the use cases underway focus on disintermediation—cutting out the middlemen—or increased efficiency.  48% confirm projects focused on business process automation, followed quickly by 46% with authentication projects. This follows the logic that 53% believe the most benefit for customers to be savings from greater operational efficiencies.

About the State of the Enterprise Blockchain Study

The study sampled the current state of blockchain adoption for 82 organizations ranging in size from startups to juggernauts. The median size company employs 250 people, while the mean employs closer to 30,000. The study started began in December 2018 and concludes with this report.

Provide Technologies, Emory University and Aprio sponsored the State of the Enterprise Blockchain Study. Special thanks to Dr. Benn Konsynski and Jagruti Solanki for their help in completing this study.

Posted in News and tagged blockchain, Enterprise, Ethereum, infographic, Research← Provide and BEA Announce Partnership, Videos, Workshop and Webinars

About Stacey Schneider

Stacey is a technologist known for bringing early stage technology businesses to market, including ecommerce, open source, cloud computing, and most recently decentralized applications using blockchain technology.

Cisco Report: 10% Of The World’s GDP Will Be Stored On Blockchains By 2027

Cisco, a multinational technology conglomerate headquartered in the center of Silicon Valley, recently published a report on blockchain technology outlaying the importance of blockchain, how it’s transforming businesses, the future of the blockchain industry, and Cisco’s role in the blockchain ecosystem.

Blockchain: The Tech Breakthrough Megatrend

Cisco’s report starts off by explaining just how big the innovative technology of blockchain really is, and what the future of this industry is shaping up to be.Per the report and according to the International Data Corporation (IDC), global spending on blockchain technology is expected to reach around $2.9 billion in 2019 as industries everywhere investigate ways to use blockchain to increase trust and address challenges around complexity, transparency, and security.

Taking a long-term outlook on the blockchain industry, Cisco provided some insightful estimations that showcase the depth of this industry and how it’s expected to grow.According to Cisco, 83% of executives believe trust is the cornerstone of the digital economy, and it’s expected that the blockchain market will reach $9.7 billion by 2021. Cisco also stated that 10% of the global GDP is likely to be stored on blockchains by 2027.


Image Source: https://www.cisco.com/c/dam/en/us/solutions/collateral/digital-transformation/blockchain-whitepaper....

What’s Driving the Blockchain Revolution

According to Cisco and data from IDC, the blockchain industry is poised to grow bigger and bigger as it lays the foundation for the era of a programmable economy that’s expected to deliver efficiencies and new business value in excess of $3 trillion by 2030.

Per the report, a big driver in this blockchain revolution has to do with the rise of the API economy and how technology is used in enterprise businesses. While technology has advanced, methods of doing business over the internet are experiencing increasing problems.As put in Cisco’s report:

“Today’s organizations must increasingly manage data and transactions among a large number of untrusted parties, creating business challenges around transparency, complexity, and security.”

Therefore, what’s driving the blockchain revolution is the technology’s innovations in transparency, complexity, and security.

Transparency, Complexity, Security

Transparency

Our current technological systems lack transparency, and Cisco’s report highlights this as a major problem in global supply chains. As it currently stands, a product’s journey lacks visibility and presents challenges in tracing its origins, with serious implications to counterfeiting, health, and safety.For example, Cisco notes that counterfeiting is estimated to cost US-based semiconductor companies more than $7.5 billion per year.

Complexity

In today’s world, global trade and commerce involve multiple intermediaries such as brokers, financial institutions, and other third parties that lead to a substantial increase in the cost of doing business. One example noted in the report is that suppliers in emerging markets pay interest on receivable financing as high as 30%.

Security

A major problem in today’s technological systems and infrastructure is the centralized nature of information which provides hackers with a single point to attack and gain control.

A big reason decentralization is important is because 20 billion devices making up the Internet of Things (IoT) are set to be online by 2020, representing a significant number of attack surfaces.

As explained in Cisco’s report, blockchain technology provides significant increases in the 3 areas mentioned above, offering considerable benefits for both enterprise businesses and the global economy in a world that’s becoming more and more digitized.

“Blockchain-based technologies can build a foundation for trust in the enterprise through the digitization of business processes, tokenization of assets, and codification of complex contracts. These technologies can enable business ecosystems, consisting of both internal and external partners, to securely interact and transact without human intervention and dramatically simplify operations for large enterprises.”

Do you agree with what’s said in Cisco’s report? Is blockchain technology the greatest technological advancement of our time? Let us know what you think in the comment section below.

Ethereum co-founder and ConsenSys creator Joseph Lubin said that blockchain technology and decentralization can benefit content creators and journalists. Lubin spoke about different industries that are benefitting from blockchain technology in a video on March 12.

