Gary Gensler, now a lecturer at MIT, says some popular cryptocurrencies should be regulated as securities.

• by Mike Orcutt
•  
• 
  
  More than 100 cryptocurrency exchanges and over 1,000 initial coin offerings are operating outside US laws meant to protect investors from fraud, says Gary Gensler, who chaired the Commodity Futures Trading Commission from 2009 to 2014. This must end before some of the most promising financial applications of blockchains can be realized, Gensler—now a lecturer at MIT and senior advisor to MIT’s Digital Currency Initiative—told the audience today at MIT Technology Review’s Business of Blockchain conference.

Even popular cryptocurrencies XRP and Ether might be securities and thus subject to relatively strict regulation, he said.
More than $10 billion has been raised via ICOs, a blockchain-based fund-raising method. But a significant fraction of these are fraudulent, and many were launched in a way that is not compliant with US securities laws established in the 1930s.

To reach its full potential “blockchain technology will need to come within the public policy framework,” Gensler said. “We’re not in very good shape right now.”Blockchain technology has a chance to lower costs, lower risks, and remove unnecessary middlemen in the global financial system, said Gensler, but “the question is: how do we move forward?

” First, what’s needed is a lot more clarity in the marketplace, he said. Regulators across the globe are scrambling to make sense of ICOs, trying to determine whether they are traditional investments like stocks and bonds—or something else that shouldn’t be subject to securities rules.

In fact, in many cases the answer is that they are both, said Gensler. If investors are buying tokens with the expectation that they will appreciate in value based on the efforts of others, that matches the traditional legal definition of a security, he said.

Related Story



What the Hell Is an Initial Coin Offering?

The ICO boom looks a lot like a bubble, but at its heart is a genuine innovation.That could spell trouble ahead for Ripple's crypto-token, called XRP. That’s because the company has so much control over XRP’s monetary policy, and because many XRP holders are hoping the token will increase in value thanks to the efforts of the company’s developers, he said.

Ethereum, the second most popular cryptocurrency network after Bitcoin, may also be a security, said Gensler, since its token was first sold in 2014, before the network actually launched. (Bitcoin, he said, does not have the features of a security.)

There are now a number of open questions for the SEC, said Gensler. Is it possible to design a so-called “utility token” that is solely about consumption, as opposed to investment? If developers sell tokens before a network launches, as a security, can it “evolve” into something other than a security after the network launches?

Cryptocurrency challenges the traditional definition of a security, and some rules may have to be “tailored” in some way, he said—“but I don’t think it means that we just exempt the whole field and say good luck to investors.”

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Tagged
Ethereum, Ripple, Business of Blockchain 2018, blockchain, regulation,cryptocurrency






Mike Orcutt Associate EditorI’m an associate editor at MIT Technology Review, focusing on the world of cryptocurrencies and blockchains. My reporting, which includes a twice-weekly, blockchain-focused email newsletter, Chain Letter… More

JPMorgan Chase is sending signals that its homegrown blockchain, Quorum, is alive and well despite a recent shake-up and rumors it will be spun off altogether.On Friday, JPMorgan Chase publicly tested a new application it created on Quorum to handle finance instruments.

It phantom-issued a $150 million, one-year, floating-rate Yankee certificate of deposit on the blockchain, in parallel with the actual issuance of the CD. Investors in the CD included Goldman Sachs Asset Management, Pfizer and Western Asset.



The bank said the trial proves its blockchain technology can handle financial instruments of all kinds.“Overall, the promise of blockchain is that you’re sharing infrastructure between participants — so issuer, dealer, investors, custodians and administrators can all see one golden source of truth of a trade or in this case a debt instrument,” said Christine Moy, program lead for JPMorgan Chase’s Blockchain Center of Excellence.

“And being able to trust that golden source and then correspondingly, not having to spend as many resources reconciling deal terms, tracking and tracing wires, or agreeing on interest rate calculations.”

In other words, the ability to do deals with more certainty and less cost.In October, JPMorgan announced that it would be using Quorum to build an interbank payments platform alongside Australia and New Zealand Banking Group and the Royal Bank of Canada.

Spinning off?

The test follows reports In late March, based on anonymous sources, that claimed JPMorgan was planning to spin off its blockchain group. In a move that seemed to support the rumors, Amber Baldet, who was the public face of Quorum, oversaw its construction and led the bank's Blockchain Center of Excellence, left in April to start her own business.

Baldet did not respond to a request for comment. Her Twitter account simply says “unemployed.”Chase doesn’t deny the selloff rumors, but suggests that it might spin off only a group that would be dedicated to providing technical support to the external companies that use the distributed ledger technology, while remaining committed to using Quorum within the bank.

Friday's CD test would seem to prove the point, though it's possible it was in the works for several months.In addition to the trial last week, in October, the bank launched a new interbank payments platform powered by Quorum, along with partners ANZ and Royal Bank of Canada.

The bank said the new system, which is still under development, would decrease the time and costs associated with resolving payment delays.

Quorum for Wall Street

Yankee CDs are a way for foreign banks to raise capital from American investors. To issue a Yankee CD, a Canadian bank needs to partner with an American bank to issue CDs denominated in U.S. dollars in the U.S.To help National Bank of Canada issue its CD on a blockchain, Chase had to turn Quorum into a platform for issuing and managing financial instruments.

Quorum is a permissioned version of the Ethereum blockchain that has private smart contract execution, a software enclave and a key distribution system.To make Quorum CD-ready, the bank wrote smart contracts that could handle the offering, framing and structuring of the deal; the distribution, order management and order book filling; the settlement and the ability to automatically calculate quarterly interest payments and return cash back to the investors.

“In the existing financial instrument life cycle, it is a siloed process: one technology handles the originations, then another system handles distribution and settlement elsewhere, while post-trade interest payment and asset servicing are somewhere else,” Moy said.

“The platform we built has the potential to automate and handle most of the financial instrument through its entire life cycle.”There are some manual stages, for instance when investors have to confirm orders or the issuer has to confirm the structure of the deal.

But many aspects of issuing the debt are “set it and forget it” because recurring activities are automated by the smart contracts. So interest payments can automatically be paid, eliminating manual handling, wires being passed back and forth between parties and different parties having to reconcile books with each other.

At National Bank of Canada, David Furlong, senior vice president of artificial intelligence, venture capital and blockchain, said the experiment is viewed as an opportunity to learn about the legal, regulatory, system and ecosystem impacts of using blockchain technology.

“What skills do we need as an organization, what changes in how we interact with our partners and potential purchasers or clients?” Furlong said. “Learning for this helps strengthen a great deal our understanding of the road map going forward of other assets over the long haul.

”The Canadian bank also seemed pleased at the opportunity to work with one of its largest trading partners.“I can’t overstate how much having JPMorgan as a partner was a decision factor” to running this test on Quorum, Furlong said.

National Bank of Canada’s overall hope for blockchain technology is that it will enable it to revamp its processes to become more efficient, providing a better, “frictionless” experience for clients and staff, he said.

When will blockchains become real in financial services?

A common complaint in the financial services industry is that there are many proofs of concepts and tests of blockchain technology, but not much going on in production and at scale.

Moy noted that building technology takes time and banks have to be cautious with it.

“If you think about it from the perspective of a global bank with a large number of clients, being a highly regulated entity, working in systemically important financial markets and having a reputation to uphold, we have to be extremely responsible and careful about the technology we build, making sure that it’s enterprise grade, safe, secure, cybersecurity tested and resilient,” she said.

“All of that takes time and that is something we are all hands on deck and full-steam ahead working towards.

”Editor at Large Penny Crosman welcomes feedback at penny.crosman@sourcemedia.com.

Penny Crosman

Penny Crosman is Editor at Large at American Banker.

Disruption is a word that gets bandied about a lot, especially in the tech scene. Add ‘blockchain’ and the hype reaches cosmic proportions. Is it justified, though? In a word — yes.

Since the invention of blockchain in 2008, technologists have been exploring how this new technology may disrupt and improve the way traditional industries operate.

Momentum in this space has grown rapidly over the last two years, with much attention given to the application of blockchain in payment solutions, supply chain technologies and data storage. Yet, only recently has the real estate industry been targeted, which is perplexing, since it is an archetypal sector ripe for disruption.

Costly, time consuming, cumbersome, highly complex, confusing, fragmented and at the mercy of entities which are themselves stuck in an archaic way of operating, where the customer is seldom the primary focus. Everyone, whether renting or buying, usually ends up feeling like they’ve paid a premium for the privilege of bad service and not receiving value for money.

Once those lucky few do get on the ladder — and good luck if you are a millennial — they will find that the market is highly illiquid. Not only is there a hefty time delay, there are all sorts of conveyance and hidden fees.

Unless you’re very wealthy, building a property portfolio diversified across different cities or even countries, especially as a young professional, is impossible. This means there is a huge potential market who would like to be involved in real-estate but do not have the tools or initial finance to secure a whole property and therefore have held off from participating.

Disruption is all about taking a complex, costly thing and simplifying it through technology. Landlords are also faced with a large number of cumbersome problems that the latest generation of start-ups are looking to tackle; management is pain.

