Blockchain Truce? Putin’s Internet Adviser Calls for US-Russia Cooperation

Blockchain Truce? Putin’s Internet Adviser Calls for US-Russia Cooperation

An adviser to Russian President Vladimir Putin has a strong message for state governments: stop competing for blockchain dominance.

As China, Russia, the U.S. and other countries around the globe seek to distinguish themselves in the way they regulate their approach to blockchain and cryptocurrencies, Herman Klimenko said that global superpowers should unite to create a coalition centered on blockchain technology.

Instead of competing at the highest level, Klimenko argues that state leaders should use their authority to work together to create the optimal playing field on which global coders and companies can compete.

Speaking with CoinDesk through a translator, the man who was appointed adviser to the Russian President in late 2015 further explained his position:

“We would like to advise to launch a common platform for your country, for our country, and we can invite other countries to join us, to have one platform for us to exchange the opinions of our authorities and governments.”

As template for how such state-supported blockchain coalition members might be organized Klimenk pointed to the recently created Russian Association of Blockchain and Cryptocurrency (RACIB).

Klimenko helped found RACIB as part of his role as chairman of the board for Russia’s Institute for Internet Development and, under the leadership of media entrepreneur Arseniy Sheltsin, the blockchain association is now divided into four areas of focus.

These include cryptocurrencies, ICOs, blockchain as a platform and “international calculation” – a focus area that hones in on how the technology might impact global relations. Here, participants have the opportunity to take part in public-private partnerships to build pilots around a number of potential use cases in both the government and corporate sectors.

While each of the four areas has a manager who oversees project coordination, Klimenko said the positions are more of a formality. Instead, he argues the 1,100 members who are currently registered don’t “need physical management in the traditional sense.”

“In this association, most of what we need from our members is their skills in different directions,” said Klimenko. “We don’t have any membership fees, we don’t need them, we don’t need much in terms of traditional management.”

Consortia wars

If the structure of RACIB sounds familiar, that’s because in one way, there’s nothing really all that new about it. But that doesn’t mean the application of the structure at the state government-level might not result in tangible differences.

While it was individuals who largely helped the first blockchain – bitcoin – reach its current level of adoption, other applications of blockchain have largely depended on consortia of companies organizing around a wide-range of industries. From financial services firms to insurance companies to IT consultancies, it seems most industries have come together to launch blockchain consortia projects in pursuit of increasing efficiency.

But what distinguishes Klimenko’s call for multilateral government collaboration on blockchain is the scale of the work, and what such a scale might eventually mean.

The distributed nature of blockchain means it relies largely on the network effects created by having as many people as possible participating – the more people or groups that use a blockchain, the more inefficiencies can be removed from a system and the more robust that system is.

Klimenko positioned the creation of an intergovernmental blockchain group as the removal of the final silo that could be inhibiting the potential benefits of blockchain.

“The competition is not between governments, but between programmers,” he said.

As an example of how such inefficiences might be removed by government cooperation, he pointed to the nascent blockchain field of “telemedecine” or as Klimenko prefers to call it, “digital medicine.”

While local reports about the association have largely focused on how it might use the initial coin offering (ICO) funding model as a way to fund internet-enabled medical services, Kilmenko said the research is actually much broader. By standardizing the way government regulators track pharmaceutical he said new efficiencies could be revealed.

“If we take the medical data and scan the image from different parts of the world, from Russia, or USA, or China, or a different country, the data is actually the same, it is universal,” he said.

China concerns

But it may already be too late for Klimenko’s vision of cooperative efforts among governments.

In the past month alone, Russia’s central bank has indicated it could take a more restrictive stance on cryptocurrency, the U.S. Securities and Exchange Commission (SEC) has released a report stating ICO tokens may be securities and China has taken the particularly drastic step of stating that ICO tokens are illegal and forcing the closure of bitcoin exchanges.

But as opposed to an outright ban – or other solutions that create silos instead of dismantle them – Kilmenko remains committed to a more nuanced, technology-driven approach.