In the video, Lubin said that artists are “set to benefit quite dramatically” from blockchain, as it allows them to attach policies and stipulations for how the content is consumed and shared i.e. derivative works, streaming, public performances, etc. In Lubin’s view, it also allows them to eliminate middlemen:

“I think artists in the music industry on average capture about 11 or 12 percent of the value in the industry and those big record companies are sucking up 70 or so percent. We can replace those record companies with smart contracts on the Ethereum platform.”

Lubin continued that, while there will still be intermediaries such as promoters, they will not be able to “get to a commanding position where they’re extracting enormous rents just because of their intermediary role.

”In regard to journalism, Lubin said that blockchain-driven platforms like Civil could help the “gutted” journalism industry to deliver content directly to the consumer and “return ethics to journalism.” Lubin said that a platform like Civil allows newsrooms to form a code of ethics and stake that security bond on the platform:

“If they break that pledge in some way, their readership, their listenership can call them to task, can challenge their stake and potentially have them bumped off the platform.”  

Earlier this month, Civil announced its official launch, despite a lackluster initial coin offering last year. The platform — which aims to provide an alternative business model to the journalism industry — now allows participants to purchase Civil membership, including CVL tokens which will represent members’ voting power within the Civil ecosystem.

Consider it confirmed: the Howey test is definitely the US Securities and Exchange Commission‘s (SECs) gold standard benchmark for deciding whether a cryptocurrency is in fact, a security.

“Security” is a term used for describing certain financial assets that can be traded. It can refer to any form of financial instrument, even cryptocurrencies and associated tokens.Volume 0% Chairman Jay Clayton finally responded to calls to clarify how the SEC approaches classifying cryptocurrencies as securities. A set of political representatives formally submitted concerns a few months back, which were supported by digital asset think-tank Coin Center.

His reply outlines the SECs stance clearly: the Howey test is its “litmus test” for detecting securities within the blockchain industry, and it’s entirely possible for digital assets once classified as securities to shed that definition altogether.This was enough for Coin Center to declare this a reinforcement of previous SEC statements, which deemed Ethereum (currently) too decentralized to be a security.

“This letter is another reference point for lawyers and developers to look to when determining how their project fits into current regulation,” Coin Center’s comms director Neeraj Agrawal told Hard Fork. “As far as reactions go: people welcome any clarity they can get.”

What constitutes a security in the context of cryptocurrency

The Howey test comes as a result of a legal battle from 1946. It’s really a framework for determining whether a particular asset is considered to be an investment contract (security). It is commonly used to enforce federal securities law.

Clayton’s letter expressed that SEC regulators consider the “touchstone” of securities as “the presence of an investment in a common venture, premised on a reasonable expectation of profits to be derived from the entrepreneurial or managerial efforts of others.

”“Your letter also asks whether I agree with certain statements concerning digital tokens in Director Hinman’s June 2018 speech,” wrote Clayton. “I agree that the analysis of whether a digital asset is offered or sold as a security is not static […].

”Whether a digital asset is considered a security depends on the circumstances and facts surrounding the original investment. Clayton gave an example: when investors (who have “pooled” assets to contribute to funding a project) no longer expect a dev (or group of devs) to carry out managerial or entrepreneurial efforts, their investment may no longer be considered a security.

“A digital asset may be offered and sold initially as a security because it meets the definition of an investment contract, but that designation may change over time if the digital asset later is offered and sold in such a way that it will no longer meet that definition,” he added.

The SEC is ‘policing these markets vigorously’

Clayton also took time to really hammer it home to entrepreneurs in the cryptocurrency space. He noted many stakeholders have engaged with SEC regulators “constructively” and in “good faith,” but others have been preying on the excitement of retail investors to commit fraud.

“The Division of Enforcement has brought a number of important cases in this area, and I have asked the Division’s leadership to continue to police these markets vigorously and recommend enforcement actions against those who conduct ICOs or engage in other actions relating to digital assets in violation of the federal securities laws,” he warned.

Likely, Clayton is referring to a sudden string of settlements with fraudulent projects.

In particular, Floyd Mayweather and DJ Khaled were forced to pay a combined $750,000 for failing to disclose endorsement deals with the CentraTech cryptocurrency.

Around the same time, SEC authorities charged the founder of “decentralized” digital asset exchange EtherDelta with running an unregistered national securities exchange. He agreed to pay $300,000 in fines and penalties.

“The Commission acted swiftly to crack down on allegedly fraudulent activity in this space, particularly where the misconduct has targeted Main Street investors,” boasted Clayton.

“Regardless of the promise of distributed ledger technology, those who invest their hard-earned money in opportunities that fall within the scope of the federal securities laws deserve the full protections afforded under those laws.

”For the full letter, click here. For a breakdown of how cryptocurrency’s asset classification can change over time, click here.