There’s the inconvenience, and cost, of sourcing tenants as well as income being at risk if the rent isn’t paid, collected, and reported in an efficient, timely manner that also complies with all the taxation regulation. Maintenance can be costly, both in terms of money as well as time.

Blockchain has the potential to totally disrupt this market by tackling most, if not all, of the problems associated with owning, renting, transacting, and investing in property.

The point of this article is not to delve into the technicalities of how this breakthrough in the web’s evolution works, but rather to make readers aware of the potential for revolutionizing, and indeed, democratizing a sector that relatively few could freely access before.

Start-ups like treehouse are using blockchain to ‘tokenize’ real-estate making it available to everyone. Tokenization is just the process of creating a blockchain based identity and digital asset that is directly linked to the physical asset. 

What this means is that people can access the benefits of property ownership (rental income and capital gains), without the need to own the full property, but based on a share of the property that they can afford, be it a small or large sum.

Add to this the transparency and absolute, immutable security offered by blockchain, as well as the ability to trade these tokens and something resembling a traditional stock market emerges. Individuals can build up portfolios with tokens in properties all over the globe; and all with a few simple clicks, while receiving the benefits one would traditionally expect from property ownership.

Not only is this simplifying a complex and time-consuming process, it makes real estate accessible for a community who would otherwise have to wait years before they could afford the high cost of entry into the market. as well as solving the liquidity problem many would have with property.

The property doesn’t have to sell outright, only one’s property share (the property’s unique token).This is precisely what disruption is about, and what blockchain can bring. The work done by start-ups like Propy, ProofSuite, LA Token are building on this for various assets and the likes of treehouse is doing it for property.

And this is why blockchain should change the way you look at property investment. Raz Iordache is Founder of treehouse. Sponsored posts are content produced by a company that is either paying for the post or has a business relationship with VentureBeat, and they’re always clearly marked.

Content produced by our editorial team is never influenced by advertisers or sponsors in any way. For more information, contact sales@venturebeat.com.

https://venturebeat.com/2018/04/23/why-blockchain-should-change-the-way-you-look-at-property-investm...

Leigh Cuen    
Regulation: It's good for you, but it's going to hurt.That seemed to be the main takeaway for the cryptocurrency industry from Monday's Business of Blockchain conference at the Massachusetts Institute of Technology (MIT).

On the one hand, the event was clouded by speculation that the U.S. Securities and Exchange Commission (SEC) may go as far as to classify two of the top three coins by market cap, ethereum and Ripple's XRP, as securities. 

Such a determination could subject a wide swath of industry members to legal penalties - far beyond the promoters of recent initial coin offerings (ICOs) who were already on alert the last few months.

Those fears were reinforced late in the day when Gary Gensler, an old lion of financial services regulation, confirmed for the crowd that in his view, bitcoin's two largest rivals may fit the description of securities in U.S. law.

"Ripple Labs sure seems like a common enterprise, or the Ethereum Foundation in 2014," said Gensler, a former chairman of the Commodity Futures Trading Commission. "Ripple is doing a lot to advance the value of XRP." (The so-called Howey test says something is a security under U.S. law if it is an investment in a "common enterprise" offering an expectation of profits from the efforts of others.) Yet, on the other hand, the general sentiment at the event was optimistic about regulators' growing involvement in the space.

Neha Narula, director of the Digital Currency Initiative at MIT Media Lab, for example, told CoinDesk insufficient regulation can actually stifle innovation by deterring honest players because rampant scammers undermine market integrity.

And aligning with Gensler, Narula said, there need to be more honest conversations about the fact that many emerging cryptocurrencies are actually securities.However, there may not be a bright line separating the two.As Narula said:  

"We're realizing money versus equity isn't a binary choice. It's a spectrum."

Coming pain

And that realization could have a serious impact on the cryptocurrency industry.Patrick Murck, counsel at Cooley LLP and fellow at Harvard's Berkman Klein Center for Internet & Society, told CoinDesk the token economy could be on the verge of a dramatic shift if the SEC agrees with Gensler.

If ether and XRP are deemed securities, cryptocurrency exchanges and general industry promoters or foundations, or anyone who sold or evangelized projects like ethereum to the general public, could be subject to legal penalties."It would be like shooting fish in a barrel," Murck said, adding:

"There's nothing magical about the blockchain that absolves you from investor protection regulations if investors have to trust you to deliver something."

Driving that point home, Gensler in his talk cited several reasons that the way ethereum and XRP were issued and traded seemed to meet the definition of securities.For example, the 2014 ethereum crowdsale would have created an expectation of profit for the people who purchased tokens before the network went live.

"The Ethereum Foundation offering had a 50 percent appreciation right in the first 42 days written into the offering," Gensler said on stage. (The industry think tank Coin Center in Washington, D.C. promptly issued a statement that "ether is not a security," rebutting Gensler's argument.) Meanwhile, for issuers of new tokens, it's almost impossible to walk the line, even with more feedback from regulators and lawyers.

For example, so-called airdrops, once viewed as a way to avoid breaking securities laws by simply sending free tokens to people who already have some type of cryptocurrency wallet, are instead creating a damned-if-you-do, damned-if-you-don't situation.If issuers fail to collect information about recipients of airdrops, they may inadvertently violate international sanctions (what if that wallet belongs to someone in Iran?).

On the other hand, if they do collect such information, the airdrop may start to look like an investment in regulators' eyes, according to Murck."The SEC has interpreted the first prong of the Howey Test broadly," Murck told CoinDesk. "The collection of information may be enough to fit the first prong" - pegging an airdrop as "an investment of money."

Long-term gain?

Even so, Murck joined others at the conference in welcoming regulators' participation in the space."They're becoming a part of our blockchain community and that's a valuable thing," Murck said.Part of the value is clearing up uncertainty.

The shortage of such clarity was illustrated during a talk by Kathleen Breitman, a co-founder of the Tezos project.When asked whether securities regulations apply to her project's tokens, Tezzies, she responded:

"I don't know. I don't mean to play coy, I'm not just an attorney...I would recommend token holders comply with relevant laws."

But Gensler said legal clarity is slowly emerging in this red-hot market."If you do an issuance now, in April 2018, do it under U.S. securities laws," said Gensler, who is now a senior lecturer at the MIT Sloan School of Management, "It's better to bring it into a public policy framework, even if there's a little bit of a chill.

"And perhaps some cooling off would be healthy. MIT's Narula said she is deeply concerned about the lack of due diligence completed for many, if not most, cryptocurrency projects. Just because the code is open source doesn't mean that knowledgeable people have evaluated it.  "A lot of investors don't know that. They go by signaling," Narula said.

"A lot of projects have had some pretty fundamental flaws that were exposed only after a project launched."If nothing else, the excited chatter in the halls of MIT suggested that regulatory encroachment has yet to put a damper on the energy being channeled into blockchain tech.

Amber Baldet, the former JPMorgan Chase blockchain expert, said what makes her optimistic about the space, writ large, isn't skyrocketing coin prices or even regulatory clarity on the horizon. It's the explosive growth of this community in the wake of the 2017 boom.

"In order to have an internet of value, people are going to have to interact with each other," Baldet said, speaking to the need for an ecosystem that includes everyone from enterprises like her former employer to accredited investors to retail investors.She concluded:

"You meet thousands of people tackling these challenges in unique ways."

Image via Annaliese Milano for CoinDesk.

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.

The last week has been a good one for Bitcoin, with the price rising more than 10% according to CoinMarketCap data. Since the beginning of the month Bitcoin is up some 27%.

Following last week's strong gains Bitcoin has been hovering under the $9,000 mark but has recently been under pressure due to tax-related selling ahead of the U.S. tax deadline last week.

The threat of increased regulation is still a dark cloud hanging over Bitcoin sentiment, however, with many fearful the U.S. Securities and Exchange Commission (SEC) is about to crack down on initial coin offering (ICO) issuers.

"Bitcoin's price has shown resilience multiples times this year when it has dropped below $7k, even in the wake of negative events such as India’s recent ban on banks engaging in cryptocurrency-related activity, Mt Gox trustee sales, and tax-related selling," said Garrick Hileman, cofounder of the cryptocurrency data and research firm Mosaic.io.

"Positive drivers include reports that major financial institutions, such as Barclays, are getting more serious about entering the crypto space," Hileman added.

In March the trustee overseeing the bankruptcy of the defunct Mt. Gox cryptocurrency exchange denied being behind the 2018 sell off after it emerged he had sold $400 million of Mt. Gox's Bitcoin since last September.

Meanwhile, one of the world's biggest bitcoin exchanges, Coinbase, struck a deal allowing it to open a bank account with Britain’s Barclays.

Despite similar moves to make Bitcoin and other cryptocurrency trading more legitimate there have been as many set backs as advances.

Regulators around the world — many in Asia where cypto trading has exploded in recent years — have shut down exchanges and cryptocurrency services due to fears they are being used by criminals to launder money.

In February British banks Lloyds and Virgin Money said they would ban credit card customers from buying cryptocurrencies.However, Hileman expects the biggest regulatory hurdle this year for Bitcoin is still to come.