“It’s very clear the risk of cryptocurrencies and ICOs. And it’s also clear there are methods existing to reduce those risks,” he said. Klimenko is joined in this vision for a more unified global approach by RACIB director, Sheltsin, who is also the CEO of Russian news site, The Runet.

In conversation with CoinDesk, Sheltsin said RACIB’s “main goal” is to help organize “concerted activity related to distribution of blockchain technology in [the] Russian Federation and beyond its borders.”

He concluded:

“We think the governments cooperation on blockchain will help us to share the best practices in regulation and to deal with common problems.”

Image via Michael del Castillo for CoinDesk

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Only in Arizona: How Smart Contract Clarity Is Winning Over Startups

Only in Arizona: How Smart Contract Clarity Is Winning Over Startups

What happens when someone breaches a contract?

If you’ve gone through all the rigmarole of developing a paper contract, the legal ramifications are clear. But paper contracts are not only inefficient but also prone to fraud, which is why a group of startups and developers are pushing digital “smart contract” systems tied to immutable blockchains.

But what if someone breaches their smart contract? The answer, in most places throughout the world, is less clear. That is, unless you’re in Arizona.

Since passing a law in March that enshrined the validity and enforceability of digital signatures recorded on a blockchain, the Grand Canyon State has quietly emerged as a choice location for blockchain companies that develop applications based on the self-executing pieces of code.

For Sweetbridge, a Phoenix-based outfit building a blockchain supply chain finance platform, the law has afforded the company sufficient legal clarity and confidence to begin rolling out operations more aggressively.

Caroline Lynch, Sweetbridge’s public policy and legislative advisor, explained that the state’s decision to elevate smart contracts to the same legal grounding as traditional contracts has been imperative to the company’s growth.

Lynch told CoinDesk:

“It takes away that one potential area for dispute, if for no other reason than a party to a contract cannot argue that because it was executed through a digital ledger it lacks validity.”

Arizona’s legal safe haven

Stepping back, the law in March actually amended the Arizona Electronic Transactions Act (which already stated that records or signatures cannot be denied legal effect and enforceability based on the fact they’re in electronic format) to include digital signatures recorded on a blockchain.

It now states: “A signature that is secured through blockchain technology is considered to be in electronic form and to be an electronic signature … A record or contract that is secured through blockchain technology is considered to be in an electronic form and to be an electronic record.”

As such, in the event of a dispute or breach of a smart contract, parties have full ability to seek legal recourse in the state’s court system.

And with this, business representatives from the state have wasted little time in using the newfound language as a means to lure companies that are flirting with smart contract applications in sectors such as finance, real estate, law, public records and insurance.

According to Darryn Jones, director of business development at the Greater Phoenix Economic Council, because the law is technology neutral, it legitimizes smart contracts regardless of the blockchain on which they choose to build.

Jones went on:

“From a value proposition standpoint, as we go and recruit companies that are utilizing or developing smart contract software, we can say that this gives them a safe haven for operating in Arizona.”

The business of contracts

For blockchain-based supply chain startups, this small change makes a big difference.

Supply chains, at their core, are distribution channels involving transactions among numerous partners and entities, all with contracts that lay out how each is supposed to act. If those contracts cannot be enforced or accepted in a court of law, the entire viability of the relationship is put in doubt.

“Eventually, the stuff that you implement and any smart contract code that you put in place to direct business processes or transactions has to stand on legal footing. It has to be enforceable. And if it’s not, it’s going to fall apart in a second,” said Todd Taylor, chief executive of Aperio, another Phoenix-based blockchain supply chain startup, and a professor at Arizona State University.

While states such as Vermont and Nevada have passed laws this year aimed to bring additional clarity to blockchain firms, Arizona remains the only state so far to have cemented the enforceability of smart contracts.

Sweetbridge’s Lynch, who previously served as chief counsel to the House Judiciary Committee in Washington, D.C., agreed with Taylor, saying the stability is of utmost importance as her company looks to build out its platform and carve its niche in the blockchain world.