Did you know? Hard Fork has its own stage at TNW2019, our tech conference in Amsterdam. Check it out.

The world’s fifth largest oil and gas producer in the world, Royal Dutch Shell, is getting further into the blockchain game, and is looking to train the next generation of blockchain industry execs.

Shell is looking for “blockchain analysts” as part of its Information Technology (IT) graduate programme, according to a job listing on its graduate careers website.

The job role has seemingly flown under the radar for the last four months after being posted to LinkedIn. According to the job specification, the placement will take place in Shell‘s Blockchain Centre of Excellence (CoE). But what does a “blockchain analyst” even do?

Well, successful applicants will explore potential new applications of the decentralized technology across all of Shell‘s business areas – from its core in oil and gas to new energies and electric vehicles.

They will be responsible for taking potential use cases from “ideation” through to implementation. This will include finding new applications of not just blockchain but other decentralized technologies. It’ll then be the responsibility of the analyst to sell these potential uses to the rest of the business, the job listing states.

Shell is looking for recent Master’s graduates with backgrounds in the following disciplines: mathematics, computer science, and artificial intelligence.Indeed, it makes sense that Shell is looking for the next generation of business-based blockchain proponents.

In November last year, the Dutch firm took part in launching a blockchain-based platform for trading oil, that is replacing a centuries old, traditionally paper-based, process.

What’s more, the fact that Shell is hiring graduates points to a greater trend uncovered earlier this month.

Data gathered by Hard Fork showed that the blockchain industry‘s biggest employers are actually old-school corporate firms like Deloitte, IBM, Accenture, Oracle, and KPMG.

Want to find out more about cryptocurrencies and blockchain technology?

Check out our Hard Fork track at TNW 2019!

The “first wave” of blockchain adoption will be led by permissioned platforms focused on specific use cases or user bases, according to a new EU report.

The EU Blockchain Observatory and Forum published the “thematic report” last week, produced on its behalf by ConsenSys AG and titled “Scalability, Interoperability and Sustainability of Blockchains.

”The document argues that blockchains focused on meeting the specific needs of users provide “a great deal of flexibility” compared to public blockchains. Builders of private platforms also have more freedom to design for performance and security, the authors say.

The EU organization therefore concludes that a small number of global blockchain networks will emerge as “the backbone of a Web of Value.

”However, it continues, three key challenges remain: scalability, that is, the ability to make large volumes of transactions at high speed; interoperability, being able to exchange data across blockchains; and sustainability, “environmentally responsible” platforms with long-term viability.The group states:

“It seems clear to us that a multiverse of independent blockchains that cannot interoperate would be severely limited. Users of blockchain platforms will find it beneficial to be able to exchange data and make transactions between chains too: a healthcare chain connecting to an insurance chain, a real-estate chain connecting to a construction materials or manufacturing chain, and so on.”

If blockchain platforms are to be successful, they should be able to scale to meet the needs of their target audience, it added. The EU forum also expects blockchain technology to “become less energy-intensive over time.

”As for what will create successful large-scale blockchain projects, the report said teams will need “a clear vision” of what they want to achieve, “a clear reason” for using blockchain over traditional technologies, “strong governance structures” and “sharing of effort and expertise among diverse stakeholders.

”While Europe has been “very supportive” in the blockchain space, the authors said, there is “much still to be discovered and developed.” Therefore, the organization believes that “a light-touch approach, allowing for experimentation,” is the best way forward at present.

The authors write:

“Both the US and China have expressed strong support for blockchain research, with the former even going so far as to include it as part of its USD 700 billion defence budget. We therefore recommend that the EU continue its strong support, targeting both basic research as well as supporting implementation of infrastructure-related projects in particular, as well as research into non-technical topics such as governance of blockchain projects.”

The EU Blockchain Observatory and Forum was launched by the European Commission early last year with the aim of identifying key initiatives, monitoring developments and promoting common action in the area of blockchain technology.

The group expects to publish another blockchain report focused on issues of privacy and confidentiality in the second half of 2019. 


The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Bolsa de Madrid (BME), Spain’s largest stock exchange, said it expects to go live by year-end with a blockchain-based system for certifying collateral pledges after testing the technology.

The test “has shown a reduction in the total times of end-to-end processes exceeding 80 percent,” BME said Thursday, as well as the potential to radically improve the participants’ operational and risk management. 

The system allows market participants to avoid exchanging paper certificates and monitor the process in real time, the exchange said.

The proof of concept (PoC) was developed by BME’s own distributed ledger technology division DLT-Lab, in collaboration with regulators and other financial institutions, BME said, including BME subsidiary BME Clearing; the Spanish central securities depository IBERCLEAR; and investment bank Renta 4 Banco, which pledged collateral to cover customers’ positions.