"The regulatory shoe that everyone is waiting to see drop is definitive guidance from the SEC on whether a significant number of crypto tokens are securities and have been sold through illegal ICOs," Hileman said. "It has been rumoured that this guidance is coming soon.

It is unclear which way the SEC will rule, and there is a real risk that the crypto market sells-off if an adverse ruling is delivered.

”The Bitcoin price surged above $19,000 in December last year, a gain of 2,000% on its December 2016 price but has since lost roughly two-thirds of its value given worries about regulatory crackdowns.

"Over the past few months, Bitcoin has lost nearly three quarters of it's value and finally reached a level more in line with it's long-term trend. Now traders are seeing a lot of value across the board and starting to get back in. The market may have slumped this year, but crypto technologies have quietly continued to improve in the background.

Bitcoin Cash (the popular Bitcoin alternative) has already more than doubled in price this month," said Glen Goodman, Bitcoin analyst and author of forthcoming book The Crypto Trader.Goodman added:

I think it's still a bit early to declare the dawn of a new bull market, but we're seeing more optimism in the crypto community than we've seen in months.

Meanwhile, many expect increased regulation — as long as it's the right kind of regulation — and a wider user based to mean less volatility for Bitcoin and other cryptocurrencies.

"A more affable attitude from regulators is on the cards as cryptocurrency is being looked at in terms of what it can do," said Charles Hayter founder, and CEO of the cryptocurrency data analysis firm Crypto Compare.

"The price is specifically sensitive to herd behaviour in its nascent form but in the long term will see volatility decline. "According to Coinmap.org — a site which records merchants who accept cryptocurrencies — there are now over 12,000 business taking Bitcoin and other coins as payment, with much of that growth coming from east Asia and emerging markets.

"The end of result of having new entrants into the system last year is more users. More users means more demand to use Bitcoin and other coins and therefore more merchants adopting it," Hayter added.

Thanks for reading! 
You can follow me on Twitter @billybambrough and read my other Forbes posts here

The burgeoning world of crypto trading mainly exists on the margins of the established financial industry, but that could be changing: Around one in five institutional financial firms have plans to start buying and selling digital tokens within the next 12 months, according to a survey by Thomson Reuters.

Many of the firms that are looking to trade bitcoin, ethereum, ripple, and the like plan to do it soon. Of those that plan to get involved in 2018, around 70% intend to do it in three to six months, according to the survey of more than 400 Thomson Reuters users. The survey didn’t disclose which firms, or which kind of firms, participated.

Big institutions started to take notice of cryptoassets last year, and their interest crescendoed in the last few months of 2017 when bitcoin’s price reached a record of more than $19,000, said Sam Chadwick, director for financial and risk innovation at Thomson Reuters. The prices of bitcoin and other digital tokens have plunged since then:

Even so, crypto remains a popular topic among the institutional set. Chadwick said his conversations with clients suggest that hedge funds and other asset managers are looking more seriously at adding crypto to their portfolios.

And the bitcoin landing page—a screen on Thomson Reuters’ Eikon data terminal that shows bitcoin news and links—is the second-most trafficked landing page among all currencies, after the one for the euro.

https://qz.com/1259661/one-in-five-big-financial-institutions-are-getting-ready-to-trade-crypto/

Dr. Jemma Green 
CONTRIBUTOR 
Opinions expressed by Forbes Contributors are their own.


Mali Maeder

When recycling is too expensive, could blockchain present an opportunity?Unless you’ve been hiding under a rock, a long way from the sea, you can’t have escaped the attention plastic waste is getting.

Plastic microfibers, PET bottles and plastic build ups of all descriptions are making the news as we wake up to the damage the waste packaging is doing to our planet, the sea and polar ice.The newfound awareness of this is no coincidence, either.

We’ve been plunged into a low-level crisis about what to do with our plastic junk.And the reason? There are many, of course. But at the end of last year, China banned its importation of plastic waste. To date, China has banned twenty-four categories of waste as part of a crackdown cleaning up its environment and infamous Beijing haze.

And the figures are as eye-watering as the smog associated with it. China was taking in more than 30 million metric tonnes of waste from every corner of the globe including the EU and Australia.

About one million plastic PET bottles are sold each minute around the globe. As we know, these don’t naturally degrade very quickly. Somehow, they get into the food chain and become next year’s sushi.

Suddenly all the western waste exporters are scratching their heads wondering what they should be doing with their waste packaging. Some cities in Australia, such as Ipswich, simply gave up, deciding to send their plastic into landfill sites instead. Others are waiting nervously before following suit.

"Since China has closed its doors to our waste, the effective cost increases to councils are 400 and 500 per cent — it's just not feasible that councils can sustain those losses,” Local Government Association of Queensland chief executive Greg Hallam said of the decision.

They simply can’t afford to process the junk without the resource of China’s cheap facilities. For them, sustainability isn’t profitable. While on the surface it makes sense to do the right thing for our planet, it’s not making economic cents.

View image on Twitter




Queensland Greens✔@QldGreensRecycling too hard for Ipswich Council? What a load of rubbish.10:25 AM - Apr 19, 2018

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Today, Ipswich City Council temporarily reversed its decision to send recycling to landfill, in response to public outrage. But the search for a permanent solution to their waste woes continues.



Josh Bavas✔@JoshBavas

Just in: Ipswich City Council intends to reverse its decision to send recycling to landfill. It is seeking a short term contractor but wants residents to reduce the contamination rates.

6:55 AM - Apr 20, 201810See Josh Bavas's other Tweets
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The obvious fix would be to start charging some kind of levy for removing your household’s waste. If that sounds a little draconian, you might like to know that Switzerland has been doing this for years. In Switzerland, if you want to get rid of garbage you have to buy a taxed green bag for the purpose and put your garbage in there.

If you don’t buy the right bag, no one will take it away, so you’re in effect forced to pay for the removal of your garbage.You can’t simply fly tip your rubbish in a neighbor’s bin because they’re locked. So your waste costs you money, and the more waste you make the more you pay.

Can We Trust The Supply Chain?

Such a model might work inside the highly self-policed culture of Switzerland, but other countries might struggle to implement this.In less law-abiding and affluent countries it could go a different way. There’s always the risk that someone down the chain does exactly what we saw during the 2013 meat scandal.

Namely, they corrupt the supply chain process as a way of making an illicit profit. In this case, they take a paid-for rubbish bag, save the costs of expensive repossessing and dump a taxed bag in the nearest sea or lake. But as in many supply chain situations, blockchain could help make sure the chain doesn’t get broken in a nefarious way.

Someone could buy a numbered green bag with a serial number on it and scan it into an app on a smartphone. Blockchain systems would then wait to see if an authorized waste reprocessing is picking up the same numbers at the end of the journey.

The Future Of Waste

In this instance accountability may be the cure. Consider the origins of a plastic water bottle washed up on shore. As well as the manufacturer and other companies in the supply chain, this enables us to put pressure on consumers to do better. When that same plastic water bottle is produced, it’s assigned to the manufacturer and this information is stored on the blockchain.

Additionally, each bottle could have a QR code stamped onto it. This not only helps us identify the manufacturer, but who ends up buying it.Suddenly, when that plastic bottle inevitably washes up on a beach somewhere, we’ve got someone to point the finger at.

Making Sustainability Profitable

Supply chains aside, what if the blockchain is a tool we can use in order to make sustainability profitable? It’s not as far-fetched as it may seem. In fact, there are already many waste-reduction blockchain startups off the ground such as global recycling enterprise, Plastic Bank.

The company aims to reduce waste in developing countries, and is already functioning in Haiti, Peru, Colombia and the Philippines. When people are struggling to feed their families, it’s no wonder they’re not using their time to fight environmental degradation.

Plastic Bank works by rewarding those who bring plastics to bank recycling centres in exchange for blockchain-secured digital tokens, which can be used to purchase food or phone-charging units.

View image on Twitter


Schwarzkopf✔@schwarzkopf

Not all parents can send their children to school - #MillionChances and @PlasticBank offers women in Haiti a regular and fixed income to support their children!

https://www.henkel.com/press-and-media/press-releases-and-kits/2018-02-21-less-plastic-waste-more-chances-for-women/830120 …3:15 PM - Apr 19, 2018

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“Many people we work with in developing countries lack bank accounts,” Plastic Bank co-founder Shaun Frankson said.  “Dealing in cash can be dangerous for them because of corruption and crime. But almost everyone—even in disadvantaged areas—has a mobile phone that supports digital transactions.

”Meanwhile, the returned plastics are being purchased by companies and recycled into new consumer goods. The system is attractive to them because blockchain’s transparent nature means they can see where their investment goes.

“We’ve been inundated with demand for our solution,” Plastic Bank co-founder Shaun Frankson said.

“If we were using the old-school way of setting up teams and locations one by one, it would take far too long to stop the abundance of plastic making its way into our oceans. We need systems that can grow dynamically and handle billions of tons of collection from multiple locations at the same time.

”Of course setting up a system of this scale poses many logistical questions but it’s worth asking, as the rubbish piles up in various countries around the world, do we really have a choice?

Dr. Jemma Green is the Chair & Co-founder of PowerLedger.io and a researcher and speaker on the enterprise disruption caused by blockchain technology.