And Jones continued:

“They wouldn’t be able to do this in Arizona if we didn’t have this law. These companies would not be able to utilize their coins and their service as a smart contract platform if this enabling legislation was not passed.”

An unusually friendly climate

But supply chain companies aren’t the only ones seeing benefit in setting up shop in Arizona.

For instance, Dash Core Team, which oversees the development of dash – the sixth-largest cryptocurrency by market capitalization – has established a hub in an incubator run by Arizona State University.

Ryan Taylor, CEO of Dash Core Team, said his company has developed several successful partnerships with Phoenix-area businesses by way of city and state government officials making introductions. For example, Arizona State University launched a blockchain research lab in partnership with Dash, and is working on a blockchain certificate program for interested students.

“They’re connecting the dots actively; they’re making this a priority,” he said. “They’re going to find ways to help the industry flourish, and that’s huge, because I’d say, in most geographies, the politicians don’t feel that same way and they don’t even understand the technology.”

Observers say the law’s passage is indicative of a surprising, if not rare, willingness among the state’s political elites to overlook certain negative stereotypes in favor of how blockchain technology can be leveraged for economic development purposes.

“The bill that was passed tees us up in a way that it’s the start of many good things that we expect to come from our legislative bodies,” said Rhonda Milligan, co-founder of Sweetbridge.

Earlier this month, Arizona Attorney General Mark Brnovich announced his intent to establish the country’s first regulatory sandbox for financial technology, a category many blockchain startups fall under.

Dash’s Taylor concluded:

“I think that business groups and government officials could learn a lot from looking at what Arizona is doing to ensure that they have a seat at the table when it comes to this new emerging field.”

Arizona image via Shutterstock

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Ethereum’s Next Hard Fork Is Now Officially Being Tested

Ethereum’s Next Hard Fork Is Now Officially Being Tested

Byzantium, the first part of ethereum’s long-awaited Metropolis upgrade, has officially launched on testnet.

The simulated hard fork was executed this morning on Ropsten, the ethereum testing environment, and is expected to run for a few weeks of troubleshooting before the fork occurs on the main ethereum blockchain, currently the world’s second-largest by market capitalization. 

The testing period will involve a trial of the nine EIPs (ethereum improvement protocols) to be introduced in the Byzantium hardfork. As previously detailed by CoinDesk, the code updates will introduce changes to increase the functionality of the network while minimizing potential exploits and also paving the way for novel cryptography on the ethereum platform.

Looking ahead, testing will likely take about three weeks, suggesting the actual Byzantium hard fork is likely to occur sometime around October 9. However, this is contingent on whether the test does not cause unanticipated problems.

Speaking at the ethereum core dev meet up on September 8, ethereum founder Vitalik Buterin said he expected the testing period will require around three to four weeks. In response, developer Péter Szilágyi stated that the tests may need less time, because “if things go wrong….they will go wrong fast.”

The ethereum developers are expected to announce a formal date for the hard fork shortly – provided everything runs according to plan.

You can watch a live infographic of the Byzantium fork on Ropsten here.

Blue cells via Shutterstock

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Proof of Space: BitTorrent Creator Publishes Eco-Friendly Mining Paper

Proof of Space: BitTorrent Creator Publishes Eco-Friendly Mining Paper

BitTorrent developer Bram Cohen has published a new white paper that envisions an eco-friendly alternative to bitcoin’s energy-intensive proof-of-work computational process.

Dubbed “proof-of-space,” the method relies on disk space rather than computational power as the main resource for mining (the process by which new transactions are added to a blockchain) creating what is claimed to be a less ecologically damaging and more economical alternative to proof-of-work.

Cohen spoke to CoinDesk back in March about his efforts to develop the solution, work that set the stage for this week’s white paper release.

The paper, “Beyond Hellman’s Time-Memory Trade-Offs with Applications to Proofs of Space,” outlines the use of proof-of-space to establish a mining process that requires less energy (and the natural resources to produce it). Because of the reduction in energy requirements, as well as the reliance on pre-existing hardware, the proposed method is aimed at making mining accessible to anyone with a computer.