“DLT technology allows us to reduce times drastically and improve the operation and control of the system, providing legal certainty for electronically generated certificates and maintaining privacy and compliance with the General Data Protection Regulation,” Berta Ares, head of digital transformation at BME, said in the press release.

Teresa Sánchez Alonso, head of IT systems at Renta 4 Banco, added that “this innovation project is aligned with the strategy of digitization, automation and continuous improvement of Renta 4 Banco’s customer service.

”This is not the first time BME has dipped its toe into the blockchain world: last summer it contributed to a joint pilot project of several Spanish banks named Fast Track Listing (FTL).

The pilot, testing blockchain tech for registering stock warrant issuances, also included institutions such as the Spanish National Securities Market Commission (CNMV), Banco Santander, BBVA, BNP Paribas, CaixaBank, Commerzbank and Société Générale.

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

In advance of Paris Blockchain Week taking place from April 13-19, BlockchianReporter sat down with co-founder of the event and board member of Chain Accelerator, Michael Amar.

Paris Blockchain Week is a series of events taking place under the joint High Patronage of the French Ministry for the Economy and Finance and the Secretary of State for Digital Affairs, culminating in the Paris Blockchain Week Summit, which will be held on April 16 and 17.

It will be the first international conference that will be held in France, dedicated to professionals in the blockchain and crypto-assets space boasts of attendees such as Bruno Le Maire, French Minister of the Economy and Finance and Wei Zhou, CFO of Binance.

Last year, France slashed the tax rate for cryptocurrencies and overall, seems to have become much more supportive of the blockchain industry in recent years.

What’s changed?

France is fortunate to have very forward-looking government officials. Even our president has noted the potential of blockchain technology to provide greater transparency to existing industries.

We also have numerous members of parliament, Jean-Michel Mis, Pierre Person, and Laure de La Raudière, for instance, that are pushing forward legislation to accelerate the development and adoption of the technology.

There is a sense of urgency from these officials. They are not only recognising the potential of blockchain and cryptocurrencies, but they are also pushing for the necessary changes to foster the right ecosystem.

Outside of parliament, we also see large French companies such as grocery chain Carrefour adopt the technology. Carrefour has successfully implemented DLT to track products from their farms to their stores, reducing the risk of health hazards such as Salmonella outbreaks.

Europe, for the most part, seems to be one of the most progressive places for Blockchain. Would you say that there is greater support for cryptocurrency specifically or just blockchain?

Europe is a place that strikes the right balance between innovation and consumer protection. Initiatives such as the EU Blockchain Forum have been set up by the European Parliament to not only progress the development and adoption of blockchain and DLT, but to make sure it progresses in a way that is safe for users.

Initiatives and discussion at the European Parliament level have mostly focused on blockchain technology.

But we see parliaments in specific European countries such as Malta and Estonia pass through legislation to make their country attractive to businesses dealing with cryptocurrency. The Maltese government passed three bills into legislation last year concerning both cryptocurrencies and blockchain.

As a result, we are seeing major cryptocurrency businesses such as Binance relocating to Malta. Overall, Europe is one of the most supportive places for businesses relating to cryptocurrency and to blockchain technology.

France has announced plans to spend about €500 million on blockchain over the next three years. In terms of long-term development, do you think Blockchain needs more of funding or positive legislation?

What blockchain requires is the development talent with the skills to work on blockchain and DLT projects. At the moment, there is intense competition for developers in other technology sectors.

We are currently seeing the banking industry and venture capitalist funded projects already securing the largest share of this talent that can build on blockchain and DLT.

The funding we see from France and others such as the €340 million EU fund will help secure more of this talent with the goal of building blockchain projects for various sectors.

Regardless of funding and legislation, the pool of talent with the skills to develop projects on blockchain will remain scarce in the near-term. However, in the longer-term outlook, funding and favourable legislation will help grow the pool of talent and will also attract more developers from other technology sectors to work on blockchain projects.

Paris Blockchain Week has attracted some very powerful names to its lineup. At the same time, a member of the European Central Bank executive recently referred to Bitcoin as the evil spawn of the financial crisis. Do you think events like this help to change the minds of those in high places?

We have seen Jamie Dimon, the CEO of JP Morgan, progress from labelling bitcoin a fraud to recently announcing that he plans to launch his own internal cryptocurrency built on DLT. Events such as Paris Blockchain Week help these sorts of change in mindsets take place.

These events educate executives and key enterprise players to make a difference. We hope to shine a light on what kind of benefits blockchain and DLT can offer, as well as which inefficiencies it can tackle. Let’s not give up on the European Central Bank executive just yet.

The different countries in Europe (naturally) have different policies regarding blockchain. Can the industry thrive that way or are organizations like ‘Blockchain for Europe’ needed to ensure uniformity, at least in the private sector?