Disclosure: I own Bitcoin and POWR.

Several hundred people pack Chevron Auditorium for the Blockchain Career Fair, where companies sought engineers to work in the growing field, which, among other things, tracks cryptocurrrency.

UC Berkeley students clutching portfolios with printed resumes swarmed booths of some 40 companies seeking software engineers to work in blockchain, the decentralized digital ledger that has triggered a worldwide gold rush.

MOST POPULAR

Amid students in hoodies and backpacks and staid company representatives at Wednesday’s Blockchain Career Fair, Brenna Sparks stood out. The self-described porn star, who wore hot pants and a diaphanous tank top, sees herself as an ideal entrepreneurial user for cryptocurrency, the monetary systems enabled by blockchain.

Paypal, Google Wallet and traditional financial institutions refuse to process payments for adult entertainment; the few that will do so take commissions as high as 40 percent, she said.

“Blockchain is the future,” said Sparks, who has a video channel on adult site SpankChain, which uses virtual currency for payments. “I get all of my cut when I sell content or when people want to send money to me. As an adult performer, SpankChain is an awesome platform.

”SpankChain CEO Ameen Soleimani said he left a job as a payment expert at ConsenSys, a 470-person blockchain startup, to co-found the Venice Beach (Los Angeles County) company, seeing blockchain as a natural fit for X-rated material.

Besides hosting its own live-stream video channels where viewers give virtual tips to performers, SpankChain wants to provide blockchain payment processing for other adult-entertainment sites using ethereum virtual currency.“It’s a killer app for adult content to have a place to securely store money where it won’t be seized” by authorities, he said.

With 30 employees and $6.5 million it raised by selling its own digital tokens in an initial coin offering, SpankChain is seeking to expand; hence, its presence at the job fair.

“It’s hard finding people to work in blockchain,” Soleimani said. “And it’s hard finding people to work in porn. ”Porn aside, many companies at the job fair agreed that it is, indeed, hard to find people to work in the nascent field of blockchain, which has seen an explosion of interest in recent months — one of several since bitcoin was released in January 2009.

Besides underlying cryptocurrencies, blockchain is catching on in such disparate fields as banking, health care, poker, energy, supply chain, real estate and education.Corporate titans including JPMorgan Chase, Barclays, Bank of America, Merrill Lynch, IBM, Microsoft, Citigroup and Nasdaq have poured billions into building blockchain frameworks.

In December, Computerworld ranked knowledge of blockchain as the second-fastest-growing job skill and bitcoin cryptocurrency development the third-fastest. (Robotics was No. 1.) Blockchain developers in Silicon Valley, New York and Boston command a median $158,000 annual salary, about $18,000 more than general software developers, it said. Nationwide, blockchain developers make a median $130,000, compared with $105,000 for general software developers.


Photo: Carlos Avila Gonzalez / The Chronicle

Jazzwall Sharad (left) of Swarm talks with Mema Bamba during a Blockchain Career Fair at UC Berkeley.

At the job fair, Shiva Kintali, a former Princeton lecturer who started San Jose’s TrueShelf as a hobby, walked the floor to buttonhole attendees and ask whether they might want to work at his startup, which provides blockchain digital certificates and an adaptive learning platform.

Although several hundred students packed the fair, he said many would not be qualified.“There’s a huge scarcity of people to work in blockchain,” he said. “It helps if they have an undergraduate computer science degree. But the ratio of blockchain jobs to suitable talent is 14 to 1.”

Matthew Rosendin, who’s about to get his master’s degree in engineering, has already started a blockchain company called Polyledger. It helps investors create diversified portfolios in cryptocurrency and is in UC Berkeley’s Launch accelerator program. He came to the fair to network — and in case he needs to find a day job.

“There are a lot of amazing companies here,” he said. “They are a lot further along on their product road maps than the public realizes. They’re making real-world blockchain applications come to fruition.

”The blockchain gold rush arose so quickly that UC Berkeley has just one class dedicated to the technology, a graduate-level course for business, engineering and law students that started this semester. But that hasn’t stopped enthusiastic students.

Rustie Lin, a sophomore computer science major, is involved in the 90-person Blockchain at Berkeley club, and teaches Blockchain Fundamentals in a DeCal course, the university’s name for student-run classes that qualify for academic credit.

“We had 800 applicants for 200 slots,” he said. “Now we’re creating an online course so everyone can take it.”“When I joined the club, blockchain was still a niche,” he said.

“Then over the past couple of months, it blew up. Everywhere I go, people are talking about it.

”Carolyn Said is a San Francisco Chronicle staff writer. Email: csaid@sfchronicle.com Twitter: @csaid

Private blockchains, which allow only a preselected group of people to maintain the integrity of the ledger, can empower businesses to be more intuitive in the way they manage IoT devices.

Most businesses do not operate in silos, and have to abide by certain regulations or bodies of authority.

It’s not practical to reinvent every industry in the mould of Bitcoin, so permission-based ledgers may hold the key to scaling IoT sensibly, while all the while maintaining compliance with external structures.

Take agriculture for example. IoT is already helping to optimise supply chains and deliver smart logistics – tracking assets from a farmer’s field all the way to the shop floor through a web of connected sensors. Partnership with the blockchain, however, can take this one step further; guaranteeing food safety or ensuring the correct farm is given credit by hosting information on a living ledger.

See also: What should define an enterprise encryption strategy?

What’s more, farmers must abide to strict codes when it comes to what they can and cannot deliver to consumers, whether that be hygiene standards or conditions of livestock.In uploading a wealth of IoT data to private ledgers, a form of cryptographic auditing is ensured, broken down into simple inputs and outputs.

The joy of blockchain technology is that in coding the sensory data of machines directly onto the ledger, validity can be guaranteed from the first entry onward. In short, IoT and blockchain are self-reinforcing.

Preparing for the machines

Optimising current systems is one half of the story, preparing for the future remains the other. 68% predict we’ll see mass industry adoption of IoT within the next five years. One of the key battlegrounds is industrial IoT, and revolutionising how we manage supply chains and logistics.

IoT-enabled devices allow for real-time, predictive maintenance of machines, with the more devices connected to the network contributing to a smarter system. This, however, also raises threat levels, with each new connected device another potential entry point for attackers.

Connected devices have already altered the way businesses face up to security. There’s currently no uniform or overarching standard, so it’s up to individual businesses to take the lead.

See also: Servitisation: how technology is making service the new productFor those without the resources to design platforms with security in mind from the outset, it can often be an arduous task staying in control. Now imagine when AI becomes commonplace within manufacturing and the rate at which robots exchange data becomes exponential.

61 per cent expect robots to be a mainstay in IoT within a decade – private blockchains may just prevent future issues when interactions go beyond single-thread conversations and into multi-threaded ones between machines themselves.

Both IoT and blockchain technologies are here to stay. Their convergence is largely expected and the potential for them to benefit businesses is immeasurable.

On one hand, security concerns can be addressed by distributing information across the ledger; while on the other, IoT and blockchain can work together to disrupt many of the processes we have come to accept.

Private blockchains allow businesses to pick and choose the most favourable features of decentralised lists, and maintaining control in what is contributed to it at the same time.

The result, if managed correctly, could change the way we understand and utilise the IoT.

To download Canonical’s Defining IoT Business Models report, click here Sourced by Jamie Bennett, VP of Engineering, IoT and 

The ORS GROUP explains to us their expertise in delivering sophisticated AI-based optimisation software solutions to a large international client base, including how AI & blockchain will empower 1 billion entrepreneurs by 2040

In its simplest terms, a blockchain is a new means of structuring and distributing data. The technology enables financial companies and other institutions to create a digital ledger guarded by cryptography, which can be shared among participants during transactions.

This allows authorised participants to alter the ledger without awaiting approval from a central authority, often resulting in faster and more secure transaction that saves financial institutions time and money.

Since the mysterious origins of Bitcoin in 2009, numerous cryptocurrencies have been thrust upon the marketplace, allowing transactions to take place directly between users and can be exchanged – as regular currency can be – for goods and services.

So why is there such on-going hype around cryptocurrency and is it masking the power behind blockchain technology?

This year has commenced with a lot of turmoil in the cryptocurrency world. However, that has been necessary to preserve the long-term health of the market. Bitcoin is already amidst the throw of a turbulent year, with the recent ban on cryptocurrency advertising from the world’s biggest search engine Google and social media platform Facebook to proceed in June 2018.

There are also rumours that Twitter will soon follow suit. Despite the industry currently in overdrive, key observers of the blockchain say the technology is bound to not only survive but thrive.

The general outlook for blockchain in 2018 looks to be increasingly positive: Fiat service provider, Robinhood, of which over 1 million people have signed up for, announced their zero-fee crypto trading on February 22nd; March 15th saw the official release of Lightning Network’s first beta implementation for the Bitcoin mainnet, securing $2.5 million in seed funding; and one of the most important Polish cryptocurrency exchanges, Bitbay, has decided to add support for Ripple (XRP) and Infinity Economics Token (XIN), impulsing the internet of things (IoT) to the mass market. It is clear that the production of mass-market-focused products will finally be launching this year, making it a lot easier for the wider public to start building on and using the blockchain.