As the paper explains:

“The idea is to use disk space rather than computation as the main resource for mining. As millions of users have a significant amount of unused disk space available (on laptops etc.), dedicating this space towards securing a blockchain would result in almost no waste of resources.”

Under the proof-of-space system, miners allocate some of their unused disk space to the network, with the probability of successfully mining a block being proportional to the amount of space allocated divided by the total capacity of the network.

In addition to Cohen, the white paper credits Hamza Abusalah, Joël Alwen and Krzysztof Pietrzak from the Institute of Science and Technology Austria, Danylo Khilko from ENS Paris and Leonid Reyzin from Boston University as authors.

It still remains to be seen, however, whether the paper will serve as the basis for a new cryptocurrency, with Cohen telling CoinDesk in March that he doesn’t see much need to create a new one.

“For the most part there shouldn’t be the need [to launch new coins],” he said, adding:

“But I have this idea about underlying mining and how it works that does make it inherently different.”

Hard disks image via Shutterstock

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The Economic Case for Conservative Bitcoin Development

The Economic Case for Conservative Bitcoin Development

Ariel Deschapell is a full-stack javascript developer teaching at the Ironhack coding bootcamp in Miami, and a recent Henry Hazlitt fellow in Digital Development at the Foundation for Economic Education.

In this opinion piece, Deschapell discusses the tensions underlying bitcoin’s scaling debate, arguing those who have approached the protocol’s design with more caution are perhaps doing so with history on their side.

The way we think about bitcoin, its use cases and its subsequent road to adoption fundamentally underlies the scaling and governance debates at the heart of forks like bitcoin cash and Segwit2x.

As an unprecedented technology, bitcoin’s refusal to fit into any predefined conceptual pigeonhole continues to give fits to regulators and traditional financial intermediaries alike. But, this presents a problem to its advocates too, who rely on their own idealistic notions and necessarily incomplete understandings of bitcoin.

Economically, the way we think about bitcoin is also shaped by the way traditional money and payment systems have evolved and developed. These systems are our only frame of reference, but in using them as such, we must make use of sound economic theory or risk many intellectual pitfalls.

At the center of these considerations is the idea of bitcoin as a new type of money. Given its use as a means of exchange in many online and in-person payment gateways, it seems to be an easy jump to call it money just like the U.S. dollar or Japanese yen. Bitcoin was originally proposed as a “peer-to-peer digital cash” after all, and its most ardent maximalists aspire to have it replace the national patchwork of fiat currencies as the primary means of exchange around the globe.

However, bitcoin is not money – at least not yet.

Believing otherwise based on its use and characteristics as a usable medium of exchange is an erroneous conclusion, and worse, it can lead to problematic and ultimately harmful implications for its future development.

To ultimately have the best chance of establishing bitcoin as money, we must understand the nature and origin of money, and in that context the technical challenges facing any cryptocurrency.

The origin of money

Long prior to bitcoin, the economist Ludwig von Mises ingeniously articulated and expanded upon the Austrian school of economic thought regarding the nature and evolution of money.

In what is known as the “regression theorem,” Mises observed that all money originates as a universally valuable commodity before it ascends to becoming a medium of exchange, and then only subsequently, money proper. This was why the first widely used mediums of exchange were metals such as gold and silver.

These commodities were valued for their unique properties, ones which would also later make them very effective means of exchange and ultimately good money.

Gold and silver were both aesthetically attractive and relatively easy to clean. However, they were also malleable, easily divisible and completely uniform. Gradually, over thousands of years, these commodities supplanted barter as a much more efficient way to stimulate trade for ancient peoples.

In turn, this gave way to more convenient “banknotes,” or claims on gold and silver in a vault, and of course, fiat money, as governments discovered the power of appropriating control of the money supply. Digital replacements for this legal tender came even later.