Time will reveal whether different policies in different jurisdictions is the best approach for progressing development and adoption of blockchain technology. We will be delving into questions such as this at the conference and we will quickly learn which policies best suit the progression of the technology.

It certainly seems advantageous to jurisdictions such as China and Japan where unexpected changes in policy have resulted in businesses having to change location or shut down operations immediately.

Blockchain adoption in Europe is still in its early stages, and it’s still unknown what kind of long-term impact it will have on policies.

In the short-term, initiatives such as Paris Blockchain Week will facilitate further discussion regarding the technology and how it should be governed.

How has the bear market affected the progress rate of blockchain in Europe and France, specifically?

Prices are always an important point of interest for the general public, but the development of the technology continues to progress in Europe and France regardless. Prices are more of a concern to speculators than they are to the businesses and developers building on blockchain.

Projects do not need to launch their own cryptocurrency to apply blockchain or DLT; the power of blockchain lies in its real-world potential. However, the public often associates blockchain and crypto as one.

Hopefully, as more awareness is built around the capabilities of blockchain, people will see that the technology can be utilized for much more than digital currencies.Apart from investors suffering losses, bear markets can be a good thing.

They serve to get rid of some of the weaker projects from the market. Projects that started with weaker value propositions struggle to continue to fund project development and eventually have to shut down operations. Although this can cause pain in the short-term, it is a good thing for the overall health of the ecosystem in the long-term.

What can we look forward to at the summit?

The summit will cover several interesting topics that will showcase France as a leading tech and blockchain hub. Some of the panels will delve into discussions points specifically focused on certain aspects the technology, while others will delve into the broader ecosystem and how we can best facilitate the continued growth and adoption of this technology.

Matters such as regulation, including how France is spearheading blockchain regulation in Europe, and the role of corporates will all be important talking points.

The panels will consist of pioneers operating at the forefront of the blockchain industry. The biggest innovators in the industry will address the biggest questions within a growing ecosystem, which should make for a thought-provoking and entertaining event!

You can also look forward to lots of satellite events taking place around Paris for the entire week of the summit, organized by some of the biggest blockchain organisations in Paris. These events will include hackathons, dinners, parties, and much more.

The United States’s Securities and Exchange Commission has announced that it will hold a public forum on blockchain and crypto assets. The event is the second of its kind and will take place at the SEC Headquarters in Washington DC on May 31.

The forum is being held in conjunction with the SEC’s Strategic Hub for Innovation and Financial Technology (FinHub). It was first announced in October, when FinHub was initially launched.

Will the SEC Continue its Cautious Approach Towards Bitcoin and Crypto?

Thus far in terms of digital currency regulation, the planet’s largest and most influential financial regulator, the US SEC, has been reserved in its approach towards the crypto space.

With its cautious stance, the agency appears to be allowing the industry to evolve, rather than making any drastic regulatory moves that could hinder clear potential for innovation.In accordance with this, the SEC will hold its second forum dedicated to crypto and blockchain tech:

SEC_News✔@SEC_News

SEC staff to hold #Fintech Forum to discuss distributed ledger technology and digital assets http://ow.ly/UAaN30o3FZV 

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According to a press release from the financial regulatory body, the event being held at the end of May will feature a panel of digital currency experts and academics. The goal will be to promote greater communication and understanding between the industry’s various participants.

Amongst other areas covered by the forum, the following topics will be debated: ICOs, crypto asset platforms, and blockchain technology generally. The focus will be on how these various technologies will impact both investors and the market generally going forward.

As mentioned, the SEC forum is open to the public to attend. The agency will also broadcast the forum live online via its official website. More information about this and the panellists selected to represent the crypto and blockchain space will apparently become available in the coming weeks.

The announcement of the date of the second SEC forum on the cryptocurrency space comes just after after the agency announced that it would be going on a “crypto tour” to help influence the direction of whatever regulations are forthcoming.

The goal of the tour is to meet investors, influencers, and other crypto market participants. This should provide the SEC with a much clearer picture of how to proceed with policing the ever-growing industry.

Although the SEC is yet to truly reveal its hand with regards impending regulation of the digital asset space (aside from policing some of the more blatant scams associated with crypto), the fact that it is going to such great lengths to understand the industry is certainly encouraging.

Regulators clearly see potential within these disruptive technologies and are keen to avoid coming down hard on the ever-expanding space for fear that it may drive many of the startups based in the US overseas to more welcoming regulatory climates.

Ethereum (ETH) co-founder Joseph Lubin said that he expects the global economy will be 10 times larger in 10 to 20 years, when blockchain is fully ramified, and blockchain will be involved in most of it. Lubin made the statement at the SXSW conference in Austin on March 14.

During the same keynote, Lubin also pointed out that just as nowadays there aren’t many “normal” people using blockchain-based systems, “there weren’t a lot of ‘normal’ people firing email around in 1983.