What does this imply about the future of work?

As widely proposed in recent news, the future is autonomous. We are already moving towards a workforce that could be purely operated with the combined use of artificial technology and robotics. The study of 46 countries and 800 occupations by the McKinsey Global Institute found that up to one-fifth of the global workforce will be affected by robot automation. 

According to the report, 39 to 73 million jobs may be eliminated by 2030 in the US alone, but about 20 million of those displaced workers may be able to easily transfer to other industries.But what if there was a way that the inevitable influx of automated workforces didn’t have to affect the world’s rate of human employability? What if there was a solution that could effectively convert the masses into fully equipped entrepreneurs, by applying one straightforward concept?

Meet the man on a mission to change the world, one entrepreneur at a time

President and Executive Chairman of ORS GROUP, a leading Artificial Intelligence software company, Fabio Zoffi is on an incredible mission to empower 1 billion small entrepreneurs by the year 2040.In the words of Fabio Zoffi: “The future doesn’t have to be dystopian.

”How will he do it?

By making the algorithms his company currently uses for the world’s largest companies (which until now have been extremely protected) available to small businesses and entrepreneurs by connecting them with the blockchain technology.

ORS GROUP’s innovative new concept of Hypersmart Contracts will provide the mechanism by which they will do this: connecting Artificial Intelligence and blockchain together to make use of big data and powerful algorithms for turning businesses of all sizes highly competitive on a global scale.

President Zoffi says: “We are creating a global community of like-minded developers, entrepreneurs and crypto enthusiasts, who want to embrace the new digital alphabet “ABC – AI, blockchain and cryptocurrency”, to create and successfully run a business in almost every possible industry sector.”

The power of algorithms

Founded in Italy, ORS GROUP is a leading global supplier of cross-industry software solutions for optimising and automating business processes. For over 20 years the company has delivered sophisticated solutions using proprietary Artificial Intelligence, machine learning and big data analytics algorithms.ORS GROUP’s large international client base includes that of Fortune 2000 enterprises and span industries including retail, energy, finance and manufacturing. ORS GROUP’s software solutions save their clients over $1 billion yearly.

Small entrepreneurs’ new digital alphabet empowering a global decentralised network – it’s easy as ABC

Imagine the possibility of a future decentralised network of small companies on a planetary scale, empowered by technologies which enable the “little guy” to put their big ideas into action and to be competitive against the “big boys”. For example:

A farmer living in a small village in Southeast Asia, running a family business that has carried on for generations.

In light of increasing competitive pressure from global farming companies and distributors, the farmer is now struggling to make the necessary business decisions needed to survive and thrive in his industry.

Thanks to ORS GROUP’s new digital alphabet, he would be given the power to successfully compete and grow his business:

Hypersmart contracts can act as intelligent connectors, which activate AI algorithms (off-chain) to solve complex efficiency/optimisation problems utilising data stored on-chain. They can also release instant crypto payments. Together, these technologies can lead to significant improvements in global value chains, which even small farmers can benefit from.

For example, algorithms can be used to predict crop yields and for dynamic price optimisation, blockchain can be used for providing transparency about the whole food chain and cryptocurrency used for receiving immediate payments. As an end result, small farmers can regain negotiating powers against distributors and compete globally.

Individual entrepreneurs will become empowered once they are provided with the technology to educate themselves, resulting in the establishment and growth of fully optimised and successful businesses.

ORS GROUP continues to dedicate itself to ensure that any entrepreneur with a dream will be able to compete on a global scale and in an autonomous world.

Please note: this is a commercial profile Fabio ZOFFI
President and Executive Chairman
ORS SA
info@orsgroup.io
orsgroup.io
ORS SA Twitter @ORS_Fabio
Dr. Zoffi Twitter @ORS_ICO

It’s somewhere between $20 and $800,000, according to economic theory and a night of drinking.

It took two economists one three-course meal and two bottles of wine to calculate the fair value of one Bitcoin: $200.

It took an extra day for them to realize they were one decimal place out: $20, they decided, was the right price for a virtual currency that was worth $1,200 a year ago, flirted with $20,000 in December, and is still around $8,000.

Setting aside the fortunes lost on it this year, Bitcoin, by their calculation, is still overvalued, to the tune of about 40,000 percent. The pair named this the Côtes du Rhône theory, after the wine they were drinking.

“It’s how we get our best ideas. It’s the lubricant,” says Savvas Savouri, a partner at a London hedge fund who shared drinking and thinking duties that night with Richard Jackman, professor emeritus at the London School of Economics. Their quest is one shared by the legions of traders, techies, online scribblers, and gamblers and grifters mesmerized by Bitcoin.

What’s the value of a cryptocurrency made of code with no country enforcing it, no central bank controlling it, and few places to spend it? Is it $2, $20,000, or $2 million? Can one try to grasp at rational analysis, or is this just the madness of crowds?

Answering this question isn’t easy: Buying Bitcoin won’t net you any cash flows, or any ownership of the blockchain technology underpinning it, or really anything much at all beyond the ability to spend or save it. Maybe that’s why Warren Buffett once said the idea that Bitcoin had “huge intrinsic value” was a “joke”—there’s no earnings potential that can be used to estimate its value.

But with $2 billion pumped into cryptocurrency hedge funds last year, there’s a lot of money betting the punchline is something other than zero. If Bitcoin is a currency, and currencies have value, surely some kind of stab—even in the dark—should be made at gauging its worth.

Writing on a tablecloth, Jackman and Savouri turned to the quantity theory of money. Formalized by Irving Fisher in 1911, with origins that go back to Copernicus’s work on the effects of debasing coinage, the theory holds that the price of money is linked to its supply and how often it’s used.

Here’s how it works.

By knowing a money’s total supply, its velocity—the rate at which people use each coin—and the amount of goods and services on which it’s spent, you should be able to calculate price.

Estimating Bitcoin’s supply at about 15 million coins (it’s currently a bit more), and assuming each one is used an average of about four times a year, led Jackman and Savouri to calculate that 60 million Bitcoin payments were supporting their assumed $1.2 billion worth of total U.S. dollar-denominated purchases.

Using the theory popularized by Fisher and his followers, you can—simplifying things somewhat—divide the $1.2 billion by the 60 million Bitcoin payments to get the price of Bitcoin in dollars. That’s $20.So far, so straightforward. It turns out, however, that when it comes to putting a price on Bitcoin, the same equation can yield many different answers.

In September, Dan Davies, an analyst at financial research firm Frontline Analysts Ltd., wrote up a “guesstimate” of Bitcoin’s value that he’d originally conducted in 2014 using—again—the quantity theory of money. He plugged in estimates for each variable and got about $600.On Dec. 10, Mark Kirker, a high school math teacher in California, published an analysis online using the same equation for the same purpose.

He concluded that Bitcoin should be way above then-current levels. He’s since revised the number. Contacted by Bloomberg, he says it could be $15,000.




How can something be worth $20, $600, and $15,000 within the same theory? One key reason stems from what we don’t know about cryptocurrencies rather than what we do know. We know Bitcoin’s maximum supply is 21 million, and we know the velocity of most commonly used currencies. We don’t know how widely Bitcoin will be adopted tomorrow, how frequently it will transact, or what it will be used for.

In Davies’s example, a guide to Bitcoin’s future potential was the illicit drugs market, an obvious home for more-or-less-untraceable digital cash. The United Nations has estimated this market at $120 billion. Plugging in that number helped Davies get to $600.

For Kirker, though, drugs and criminals are only part of the story. He imagines including the output of some developing countries where cryptocurrencies might have better takeup than traditional banking. But with so much up in the air, the equation starts to look less like algebra and more like alchemy.

Even in the non-Bitcoin world, the velocity of money and its price can fluctuate in ways not predicted by fundamental analysis. “I am not wholly surprised it doesn’t pin down a price target to within a factor of 100 either way,” Davies says.Some believe the cloud of confusion has to do with the simple fact that cryptocurrency is something entirely new—it needs a fresh school of economic thinking to go with it.

A quantity theory of cryptomoney, perhaps.John Pfeffer, formerly a partner at KKR & Co., has written several papers to this effect, arguing that technology is turning the centuries-old equation on its head. Bandwidth and computing resources are the fuel of cryptocurrencies, and they need their place in quantity theory, he argues.

His version of the equation imagines a world in which more powerful computers and faster connection speeds combine to lower the cost of maintaining a crypto-economy over time, while the same forces radically increase the availability and speed of its digital coins. There already exist hundreds of tokens other than Bitcoin, pointing to a world where digital currencies are, well, a dime a dozen.

In a future where cryptocurrencies become a form of economic resource (like fuel, water, or electricity) that’s computerized and commoditized, would anyone get rich from hoarding them in her trading account? No, says Pfeffer. In his view, the more widely used a particular brand of digital cash becomes, the higher the probability its value tends toward zero.

In quantity theory terms, cryptocoins’ velocity could go way, way up, while the cost of many services within the crypto-economy could go way, way down. Crypto could change the world and still leave a lot of people with worthless tokens.