This evolution of money took place gradually over thousands of years – and bitcoin stands in stark contrast. From its inception, dividing and sending bitcoins to and from addresses was a fairly trivial task. Within a few years, spending it at a number of online websites and even brick-and-mortar stores was a straightforward affair.

To the casual observer, it may seem as if bitcoin disproved Mises’s regression theorem: a purely conceptual number on a ledger that spawned from nothing and became a means of exchange almost overnight.

If only it was that simple.

The money test

At this point, it’s necessary to identify what money is and why it matters.

As defined by Merriam-Webster:

“Something generally accepted as a medium of exchange, a measure of value, or a means of payment.”

Wikipedia’s definition:

“Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts in a particular country or socio-economic context.”

The common denominator here is “generally accepted,” a standard that is a bit arbitrary but nonetheless is hardly met by bitcoin today.

Yes, many goods and services can be bought with bitcoin. But this doesn’t make it money any more than the hypothetical ability to spend wheat futures digitally would make wheat futures money.

It is technically possible to accomplish this much the same way as the majority of bitcoin commercial transactions work in practice: by instantly converting what the merchant receives into fiat currency, the real money still making this exchange possible.

Confusion on this point stems from our historical experience of currency (dollar, yen) and the systems used to facilitate their transfer of ownership (debit cards, checks, bank wires) being traditionally separate.

Bitcoin meshes the two into one. The protocol both establishes a provably scarce digital good and easily facilitates changes in their ownership regardless of geographic space. Yet, while this technological property gives the token significant utility and makes it easy to spend with the use of clever software and third parties, it does not make bitcoin money.

For bitcoin to be considered money, it must be generally accepted and used within a closed loop. Merchants must not only much more widely accept it as a payment option, but also feel fully confident in holding the actual bitcoin itself.

Establishing a store of value

After establishing that bitcoin cannot yet be considered money, suddenly the regression theorem becomes far more interesting and practical. If bitcoin is not money, then what is it? The only remaining answer is a valuable commodity, which brings us to the very beginning of the regression theorem.

Like gold and silver, bitcoin possesses unique properties that are valued by individuals. The fact that it remains entirely digital is not a problem conceptually, it only makes it unprecedented and therefore harder to grasp. But physicality isn’t a necessary prerequisite for a good to have market value.

The only prerequisite is scarcity. Through the ingenuity of its blockchain architecture, bitcoins became the first provably scarce digital good.

The attractive properties of this digital good can be said to include its extreme divisibility, fungibility and its hard limit on supply. Still, other alternative currencies were created in the past with all these properties, including the Liberty Dollar and E-Gold. These attempts were quickly shuttered by governments in the interest of maintaining their monopoly on currency issuance.

Bitcoin was different for what quickly became and remains its foremost feature: its resistance to censorship.

This is the bedrock of bitcoin’s usefulness as a store of value. The ability to hold wealth outside the system and largely outside of its reach is the original killer application for bitcoin. It is tied to the protocols functions of both establishing a scarce store of value and facilitating their transfer, regardless of physical space or the objection of any single third party.

However, to take this functionality for granted betrays a massive under-appreciation, if not complete misunderstanding, of the technology involved and its very real limits.

In software as with the world, security and safety are never a permanent state of affairs. Any computer network ever devised can be attacked, and attacked successfully at a high enough cost. Bitcoin’s brilliance is that its incentive architecture and resulting infrastructure makes the cost to attack and successfully disrupt the network very high.

The fact that it has been running without interruption for close to nine years is nothing short of a software miracle that speaks to the ingenuity and brilliance of the system’s design. However, past performances are never a guarantee of future results. This is even more so when it comes to something still as new and experimental as bitcoin.

The real challenge

To see why this is the case, we have to understand basic risk and threat analysis.

Imagine a computer system that, if compromised, gives an attacker $100. Now, if the cost to compromise that system is $10, then doing so is a worthwhile endeavor. However, if the cost to do so is instead $200, it clearly is not. In this simplistic example, the system can be considered hypothetically secure only in the latter case.