”He also reiterated the promises of Ethereum 2.0, stating that there are a lot of inefficiencies present in Bitcoin (BTC) and the current version of Ethereum that Ethereum 2.0 won’t have:

“In Bitcoin and currently in Ethereum, you need to have specialized hardware, burn lots of electricity, waste lots of computation, to basically keep everybody in sync. [With Ethereum 2.0, in 18 months] we’ll have a blockchain system much more powerful and scalable that uses orders of magnitude less energy.”

As Cointelegraph recently reported, Lubin also said that blockchain technology and decentralization can benefit content creators and journalists.

The statements mentioned above are also in line with what Lubin said in November last year, when he told a New York Times interviewer that with blockchain, society will move “from a scarcity to an abundance mindset.”

The New York Times, the second-largest newspaper in the U.S. by circulation and a storied institution in American journalism, is getting ready to experiment with blockchain technology for publishing.

According to a job posting that appeared on the Times’ website Wednesday, the media organization is looking for someone to help “design a blockchain-based proof of concept for news publishers.

”To start the project, NYT is looking for a “forward-looking leader” who would be working on the proof-of-concept’s outline for 12 months within the company’s research and development division, according to the post, which was removed after this article was published.

The new hire “will codify the vision for the research project and share that vision with potential stakeholders at other media organizations” and “help brand and create a public identity and assets for the project.”Another goal will be to form a pool of the project’s stakeholders and find advisors from news organizations, academia and social media companies.





Screen shot of the New York Times job posting.

Skill set

The candidate should have previous experience innovating in media organizations and “leading a combination of engineers, designers, journalists” for more than eight years, according to the NYT job posting. Strong skills in communication, writing and presentation, partnerships and collaborations are necessary.

The new blockchain leader should also have an “established track record in real-world application of new technologies” and “a mixed skill set with some experience in at least three of: journalism, product, design, software development, hardware engineering, user research.

”No less important, the job requires “a real passion for The New York Times’s mission.”The NYT project wouldn’t be the first blockchain-media experiment. The most prominent of these is Civil, a token-driven startup backed by the ethereum development studio ConsenSys.

In its editorial operations, the New York Times has been covering the blockchain and cryptocurrency agenda for several years now, including the special project “Demystifying the Blockchain” last June. 

The newspaper’s lead reporter in blockchain and crypto, Nathaniel Popper, is also the author of the bestseller “Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money.

”The New York Times didn’t respond to CoinDesk’s request for comment by press time.


The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Ethereum‘s most recent fork was (eventually) successful, but it came with unintended consequence: the greater cryptocurrency community learned of its special “big, scary nodes,” and immediately freaked out.

Blockchain infrastructure provider BlockCypher recently posted its version of events leading up to (and directly following) last month’s Constantinople upgrade

 It details its quest to reboot a special, dedicated machine (archive node) used to record all the “states” (settings) Ethereum $ETH▼0.32% has taken in its history.At a high level, archive nodes store Ethereum snapshots. Not just a record of all the transactions processed, but a complete map of the entire blockchain each time a block is added. 

They are different to full nodes, which are just concerned with transactions, not states.According to BlockCypher’s blog, rebooting archive nodes is supremely difficult – so much so that literally nobody else is bothering to run them, which the company says could present a security risk.

After examining every which way we could think of to add the Trie state to our Ethereum state, we asked [Ethereum co-founder Vitalik Buterin] for assistance. His first comment to us was “oh, you’re one of the few running one of those big, scary nodes.” We asked him if he knew of anyone else running a “big, scary node” to see if we could possibly sync with them. He knew of no one, not even the Ethereum Foundation keeps a full archival copy of the Ethereum chain. We were back to square [one]: starting the full sync again, this time including the Trie state.

It then declared a lesson learned: BlockCypher might be the only ones keeping an “entire history of Ethereum transactions.” This might be a problem, especially in scenarios where the blockchain is under attack.But according to the Ethereum insiders Hard Fork spoke with, BlockCypher’s concerns don’t necessarily represent the true nature of the network, as archive nodes have no bearing on its overall security.

Archive nodes have ‘no impact on Ethereum’s security or trust model’

Ethereum‘s ecosystem relies on Infura, a ConsenSys-backed blockchain infrastructure firm. Participants pay Infura to run resource-intensive processes on their behalf, particularly associated with deploying apps on the network.

Infura co-founder E.G. Galano told Hard Fork that archive nodes are only necessary in certain circumstances. In particular, they are used to check the state of an Ethereum account at any given block height.

Other than that specific use, he claims there is no real need to keep them around. “For example, if you wanted to know the Ether balance an account had at block #4,000,000, you would need to run and query an archive node,” Galano explained.