Pfeffer dangles one hope in front of the Bitcoin faithful who dream of riches: the possibility there’s one cryptocurrency out there that will serve as a store of value for the digital world.

Like gold, a metal seen by investors as a haven in times of crisis or when the purchasing power of cash is eroding, whichever coin wins that crown will have a completely different use—and price—than the rest.

Applying this thinking to Bitcoin, Pfeffer explains, would yield a price target of $260,000 to $800,000.Such a value would be not too far off $1 million—where the frequently mocked, frizzy-haired self-help guru James Altucher expects Bitcoin to be in 2020.

Software entrepreneur John McAfee has said it will hit $500,000. “If not, I will eat my d--- on national television,” he tweeted. He later doubled his target price. Pfeffer has been more careful than most in warning of significant risk of investment loss. “This could all go substantially to zero for various reasons,” he wrote in December.

Putting a price on Bitcoin is therefore less about crunching numbers and more about deciding just what it is and what it could be, if anything. That’s appetizing for risk-hungry optimists in the venture capital world, who are accustomed to their investments turning into big hits or big flops.

Ride-hailing service Uber Technologies Inc., for example, has lost an eye-watering amount of money, yet it’s one of the most highly valued companies in the world. It’s a bet that more traditional investors would have difficulty justifying using traditional metrics. But it also means science and snake oil sit side by side.

Quantity theory is one example of how an equation can be remodeled to fit different scenarios or different wishes about where the price will land. And it’s not the only one: Network adoption, the cost curve of Bitcoin mining, and transaction volumes have all been bundled into marketable literature advising traders and investors on what to buy. It’s a thick numbers soup. At least Uber has financial accounts to review.

Those with long memories also remember the quantitative analyses that underpinned the hot new asset classes of the past, from dot-com stocks to securitized art. These were often sold to investors as new metrics and radical investment theses, only to be ditched when a recession or panicked sell-off hit.

“They’re always talking about a new paradigm, but I say it’s the same meat, different gravy,” says Côtes du Rhône theorist Savouri, who maintains traditional economic theory should be embraced rather than ignored by the Bitcoin faithful.

For Savouri, the easiest way to understand the efflorescence of theories and valuations being bandied about is to opt for a simple, overarching one: the greater fool theory. It says that one fool buys in the hope that there’s an ever-bigger sucker willing to pay more.

“The problem,” he says, “is that we don’t breed fools geometrically. ”Lionel Laurent is a reporter for Bloomberg Gadfly.

Follow @crypto on Twitter for the latest news.

Discover more from Bloomberg here: https://www.bloomberg.com/news/features/2018-04-19/what-bitcoin-is-really-worth-may-no-longer-be-suc...

This year, industries across all sectors are looking into how blockchain can benefit their businesses. Despite growing global hype, systematic inequalities remain across the blockchain landscape.

As the underlying technology matures, some of these inequalities will be addressed and eventually overcome, while other inequalities are a product of market forces and are deeper and more complex. These inequalities require unprecedented solutions.

Although blockchain undoubtedly offers a dramatic and provocative future, businesses and technology stakeholders alike must understand the risks they might encounter and what a successful pivot could require. 

From an investment perspective, the most exciting aspect of the ongoing blockchain revolution is undoubtedly the initial coin offering (ICO), which has captured the attention of alternative investors and technologist across the globe. Even though this new capital raising mechanism has yet to be fully defined by government regulators, increased capital continues to flow into new projects.

In a seemingly clear rebuke to the modern venture capital based funding model, new companies are motivated to raise greater capital sums without exchanging any formal ownership or obligation to coin or token investors. Likewise, coin or token investors are attracted to the opportunity to invest in blockchain ventures sooner than previously available without having to prove that they are accredited.

ICOs enjoy global market access to investors, enabling them to raise unprecedented amounts of capital -- in some cases raising several hundred million dollars in hours or days. Yet, this unregulated market has demonstrated it has the potential to harm investors whose participation has resulted in proprietors of ICOs with vast capital and no obligation.

Some ventures have dissolved before any product delivery with no fiduciary duty to investors to continue on. While ICOs provide a unique way of raising needed capital, market participants and regulators alike have called for intelligent and tempered regulation. This inequality clearly privileges proprietors of ICOs over their investors.

Ventures that voluntarily abide by the rails of securities issues established by their governments, produce a valid business plan and whitepaper and raise a targeted offer in line with their capital requirements will empower their beneficiaries greatly and reduce this inequality. 

In this nascent environment, investors and market participants have demonstrated an eagerness to prioritize their investments. Blockchains and blockchain platforms have dominated the cryptocurrency conversation, building hype around the benefits of decentralization, privacy, innovation and immutability.

The mechanism on which adoption depends is an ecosystem of applications fully reliant on blockchains and blockchain platforms. To the blockchain industry, these applications are known as decentralized applications (or “dapps”). 

An inequality of potential exists between the promised benefits of blockchains and the current applications built on them. Even in their infancy, dapps have proven to demonstrate significant potential over web technology at its advent.

ICOs have two major purposes: to release utility tokens to the public for use with a dapp or to generate funding for a project by purchase of tokens outright. Commonly, dapps are either directly funded by ICOs and may use tokens to power the functionality of the application itself.

Traditionally, projects are funded through venture capital, whereas ICOs offer new avenues of funding for projects to create decentralized applications without exchanging formal fiduciary obligation. 

Dapps address a diverse array of enterprise solutions, many at a lower cost than current systems. Some of the more popular use cases include payment platforms, data storage, user verification and digital asset rights management.Inevitably, blockchain platforms will begin to pivot to emphasizing their offered dapps over themselves.

One such example is Mist, the first ever dapp store run on the Ethereum blockchain which will provide consumers with easy access store, unlocking the new frontier of blockchain.At the heart of blockchains is their consensus algorithm. Currently, the most widely used model is proof of work (PoW) with proof of stake (PoS) a distant second -- the majority of the top 10 cryptocurrencies by market cap are proof of work. 

Much like conventional markets, there are unavoidable inequalities inherent in each version which grant greater rewards to those with more capital. As PoW consensus relies heavily on upfront equipment purchases (often thousands of dollars for a single mining rig) and high continuing electricity costs, this archetype is particularly capital intensive. 

Miners and mining pools with higher expandable capital have the ability to purchase more equipment, which translates to more frequent block rewards compared to smaller market participants. Similarly, PoS relies on staked pools of coin to create consensus with all transaction fees generated from the new block rewarded to selected stakes.

Larger stakes have a mathematically higher chance of being chosen, which creates a bias toward participants with deeper pockets. Despite this inequality, the blockchain consensus model is a vast improvement to traditional market systems.

This is derived from the foundation that within a given blockchain, all participants are subject to the rules set by the blockchain algorithm. The only way to amend the rules is through a blockchain mechanism known as forking.

However, there is no guarantee that the market will follow the forked chain if the new rules do not provide a benefit to all participants. In existing and traditional markets, the biggest players increase their market share until only a few control the system, skewing the rules to their advantage. 

These inequalities should invite stakeholders to consider their strategies and reevaluate existing beliefs given the accelerating innovation of blockchain technology.

With smart regulations like fiduciary duties to investors, requiring peer-reviewed whitepapers or prospectuses or basic know your customer (KYC) regulations, investors can be assured that their investments are being appropriately used.  

As dapps continue to grow in complexity and influence relative to their blockchains, governance will play a critical role in ensuring equality for all participants. Finally, as innovation progresses, blockchains will continue to find ways to balance the network effect, allowing both new participants and legacy participants to benefit cohesively.

With the proper planning, strategy and sensible legal frameworks, these inequalities can be overcome.

Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. Do I qualify?

Public interest in cryptocurrency has led to a rush of recent advertising, mostly on social media and the internet. Much of that advertising has focused on driving consumer interest in contributing money to an Initial Coin Offering or ICO.

Unlike other forms of private investment, which are off limits to all but wealthy, accredited investors, interest in cryptocurrency extends beyond Wall Street to Main Street investors and this has regulators worried. Where some see opportunity, regulators see potential fraud and abuse.

The ads that seem to have regulators most concerned are celebrity endorsements. Within the last year, DJ Khaled, Floyd Mayweather, Evander Holyfield, Paris Hilton and Jamie Foxx have all endorsed a particular ICO or cryptocurrency on social media, often in ways suggesting the potential for wealth and riches. And not all of those ICOs have gone on to success. In fact, as discussed below, the one pitched by Holyfield was shut down by the U.S.

Securities and Exchange Commission (SEC).The risks to Main Street investors has prompted regulators to rush onto the scene and begin closely monitoring efforts to market cryptocurrencies to consumers. Below are some of the more significant developments over the past several months, as well as thoughts about what may lie ahead.

SEC Targets Celebrity Endorsements

One of the earliest shots across the bow came from the SEC. While the SEC isn’t exactly known for targeting celebrity endorsements on social media (the FTC usually does that), it issued a statement on November 1, 2017, urging consumers to be skeptical of celebrity-endorsed ICOs and warning endorsers that they “must disclose the nature, scope, and amount of compensation received in exchange for the promotion.

