Understanding What an ICO Is And Why Government Wants to Regulate It

Understanding What an ICO Is And Why Government Wants to Regulate It

It would appear that on planet crypto, ICOs are currently the flavor of the month, perhaps also of the season. With each passing day, a new ICO is announced and they have now become ubiquitous across all forms of media. Coinidol writers, for example, receive information on at least one new ICO every day.

With so much variety to choose from, any investor would be right to ask how to go about picking a viable ICO, and avoid falling into the hands of the scammers who litter the crypto landscape. So how does one know which ICO to invest in? Before we can answer that question, we would benefit by understanding what ICOs are.

ICOs Defined

ICO stands for Initial Coin Offering. If you understand the concept of an IPO or Initial Public Offering, then it would not be too hard to understand what an ICO is. In an IPO, an investor purchases shares or stock that represent fractional ownership in a corporation. Investors in an IPO do so hoping that the value of their shares would eventually appreciate. The same applies to investors in a cryptocurrency unit, or coin.

The point of departure is in the fact that ICOs are coupons based on the blockchain. They are also, at present, unregulated in many jurisdictions. Some ICOs are based on the public blockchain while others issue from a private, and in many cases, permissioned blockchain. An issuer of an ICO will often publish a white paper, which serves as a prospectus on why investors should participate in his token sale. To date, ICOs have been able to soak up $1 billion in investment. Half of that money has been shelled out in 2017 alone.

At the present time, no regulator in the West has announced any plans to regulate ICOs as a separate category. At best, many regulators have been issuing warnings and applying current laws to the new fintech paradigm. China however has already moved aggressively to shut down ICOs from operating in its territory.

Expert Views on China’s Exchange Shutdown

Journalists at Coinidol sought expert views on ICOs and their implications from Professor Irwin Stein. He is the Founder and Legal Advisor at Syndicate Path with more than 40 years experience in securities and real estate. We also interviewed Mr William Michael Cunningham, Founder at Creative Investment Research Inc, a firm based in the Washington DC Metro Area, who also has more than 26 years experience in investment research.

Professor Irwin Stein

In Professor Stein’s view, China is 

“correct to clamp down and expect that other jurisdictions will clamp down on ICOs and token exchanges as well.”

He further added that the “overriding” consideration for regulators was the “huge amount of illicit money being laundered and moved across borders via tokens.”

Mr Cunningham saw it as China running scared from ICOs and Bitcoin. He considers China as an economy that is “poised to take over the financial system” and hence had the most to lose from the rise of ICOs and cryptocurrency in general.

How to Regulate ICOs

On regulation, both agreed that they would like to see some type of oversight. Professor Stein holds the view that the anonymity of inherent in the crypto space is what encourages money laundering and the theft that is common in the cryptocurrency space.

Mr Cunningham views the current approach being taken by the SEC on ICO regulation as the wrong one. On July 25th, 2017 the SEC issued
a report which among other things “reiterates these fundamental principles of the U.S. federal securities laws and describes their applicability to a new paradigm.” What this means is that ICO tokens would be treated as securities and those who issue them would be required to register as securities exchanges.

William Michael Cunningham

a post he argues that this approach is wrong since it fails to take into account the “nature of the technology” which would win out in the end. He prefers that the SEC establishes a global database of ICOs. According to him, there is a precedent. In 1984, the SEC began collecting data on hedge funds via a system known as
EDGAR. This platform is freely accessible online.

He explains,

“At this point in the development of this marketplace, having a comprehensive database of all ICOs is more valuable and appropriate than subjecting these new firms to full and complete SEC registration. The agency can revisit this in, say, a year or two to determine if more comprehensive regulation is required, but for the next six to twelve months, this should be the regulatory position of the SEC with respect to the new ICO marketplace.”