“They are use case dependent and have no impact on the security or trust model of the blockchain. ”To be clear: Ethereum‘s archive nodes are not equivalent to full nodes. A full node stores transaction history. An archive node stores that, as well as additional data related to Ethereum‘s state.

Galano expressed that full nodes propagate the exact same information across Ethereum as archive nodes. In this case, the “archive label” simply means it computes and stores additional blockchain-derived data to query information more efficiently.

Martin Holst Swende, security team lead for the Ethereum Foundation, told Hard Fork that from a network perspective, archive nodes do not help network robustness any more than a full (or fast-synced) node. “It is full nodes that are the key to maintaining and synchronizing the Ethereum blockchain, including all transactions and state transitions,” said Swende.

“A ‘full node‘ is a node which has performed a fast-sync or a so-called full-sync. If the node additionally stores a snapshot of each state at every block, then it is commonly referred to as an ‘archive node.

'”He then confirmed the three types of Ethereum nodes (fast-sync, full-sync, and archive) all keep the required data necessary to replay (or restore) all chain events, not just archive nodes.

The only data stored by archive nodes (and not by the others) is the full history of Ethereum states, which can be derived using data stored in other nodes anyway.

OK – but who is running archive nodes? Is anybody?

Hard Fork spoke with Parity Technologies, a startup building Ethereum infrastructure, to confirm how prevalent Ethereum’s archive nodes really are.Just like Infura and the Ethereum Foundation, Parity’s technology chief Fredrik Harrysson isn’t quite convinced of BlockCypher’s claims.

“It is certainly not true that there is only one node with a full record of Ethereum’s transaction history, we usually have an archive node running in-house at [Parity], although there is really no need for one,” said Harrysson.Infura’s Galano sided with Harrysson.

“BlockCypher is not the only one running archive nodes. We run many, as do other API and infrastructure providers,” he told Hard Fork. “I don’t know the number that the Ethereum Foundation runs, but they at least run a few for their own use.

”The Ethereum Foundation, too, told Hard Fork it maintains multiple archive nodes, despite how unnecessary they may be. 

“At the current moment, we’re running three pairs of benchmarks (six machines), two on fast-sync, two on full-sync and two on archive-mode,” said Swende.

If you want to talk security, full nodes are what matter

The crux of BlockCypher’s blog was that it took more than two weeks to ‘reboot’ their version of Ethereum stored by their archive node. It also emphasized Ethereum‘s “state” is very different to other blockchains, in that it cannot be restored using any traditional backup method.

Galano suggested BlockCypher’s issue was a lack of solid backup and restore procedure. He said the correct process involves creating a backup and a copy, later using that copy to restore state. This, he insisted, should have preserved the integrity of the original “backup.

”“Everyone makes mistakes and we ran into similar issues earlier in the life of Infura. My issue with that blog post is not that it says running an archive node is resource intensive, it is,” Galano admitted.

“My issue is that if you are trusted to run infrastructure as a service and issue a post-mortem, take responsibility for your failures and don’t blame the protocol that your users expect you to understand better than they do.

”The total number of full nodes is essentially what matters for Ethereum, not its archive node count. Current numbers indicate the network consists of almost 12,000 full nodes.

“A reasonable lower-bounded number of nodes required is debatable – essentially if one trusted party had and served all the history it would be fine, but we’d be relying on a centralised party not disappearing, which thankfully is not the case here,” concluded Harrysson.

Archive nodes might not be considered strict requirements for Ethereum to operate securely, but as it turns out, they aren’t as rare as they seem, even despite their apparent lack of utility.

Did you know? Hard Fork has its own stage at TNW2019, our tech conference in Amsterdam. Check it out.

Social Alpha Foundation grant will fund decentralized carbon tracking

By Jalen Fargharson 

 Yale openlab, the university’s incubator for disruptive new technology, has just received a $150K grant from Social Alpha Foundation,to develop decentralized carbon emissions tracking tool.

Yale University, which has recently been expanding its use of distributed ledger technology, will execute the project between two of its branches: the Tsai Center for Innovative Thinking at Yale, and the Yale Center for Business and the Environment. 

According to the university’s experts, the scale and rate of climate change is moving at which the present models of mitigation are insufficient. That’s where decentralized tech comes in to streamline the process.  Regarding the joint initiative, Martin Wainstein, PhD, founder of the Yale openlab and Innovator-in-Residence at the Tsai Center for Innovative Thinking at Yale, said:

“At present, if emissions continue to be left unchecked, our limited carbon budget could be consumed in as little as 15 years. This challenge requires people and organisations to collaborate at an unprecedented scale, and reimagine traditional business models and paradigms.”

Social Alpha Foundation’s grant will support two of Yale openlab’s main priorities. First, it will help grow blockchain-based skill development programs for its members, such as ‘blockchain bootcamps.