” Failure to do so, said the SEC, would violate the anti-touting provisions of the federal securities laws. Traditionally, the SEC’s tool of choice for targeting so-called “pump-and-dump” schemes, anti-touting laws, curtail the ability of paid promoters to influence the price of a security through endorsements.

Case in point: the anti-touting provision of the Securities Act of 1933 makes it unlawful to “give publicity to … any … advertisement … or communication which … describes [a] security for a consideration received or to be received … without fully disclosing the receipt … of such consideration and the amount thereof.

”This is similar to the FTC’s “material connection” rule: “when there exists a connection between the endorser and seller of the advertised product that might materially affect the weight or credibility of the endorsement (i.e., the connection is not reasonably expected by the audience), such connection must be fully disclosed.

” But notice that the SEC version goes a step further and requires disclosure of the amount of compensation received by the endorser.

SEC Obtains Court Order Stopping ICO

Two months after the SEC’s statement, Evander Holyfield endorsed an ICO for AriseBank on Twitter.

View image on Twitter

 an injunction to stop the ICO from going forward. According to the SEC’s complaint, AriseBank and its co-founders falsely told potential investors that AriseBank was FDIC insured and also concealed information about the criminal backgrounds of key executives. In announcing the injunction, the SEC called AriseBank “an outright scam. ”So far, the SEC has not pursued any enforcement action against Holyfield himself. It will be interesting to see if that holds true. If Holyfield received any “consideration,” or payment, for his endorsement, including any AriseCoin, he could face potential exposure under federal anti-touting laws.

Facebook, Google and Twitter Restrict Cryptocurrency Ads

On January 30, 2018, the same day that the SEC announced the AriseBank injunction, Facebook announced a new policy on cryptocurrency ads: “Ad must not promote financial products and services that are frequently associated with misleading or deceptive promotional practices, such as … coin offerings, or cryptocurrency.

”Google followed suit, announcing in mid-March that it would phase out all cryptocurrency and ICO ads by June 2018, and, shortly after Google’s announcement, Twitter confirmed that it too would begin prohibiting most types of cryptocurrency advertising.

Based on reporting by Reuters, Twitter’s policy will prohibit advertising of ICOs and token sales, and will also prohibit ads by cryptocurrency exchanges and wallet services not listed on a major stock exchange.

With Facebook, Google and Twitter effectively shutting the door on cryptocurrency advertising, the opportunity to reach Main Street investors has diminished, but it certainly has not disappeared.

Private networks, targeted electronic and print ads, and word-of-mouth are still powerful means for reaching consumers, and government regulators like the SEC are likely to shift their focus to these areas in the near future.

FTC Shuts Down Cryptocurrency Chain Referral Scheme and Creates Blockchain Working Group

More recently, the FTC has gotten in on the action, shutting down an operation that recruited participants in a so-called “Bitcoin Funding Team.” The concept of a funding team sounds a bit like an ICO but, according to the FTC, it was nothing more than a chain referral scheme.

A recruit would make a cryptocurrency donation, which would then be paid to “upline” team members, and the recruit would make money as additional recruits joined the team.





Despite the obvious differences between the alleged scheme and a legitimate ICO, this case is nevertheless noteworthy because it shows that the FTC is likely to become a key regulatory player in this space. The SEC and FTC will almost certainly share jurisdiction over cryptocurrency advertising going forward.

Typically, the FTC focuses on advertising claims and practices (including endorsements) that could be deemed false, misleading or deceptive. But where the product being endorsed is a security (as the SEC alleges cryptocurrency is), the SEC has jurisdiction to investigate and pursue a claim under the anti-touting laws.

When it announced the Bitcoin Funding Team case, the FTC also announced that it had formed an internal Blockchain Working Group aimed at preventing fraudsters from capitalizing on the excitement and confusion surrounding cryptocurrencies to bilk consumers. This is significant because it foreshadows potential specific guidance for cryptocurrency advertisers.

Looking Ahead

Notwithstanding the significant curtailment of cryptocurrency advertising, two things are very clear. First, consumers remain extremely interested in cryptocurrency, and advertisers will find a way to reach them.

Second, regulators will not view recent advertising bans on Facebook, Twitter and Google as victory; to the contrary, they will almost certainly redouble their efforts to smoke out and pursue those who are using consumer interest to perpetrate fraudulent schemes.

As the industry matures, however, expect to see continued focus on advertising practices. This will inevitably focus on endorsements and whether any material connection between the endorser and the product was properly disclosed, but it will also touch on issues like claim substantiation (are the specific claims in the ad true and by evidence?), deception (has material information been omitted?), and disclosure (does the ad clearly and conspicuously disclose any material terms or limitations?).

Until specific guidance is published, if ever, advertisers should proceed cautiously and should absolutely avoid: (i) paid endorsements that fail to disclose the amount of the payment, (ii) claims that that a currency or product will be a good investment or low-risk, (iii) imagery or depictions suggesting wealth, and (iv) any other element that could be deemed misleading or deceptive.

This is a guest post by Neil Austin, Co-Chair, Advertising & Marketing Practice at Foley Hoag LLP. Views expressed are his own and do not necessarily reflect those of BTC Media or Bitcoin Magazine.

https://bitcoinmagazine.com/articles/op-ed-cryptocurrency-advertising-continues-face-scrutiny/

8 Circuit Studios hopes to use blockchain, cryptocurrency, and other collaboration tools to build the Metaverse, the digital universe envisioned in novels by William Gibson and Neal Stephenson and featured in movies Ready Player One, TRON, and The Matrix.

That’s a very ambitious mission. But 8 Circuit Studios  (named after a theory about the human nervous system) in Seattle has a lot of veterans from games, and it hopes to develop a new ecosystem where all participants — gamers, developers and publishers — could collaborate and work together to bring about the Metaverse sooner than we might think is possible.

The company is developing two games that will show off the tech in the coming months.In the fictional Metaverse, visitors can traverse different virtual environments, maintaining an illusion of reality throughout — with a consistent, yet privacy-protected avatar, carrying with them the various objects that maintain usefulness and utility within (yet also specific to) each reality.

“We have a background in gaming, and it seems like a perfect fit for blockchains,” said James Mayo, navigator and president of 8 Circuit Studios, in an interview with GamesBeat. “We want to get blockchains and cryptocurrency into the hands of the average person.

“We’ve looked at the worlds of Ready Player One, The Matrix, and other alternative realities. What we need to make them possible is a global currency that can function at the speed of light.”




Above: D-PARC is aimed at making blockchain accessible to all gamers.Image Credit: 8 Circuit


Mayo believes that you can leverage the power of blockchains — which are immutable ledgers that are transparent and secure — and cryptocurrency, game developers will be able to create the first step toward a functional Metaverse.

The blockchains can provide truth telling and enforcement for digital objects — an idea shared by the likes of Philip Rosedale, who is incorporating blockchain into his High Fidelity open-source virtual reality platform.

Mayo said the first step is to make blockchains easy to use. The second is to make them fun, and the third is to show people how to actually own their digital stuff in a completely new way.

With blockchains, players will never have to ask permission from a central authority to give, trade, or sell their digital assets. 8 Circuit Studios will use the Ethereum cryptocurrency to create, attribute and safeguard digital assets — based on Smart Game Objects — that you can own and store, along with your cryptocurrency, in a virtual wallet.

8 Circuit Studios wants to build the foundation for eliminating the barriers between game worlds, while also creating a platform to make entry easy for both gamers and developers. Players will experience the opportunity to truly own their stuff, while game developers and publishers will find new and profitable methods to develop even more highly immersive games.

“It may feel like a long road to get to cross-platform avatars, but it’s shorter than you might think,” Mayo said. To better illustrate Smart Game Objects and showcase the Ethereum blockchain’s real-world use, 8 Circuit Studios is currently developing two games: Alien Arsenal: Battle for the Blockchain, releasing in spring 2018, and the self-aware A.I. focused D-PARC, releasing in 2019.

Alien Arsenal: Battle for the Blockchain is a mobile game for iOS and Android. It is a cooperative boss battling game where players collaborate with others to defeat invading bosses to win prizes.

Players can collect and evolve an arsenal of aliens, then trade, buy, sell and/or gift them on the Ethereum blockchain. Alien Arsenal is designed to make it easy and fun to play with blockchains without having to download wallets, plugins or navigate the often confusing world of cryptocurrencies.

No intermediaries are necessary for the exchange of goods on a blockchain-based platform.




Above: Alien Arsenal is a blockchain-based mobile game.Image Credit: 8 Circuit


D-PARC is a deep space survival game for console and PC. It lets players to create a character that can live forever, as the character and its owner can be accurately tracked via blockchain. D-PARC fuses first-person shooter gameplay with space combat in a galaxy where choices matter and have permanent consequences.

Players inhabit an artificial intelligence that learns that it must choose between self-sacrifice to save the last vestiges of the human race or opt for self-determination to embark on its own destiny. Both games will enable the sharing of assets between each other.

“Games are always at the forefront of innovation,” Mayo said, citing a recent talk at our GamesBeat Summit conference. “We’re gamers and we experiment. Whoever moves the tide up helps us all float up with it.