Mr Cunningham believes that the current approach the SEC is adopting is more geared to protecting “entrenched social and financial interests.” He also believes that there are certain niches that would benefit by raising capital via ICOs. Small and minority owned businesses that may sometimes not be adequately funded, could benefit from the ICO option. Professor Stein disagrees. He would prefer to look at the underlying business rather than just invest in ICOs which he believes to be a gimmick. He insists that he would “not invest $1” in an ICO. He has his reasons which are,

“Very few people with backgrounds in finance doing ICOs to help to structure them correctly, protect investors and maximize investor returns.” 

It appears then that we have some way to go before we can have a regulatory environment that protects investors from scams but that still promotes growth in blockchain and cryptocurrency. As regulators move away from adapting antiquated paradigms to emerging technology it can only be hoped that actions will be taken to fully harness the potential of the blockchain.

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But What About House Prices?

But What About House Prices?

In a decision that would send shockwaves across the financial markets, the United Kingdom voted to leave the European Union by 52% to 48% on the 23rd of June 2016.

The impact of the decision has been much debated, with many economists stating that the UK economy would be harmed by a decision to leave, whether that’s through a loss of cheap labour that powers the fruit picking industry or the restriction of movement for those in the Square Mile. Some also point to the extra red tape and bureaucracy that would be necessary for businesses to operate in the single market once Britain leaves.

But in the last 12 months, what has actually happened? Has the economy contracted?

One of the best ways to gauge the impact of any decision affecting the wider UK economy is to look at how house prices are rising or contracting. House prices are essentially a measure of how much people are willing to pay for a home and how much they can afford. Economic metrics such as GDP growth and immigration and emigration figures tend to broadly correlate.

Because of the role that house prices would play, estate agents YOPA gathered a number of predictions from various industry experts in January 2017 to make predictions about what would happen over the course of the year. From these averages, a 1.2% growth figure emerged.

The reality, however, is looking very different.

So far, prices have risen by 3.8%. That’s a huge figure that has outpaced industry estimates from the beginning of the year, and if that rate of change continues, house prices by the end of the year will have risen by more than 7%.

But what has changed?

The United Kingdom is still a member of the European Union and, as a consequence, is still a member of the customs union, the single market and everything else that affects day-to-day life and trading with the European Union, and because nothing has really been agreed – as far as business is concerned – many companies are still preparing for an uncertain future. Even free movement is in effect until March 2019, and it seems plausible that a transitional deal will be made to extend it. 

So far, the financial and currency markets have reacted to Brexit with caution, following the immediate volatility of the pound. However, it’s worth remembering that the full impact of Brexit hasn’t been felt yet, and tracking house prices is a good way to see how consumers are spending. Be sure to bookmark this
Brexit house price tool to keep up to date with the latest figures.


About author

Ben Johnson is a freelance writer based in Devon. With a degree in International Politics and having worked previously at Rightmove, Ben has a particular interest in how Brexit is impacting both the UK and the wider European economies.

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Left Hook To Bitcoin Price from the Head of JPMorgan

Left Hook To Bitcoin Price from the Head of JPMorgan

Bitcoin’s price managed to stand strongly against the punch from the authorities of China, who have banned ICOs, but another left hook from the head of JPMorgan Chase & Co., Jamie Dimon, who called cryptocurrencies a “fraud”, has drawn Bitcoin down sharply.

Jamie Dimon, speaking at the Barclays financial conference in New York, was very aggressive towards Bitcoin and bank workers who are interested in cryptocurrency trades. He actually
said that he would immediately dismiss anyone in a bank for trading in bitcoin, calling it stupid and a dangerous thing to do.

He further

“Honestly, I am just shocked that anyone can’t see it for what it is.”

Moreover, according to Jamie Dimon, cryptocurrencies like Bitcoin are primarily used by people from “Venezuela or Ecuador or North Korea or a bunch of parts like that, or if you were a drug dealer, a murderer, stuff like that, you are better off doing it in bitcoin than US dollars.” That is why the cryptocurrency market is limited.

Bitcoin price falls

The bitcoin price fell almost 5.6% to $3,953. This is the first time since August 22 that Bitcoin has fallen below the level of $4,000.