To date, it can be said the cost of disrupting bitcoin has always exceeded the value of doing so, as is evidenced by its successful continued operation. While quantitatively measuring the cost of compromising the bitcoin network is tricky at best, let’s first assume that it remains fixed.

If bitcoin continues to grow and add value to its ecosystem, the potential returns to be made in disrupting it also continue to increase. If the cost of compromising it remains the same all the while, it must eventually become cost-effective for some entity of sufficient resources to indeed compromise it. By its ambitious nature, there is no shortage of large and resourceful entities which bitcoin’s success continues to threaten.

Indeed the larger and more successful it becomes the greater the size, number, and motivation of such potential adversaries.

We’ve established that to become money bitcoin must be generally accepted and used within a closed loop. This is only possible if it first becomes a stable store of value, and even this long process has a necessary prerequisite: that bitcoin continues to be a secure store of value.

For it to ever have a chance at accomplishing this demands then that it must not only just maintain its security as it continues to scale to and increase in value. It must actually increase security as the network continues to scale and increase in value.

Cart before the horse

This is the central challenge facing bitcoin scalability.

It is not enough for it to simply handle more and more transactions cheaply. It must do so while preserving its most foundational feature, that of censorship resistance. Only by accomplishing that can it remain a trusted store of value on a fundamental technical level, and only after continuously proving this with more users and more wealth can it gain enough adoption and market confidence that it ultimately becomes a stable store of value. Then only subsequently can it become money

Only by accomplishing that can it remain a trusted store of value on a fundamental technical level, and only after continuously proving this with more users and more wealth can it gain enough adoption and market confidence that it becomes a stable store of value. Then only subsequently can it become money proper.

Assuming bitcoin is money first and foremost today, and concluding that it must immediately compete with the transaction times and fees of popular money transmitter apps like Venmo, is putting the cart before the horse.

Even worse, these assumptions have led to proposals that proactively sacrifice network security in favor of cheaper fees and other such secondary concerns.

This is the reason why I’ve previously written that the trade-offs from increasing the block limit as implemented by bitcoin cash and proposed by Segwit2x are not advantageous. There is problematic reasoning behind how such proposal increase the rate of adoption and very real long-run security concerns that remain unaddressed.

Of course, it is possible to disagree on these finer points. One can agree with the sentiment expressed here and also earnestly believe that the block size or other protocol changes won’t fatally impact block propagation, node numbers or miner centralization. Open discussion, debate and even open competition is key to finding the best way forward.

However, given the undeniable and fundamental importance of bitcoin’s censorship resistance in its value proposition, the burden of proof clearly rests on those who would change the protocol to show how such changes either do not impact the network’s distribution and security, or why such a tradeoff is otherwise desirable or urgently necessary.

Censorship resistance is simply too important to risk, especially when more secure approaches to scaling are readily available.

An issue of perspective

Bitcoin is not a short-term project or investment. Neither is its continued success a sure thing.

Make no mistake, continuing to upgrade bitcoin to handle true widespread adoption while maintaining its censorship resistance is a monumental task fraught with many risks and unknowns. Accomplishing this would be nothing short of an unprecedented feat of software engineering and human coordination, and would likely have a larger societal impact than any single previous technological advancement in history.

There exist no shortcuts through the careful and intelligent development needed to make this dream a reality.

Those who are impatient for bitcoin’s widespread adoption and use as money should look back at the history of traditional money for a sense of perspective. It took millennia for gold and silver to be established as universal means of exchange and money proper. It took centuries if not millennia more for these to be replaced by more abstract concepts such as banknotes and fiat currency.

By comparison, bitcoin is the first scarce digital good, and the first instance of a whole new asset class spontaneously appearing from the ether. With this in mind, the progress it has made in nine short years is both shocking and awe-inspiring.

Needless to say, it will take much longer than a decade for markets to fully embrace bitcoin with the same faith they have in fiat currencies today. But should it take even 100 years to accomplish this, it would remain a blink in the eye of history.

A blink, we are all lucky enough to get to see.

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which helped organize the Segwit2x bitcoin scaling proposal.