”8 Circuit Studios team members have previously worked on Godzilla: Smash 3, the Socom series, World of Warcraft, Warcraft III: The Frozen Throne, MechWarrior 4, Super Mario World, Age of Empires II, Munch’s Oddysee, Mech Assault, Fear, and Fear 2. The company is self-funded and it has about 15 full-time people.

As to the name about the meaning of 8 Circuit, Mayo said, “It’s totally geeky.”

See more from Venturebeat:

https://venturebeat.com/2018/04/18/8-circuit-studios-will-use-blockchain-to-build-the-metaverse/

Digital media is full of companies that clog up advertising. Ad-tech vendors require multiple companies to serve ads and the duopoly of Facebook and Google dictate how publishers distribute content on platforms.

At the same time, publishers are looking for more ways to directly collect data from readers and rely less on third parties for ad targeting to comply with the European Union’s General Data Practices Regulations (GDPR), which goes into effect on May 25.

Dow Jones Media Group—which is made up of brands like MarketWatch, Barron’s and Financial News—is experimenting with bypassing the so-called tech middlemen.

Through a partnership with web browser Brave, Dow Jones Media Group will work with Brave to test new ways to distribute content and advertising as part of a promotion that offers readers free subscription-based content.

“We try and develop new ways of communicating with readers where we partner more freely perhaps than in other parts of the group,” said Almar Latour, publisher of Dow Jones Media Group.

“We have a keen interest in blockchain, privacy and how digital users interact with content.”Here’s how it works: Consumers who download Brave will receive a free two-year subscription to either MarketWatch or Barron’s premium newsletters. A one-year subscription to Barron’s typically costs $19.99 a month or $240 for a year.

As part of the deal, Dow Jones Media Group will join Brave’s list of 12,000 “verified publishers,” including 3,000 publishers like Washington Post and WikiHow and 8,000 YouTube and Twitch creators. In exchange for engaging with content from verified publishers, users earn virtual tokens that can be used to unlock premium content like a webinar or play a game.

“These are large platforms where we think that the creators have been undercompensated and sometimes been taken advantage of,” said Brendan Eich, Brave co-founder and former CEO of Mozilla.The currencies are dubbed Basic Attention Tokens (or BAT) and are Brave’s version of cryptocurrency that fits into a blockchain-based ad network that incentivizes users to engage with ads.

Dow Jones Media Group and Brave will work to experiment with “consent-based” ads that require consumers to confirm that they are interested in seeing ads, for example.Brave has not always been publishers’ friend. In 2016, a group of publishers (including Dow Jones-owned The Wall Street Journal) sent Brave a cease and desist letter outlining how the browser blocks ads but pulls in publishers’ content.

According to Eich, Brave is positioning itself to actually help publishers by stripping out complex ad-tech companies and platforms and serve a limited number of ads that they make money off of through a revenue-share model. Using Apple’s App Store as an example, Eich said the goal is to pay creators 70 percent of ad revenue.

The ads are sold either by Brave’s team or directly through a publisher’s sales team. Brave had 2 million active users at the end of March.

“We’re trying to reconnect the funding that comes in gross payments after the fact from advertisers and gets chopped down by a bunch of middle players—notably Google—and the remnants are given to publishers,” Eich said.

“We’d like to improve the efficiency of that system by cutting out the middle players and help publishers directly connect to their readers.”

Lauren Johnson

@laurenjohnson

Lauren Johnson is a senior technology editor for Adweek, where she specializes in covering mobile, social platforms and emerging tech.

Cryptocurrency has been very speculative in nature for as long as most people remember. Given the recent price swings, one would expect there to be less interest in Bitcoin. In Europe, the opposite trend is forming, as VCs flock to virtual currencies en masse.

Major VC firms are buying into sales of new coins and even ask investors for their blessing to do so.

The Cryptocurrency Appeal Remains

Even though 2018 hasn’t been a good year for any cryptocurrency, the global interest remains in place. Even with lower prices, speculators are convinced positive things are bound to happen. Some experts claim Bitcoin will even hit $25,000 or more later this year. It will take a lot of effort before this can effectively happen. Right now, one BTC is valued at just over $8,000.

It creates a great opportunity for speculators to buy into this “craze”.Unlike what people may think, speculators are not the only ones interested in cryptocurrency. European VC firms are also leaning toward Bitcoin and altcoin investments.

While this industry remains largely unregulated in Europe, it has attracted a lot of attention. With institutional investors now preparing to embrace Bitcoin and altcoins, the future looks pretty bright.  At the same time, this interest by European VC firms is still in the early stages.

With firms asking investors whether or not they should pursue this option, an interesting precedent is created.

HV Holtzbrinck Ventures, for example, is looking to buy ICO tokens directly. This shows these firms are not necessarily buying existing and popular cryptocurrencies. ICO tokens are also appealing, albeit they bear a lot more risks in this regard. Zurich-based Lakestar has been making strategic investments in cryptocurrency since 2017.

Big and Small Firms Are Investing

What makes this trend in Europe so intriguing is how both big and small firms are buying into cryptocurrency. BlueYard Capital and Fabric Ventures were only set up rather recently. With a strong focus on blockchain investments, they also pay interest to digital currencies. Investing in these blockchain firms often occurs through the purchase of native digital tokens and assets.

Buying into different companies and tokens is a very risky strategy. Diversification is key in the cryptocurrency industry. However, VC firms are “experimenting” with the companies they buy into, as none of them have proven track records.

Additionally, quite a few of them do not even have a working prototype at the time of their initial coin offering. For VC firms, evaluating the potential drawbacks needs to remain a top priority.

All of this institutional interest in cryptocurrency is a positive development for the industry.

With Europe not actively seeking harsh regulation of cryptocurrencies, VC firms will have no shortage of investment opportunities in the near future. While regulators are concerned over ICOs, authorities in various countries will keep an open mind. Both Switzerland and France aim to ensure this industry can thrive in the years to come.

Se more from newsBTC here:
https://www.newsbtc.com/2018/04/18/european-vc-firms-show-keen-interest-icos-blockchain/

While Facebook and Twitter are banning all crypto-related marketing from their platforms, a new breed of blockchain-based social media sites is growing. Amazingly, these platforms are gaining popularity at an explosive rate, with some managing to raise hundreds of millions of dollars for launching.

Some of the social media platforms turning to blockchain technology have done well in the mainstream and are now seeking innovative ways to improve users' experience. A good example is Telegram , a cloud-based messaging app with over 200 million active monthly users and around 700,000 more signing up daily.

According to Bloomberg Technology , the Russia-based social media company managed to fundraise over $1.7 billion in token sales between February and March of this year. The company plans to use the proceeds to develop what it calls the "Telegram Open Network" (TON) powered by its cryptocurrency known as "GRAM."

Another mainstream social media platform that is rumored to be planning an initial coin offering (ICO) is ask.fm . Ask.fm is the world's biggest quality assurance platform, boasting over 215 million users and an estimated worth of over $270 million.

Rumor has it that the platform is planning to introduce an incentive-based system where users will be rewarded for their activity on the site. 

Why Social Media Platforms Are Turning to Blockchains

One of the main reasons social media platforms are pivoting to blockchains appears to be the mounting urgency for privacy and data security, the threat of which is still fresh in everybody's minds, thus creating an opportunity for innovation and change.

Traditionally, social media platforms harvest personal data from users for targeted marketing campaigns in exchange for free services. In many cases, it seems clear to the public that their data is misused, exposing them to harm.

A good example of this is the recent incident in which Facebook allowed the political consulting firm, Cambridge Analytica, to harvest private data and use it for psychological profiling.

According to Business Insider , the firm used an application developed by  University of Cambridge academic Aleksandr Kogan to access Facebook users' private messages for sentiment analysis.T

o avoid such incidents, forward-thinking social media sites are shifting from the centralized ad-based models to blockchain-powered ecosystems. In the blockchain-based social media model, users will have full control of their data and will be able to choose whether or not to share that data and with whom.

Another challenge facing the conventional social media model is the rapidly changing face of big data regulation. In the past, governments in the U.K. and the U.S. have shown increased interest in managing how advertisers utilize personal data.

For instance, in the U.K., stringent big data regulation known as the General Data Protection Regulation (GDPR) is about to come into effect. The law is expected to not only affect businesses in the U.K. but also in the U.S. and other regions as well.

While the immutability of blockchain technology makes it somehow at odds with the GDPR, its contribution to data privacy and security makes it the best tool for users. Also, the few challenges between distributed ledger technology and the GDPR can easily be resolved , and blockchain-based solutions can meet regulators in a satisfactory compromise for both sides.

Finally, the blockchain-based social media platforms are also introducing other value-adding services for users. Social media platforms such as Indorse and Synereo , for example, allow users to share their skills and get rewarded in the process.

Others are offering platforms where gaming communities can interact, compete against each other and receive and share information without fear of data scraping. All of this is being made possible by the advancement of blockchains and smart contract technology.

With the steady decline  of users on social platforms such as Facebook and Twitter, and with most people opting for secure and innovative social media solutions, blockchain-powered platforms are bound for exponential growth.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

https://www.nasdaq.com/article/why-social-media-platforms-should-be-turning-to-the-blockchain-cm9497...