’Second, it will aid the launch of the project’s main initiative: the ‘Open Earth Challenge,’ which seeks to leverage blockchain technology to build a decentralized consensus on the earth’s carbon budget.International trust between systems is another obstacle preventing global collaboration on climate change projects, which Yale openlab intends to tackle.

Wainstein continued:

“The Paris climate agreement has set the world on a path to zero emissions by 2050, but we lack the global tools that can help us track our environmental actions in a trustless and competitive world. We believe a constellation of blockchain technology, data oracles, and internet-connected sensors under open source protocols and standards may provide the fabric for globally trusted procedures to emerge.”

Through projects like Yale openlab’s Open Earth Challenge, decentralized, trustworthy networks agnostic of any national affiliations could eventually become the norm, and bring about a true globalization not only of financial systems, but of digital systems on the whole.

Smart cities and opportunities that digital transformation and IoT technologies offer can help to improve the quality of life in urban cities.

However, this “smart” urban landscape, with numerous connected devices and vast communication network, opens up a whole new set of security challenges—challenges that cannot be addressed by the existing conventional cybersecurity solutions.

Below we explore the potential of blockchain technology to provide robust scalable solutions and secure large-scale smart cities’ networks from cyber attacks.

The Next-gen Solutions

IoT-powered smart cities consist of several users and numerous different kinds of devices – big and small, enterprise and consumer - connected to central systems and one another.

Not only this, unlike traditional network perimeters consisting of a fixed number of devices, smart city networks are ever expanding and hence require security solutions that can be just as scalable without compromising on quality or efficiency. And that’s where blockchain and other emerging technologies come in.

The technology attributed to the success of cryptocurrencies offers significant potential in securing the millions and billions of connected devices and an ever-growing smart city network.

The cryptographically secure, decentralized and consensus-driven blockchain technology can be used to secure not only end users’ identity, connected devices and critical infrastructure but also offers secure communication and transmission of data across the network.

This, along with other emerging technologies, SDP architecture and approaches including the zero-trust model, offer unique opportunities to secure smart cities in bold new ways.

Digital IDs for all and everything: Assigning blockchain-based digital smart IDs can help securely identify, authenticate and authorize each and every resident as well as every one of the connected devices within a smart city network. These IDs are unique and difficult to tamper with, spoof or clone.

The Smart ID can be used to authenticate oneself and access various services as well as to securely link, store, share and authorize the use of personal information by relevant agencies and service providers.

By its very nature, blockchain is cryptographically secure, helping ensure that all information stored as well as passed around within the network remains encrypted and protected from attempts to compromise it.

Scalability to protect an ever-expanding network of users and devices: Owing to its decentralized nature, a blockchain-powered system effectively removes single points of failure that can be taken down or compromised in a cyber attack.

This feature makes such a solution highly robust while the multi node-based system provides a scalable solution for the ever-widening smart city perimeter. It allows for ease in scaling up and down as large number of users and various kinds of devices are added to or leave the network, without compromising on the efficiency of the security.

Locked down critical infrastructure and isolation of infected devices: Additionally, leveraging software-defined perimeter and a zero-trust security model allow such a solution to ring-fence and render critical infrastructure invisible, ensuring vital utilities are secure while isolating and immediately addressing any potential threats to the system.

Software-defined perimeter architecture can be used to render critical infrastructure in smart cities invisible, by ring-fencing them and only permitting recognized devices visibility and access to these resources. This provides an additional layer of security and prevents the risk of external threats. 

The Zero Trust model provides micro-segmentation, allowing for compromised user IDs and infected devices to be quickly isolated from the network and acted upon independently.

Tamper-proof logs record all activity, preventing any attack from going undetected: One of the most powerful attributes of blockchain—the provision to record all access and communication within the network in tamper-proof logs makes it impossible for any potential attackers to hide or erase their attempts to access or misuse information within such a secure smart city network.

The instant visibility ensures that any successful unauthorized attempt is recognized, the infected device can be taken offline and its access to other connected devices in the network can be disabled, preventing further escalation of the cyber attack. 

With ever-growing population migrating to urban cities in developed and emerging economies of the world, digital transformation is the only way forward in ensuring that cities’ infrastructure can keep up with the rising demand of its residents.

The opportunities on offer are immense, but cybersecurity is a pertinent threat that needs to be addressed before large scale rollout of smart city programs can be undertaken.

These digital initiatives will require significant investment and effort as well as modern approaches towards security in order to realize their true potential and ensure mainstream adoption.

Emerging technologies, models and methods offer opportunities to secure smart cities in bold new ways. Fortifying connected devices, critical infrastructure and complex networks with truly next-gen security systems will help minimize risk and ensure smart city programs realize their potential in the real world as a viable solution to tackle growing urbanization.

To know the role of blockchain technology in securing smart cities, read here.