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$9 Million: Bitcoin Startup Luno Completes Series B Funding

$9 Million: Bitcoin Startup Luno Completes Series B Funding

Bitcoin wallet startup Luno has raised $9 million in new funding as part of a Series B round.

Announced today, the round was led by Balderton Capital, a London-based VC firm that has invested in startups like Revolut, which launched cryptocurrency services earlier this year. As part of the deal, Balderton partner Tim Bunting will join Luno’s board. Other contributors to the round include AlphaCode and Digital Currency Group.

Luno was originally founded in 2013 as BitX, but rebranded in January. At the same time, the startup also announced that it had joined the regulatory sandbox supervised by the Financial Conduct Authority, one of the U.K.’s financial markets regulators.

In statements, the startup said that it would use the funds to continue developing its mobile app and services, as well as expanding to new markets.

“Enabling more people in Europe to have access to these products and services is a critical part of our mission to bring digital currencies to everyone, everywhere – and in a way that makes everyone’s journey into the world of digital currency safe, super easy, and highly enjoyable,” said Marcus Swanepoel, Luno’s co-founder and CEO.

Luno currently serves customers in Indonesia, Malaysia, Nigeria, South Africa and the U.K.

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Luno. 

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Actor Jamie Foxx Promotes Crypto Exchange ICO

Actor Jamie Foxx Promotes Crypto Exchange ICO

Yet another celebrity has entered the cryptocurrency promotion fray, with Academy Award winner Jamie Foxx promoting an upcoming initial coin offering (ICO).

In a post on Twitter, Foxx promoted the token sale for Cobinhood, which is being advertised as a zero-fee cryptocurrency exchange. That sale is currently underway, according to its website, netting about 17,840 ethers (worth roughly $5.1 million at press time) to date.

The promotion suggests that the spate of celebrity endorsements for cryptocurrency-related projects isn’t slowing down anytime soon. As previously reported, celebrities such as boxing champion Floyd Mayweather, Jr., socialite Paris Hilton and rap artist The Game have promoted upcoming or now-completed token sales.

To date, more than $1.8 billion has been raised through the funding model, according to data from CoinDesk’s ICO Tracker.

Image Credit: Featureflash Photo Agency /

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Survey: Younger Americans More Likely to Invest in Bitcoin

Survey: Younger Americans More Likely to Invest in Bitcoin

New survey data from online student loan marketplace LendEDU suggests that younger consumers in the United States are more interested in investing in bitcoin.

The startup published the results of its survey today, which was conducted online in August and drew 1,000 participants from around the US. The survey focused on a number of areas, including a basic question about whether they’ve heard of bitcoin at all. As it turns out, roughly 78% of respondents said they had.

Among the notable findings in the LendEDU survey is that, according to the data, younger consumers – those between the ages of 18 and 34, showed more willingness to invest in bitcoin than older age groups.

Of those between the ages of 18 and 24, 35.9% said they plan on investing in bitcoin, versus 43.5% who said no and 20.5% who weren’t sure. For the 25-34 age group, the “yes” figure grew to 40.4%, with 31.7% of respondents in that demographic saying no.

By comparison, just over 10% of those between the ages of 45 and 54 indicated an interest in investing in bitcoin. Less than 5% of those over the age of 55 expressed the same sentiment, the survey data shows.

In a blog post detailing the results, LendEDU predicted that this data foreshadows a greater role for bitcoin among younger consumers.

“Judging from this data, as the years go by and younger Americans develop more spending power, you can expect bitcoin to become more and more prevalent in the American economy,” the company said.

Image via Shutterstock

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

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SEC Advisory Committee to Discuss Blockchain’s Investor Impact

SEC Advisory Committee to Discuss Blockchain’s Investor Impact

The US Securities and Exchange Commission (SEC)’s investor advisory committee is set to discuss blockchain at an event next month.

According to a newly published notice, the meeting – set for October 12 – will feature “a discussion regarding blockchain and other distributed ledger technology and implications for securities markets”. No other details, including the speakers that may attend or the specific issues that may be raised, are known at this time.

The gathering represents the latest public hearing hosted by a part of the US government that is dedicated, at least in part, to blockchain. The US Treasury Department hosted an event in January, focused on the ramifications of blockchain for the insurance market. Other agencies, including the CFTC, have held their own hearings on the topic as well.

What remains to be seen is whether any of the recent SEC actions will be raised during the meeting. For example, at the end of July, the agency released the findings of its investigation into The DAO, the ethereum-based funding vehicle that collapsed last year, as well as its broader determination that some tokens sold via initial coin offering (ICO) constitute securities.

As with past public hearings, the SEC will be live-streaming the event on its website for those unable to attend.

Image via Shutterstock

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CoinReport Digital assets almost 20x more lucrative than stocks, property, gold combined: CoinDesk Report

Cryptomarkets week in reviewCoinDesk, the world’s leading digital assets and blockchain news website, announced in a report CoinReport received from PR firm Wachsman PR the release of the website’s comprehensive, quarterly research report, The State of Blockchain Report, for Q2 2017. The report saw digital assets outperform conventional assets by almost twenty times.

The quarterly Reports by CoinDesk have been commonly regarded as a leading authority on blockchain trends and analysis since their first issuance after Q1 2016. The Q2 2017 Report highlights that year-over-year returns on worldwide real estate (3.2%), gold (7.7%), US equities (9.2%) and worldwide equities (14.7%) pale in comparison to returns on bitcoin (150.6%) and all digital assets (445%).

The 115-page report breaks down the historic surge in digital currency across April, May and June, including statistics on transaction numbers, fees, research and development, token value propositions, ICOs, enterprise adoption, industry challenges and regulation.

CoinDesk director of research Nolan Bauerle commented in the release we received, “This quarter’s State of Blockchain Report is remarkably eye-opening. Blockchain and digital assets are already solving real-world problems in business, government, technology, and finance, and its impact on markets has been extraordinary. At the end of Q1, the total cryptocurrency market cap was valued at $23 billion USD, and largely due to ICOs, the total market cap for digital assets hit $109 billion USD by the end of Q2.”

CoinDesk CEO Kevin Worth stated, “The State of the Blockchain report dispels common myths and uncertainty surrounding blockchain through facts and exhaustive research from the top analysts in the space. The statistics in the Q2 report speak for themselves; enterprise and institutions are taking this asset class seriously and investor confidence is climbing exponentially. In Q2 alone, blockchain token sales raised a combined $797 million USD, three times that of venture capital’s $235 million USD investment in blockchain companies.”

The Report also provides details for various industry records. At more than half a million per day, Q2 2017 saw the largest amount of collective blockchain transactions ever, while bitcoin’s total market capitalization doubled. Moreover, worldwide digital asset exchanges reported record trading volumes during the quarter, and returns for numerous ICO tokens since inception were historic, including Augur (4,583% returns), Golem (4,700% returns), ICONOMI (2,862% returns), Melonport (1,136% returns), First Blood (2,667% returns), Digix (2,393% returns) and SingularDTV (1,033% returns).

This quarter, however, was not without some industry challenges. Transaction fees quadrupled from 62 cents in Q1 to $2.40 in Q2 due to extensively publicized network overcrowding issues of bitcoin. At the same time, Ethereum’s transaction fees rose by 918%. Additionally, in a blockchain sentiment study, more than 72% of the sample users pointed bitcoin mining is too centralized, while 95% suggested ICO issuers should not convert funds raised into fiat currency.

“There will always be growing pains in an industry that added a billion dollars a day in value across Q2. Solutions are being worked on for blockchain backlogs, transaction capacities, and reducing fees. The technology is advancing quickly and we are confident the industry will continue to boom. Regulation appears to be clearing up in Europe and Asia, while new guidelines are being instituted within the United States,” stated Bauerle.

The full Report can be downloaded on (here). The news website has also provided, as a new service, the ICO tracker that tracks the amount of funds raised each month.

Image – File photo

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