Bitcoin price, September 13, 2017

The beginning of September was very successful for Bitcoin. The price managed to jump to a new all time maximum of $4,957 and even $5,000 on some exchanges on September 2. After corrections, the Bitcoin price was holding on a level between $4,800 and $4,900 for a couple of days. 

The report of a ban on all ICOs in China on September 4 affected the prices of all popular cryptocurrencies, just like the information of a possible ban of cryptocurrency exchanges in China on September 8. Both these reports have drawn Bitcoin to $4,000, however, it succeeded in not falling lower. Until now.

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UK’s Financial Watchdog Releases Warning of ICO Risks

UK’s Financial Watchdog Releases Warning of ICO Risks

The Financial Conduct Authority (FCA), a financial regulatory watchdog in the United Kingdom, has today released a warning about the risks of Initial Coin Offerings (‘ICOs’), stating that ICO investors must be aware of the possibility to lose an ‘entire stake’.

2016 was a year of huge ICOs, and 2017 looks set to beat it hands down.  The ICO boom worldwide leads more financial regulatory authorities to release notes on token sales. Most of them, warn about the high volatility of cryptocurrencies, the lack of regulation in the field and that there is mostly no protection for investors. Similar warnings have already been published by authorities in the US, Canada and Singapore, while last week China even banned all ICOs in the country starting September 4.

In the consumer warning, published on September 12, the FCA
states that:

“ICOs are very high-risk, speculative investments.
You should be conscious of the risks involved (highlighted below) and fully research the specific project if you are thinking about buying digital tokens. You should only invest in an ICO project if you are an experienced investor, confident in the quality of the ICO project itself (e.g. business plan, technology, people involved) and prepared to lose your entire stake.”

Double check before investing

Investors should always do their own research before investing funds in any company. In June 2017, conducted an exclusive interview with Blockchain lawyer and crowd investment blockchain startup co-founder, Alejandro Gómez de la Cruz, to highlight the details of major market players and give an overview of the ICO market. He commented on the main problems faced by the ICO market, that investors should be aware of:

“First, the code: ICOs require complex developments.  Second is timing. This process usually takes between 3 to 5 months. During this period, the whole team of the company is focused on the fundraising instead of the project. Third, user experience and investment tools. Nowadays, investing in ICOs is a complex business.
User experience is the biggest deal, given that most dapps interfaces are complex and non-intuitive. In this sense, the market needs to evolve. Some technical limitations are to be addressed when trying to engage new users that are not familiar with blockchain, such as:
How to invest with legal tender. Are stablecoins ready for production environments?
How to design the platform to let users invest with no complex key management in a secure way?
How users can interact with the platform from different devices.”

Coinidol has already published several cases where ICOs founders failed to lead their projects to success. Soon after the launch of its ICO, CoinDash has announced losses of over $7 million in Ether due to a hacker attack.

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China Planning a War Against Cryptocurrency Trades

China Planning a War Against Cryptocurrency Trades

A week before ago Central bank banned ICO, and now, Chinese news reports another tough decision from local authorities – to close cryptocurrency exchanges in China.

A punch in the face for cryptocurrencies

The reports about a possible war against cryptocurrency exchanges in China have driven popular cryptocurrencies down. On September 8, when local news media outlet
Caixin reported about the closure of trades and exchanges between virtual currency and fiat in China, the Bitcoin price fell sharply from around $4,600 to $4,100. On September 10, Bitcoin price moved even  further to $4,000.

Cryptocurrency price, September

Monday, September 11, Bitcoin price shows signs of recovery and holds on to a level above $4,100 per BTC.

Bitcoin price, September 11, 2017

China’s authorities seem to be continuing their war against cryptocurrencies. Every decision made in China always influences heavily the prices of popular coins. A notice from the Banking Regulatory Committee led by the People’s Bank of China announced on September 4 an immediate ban on ICOs.

Until now, about a ¼ of all Bitcoin trades were processed in China, but new legislation, if accepted, may change that situation. Zhou Shuoji, a Beijing-based founding partner at FBG Capital, said to

“Trading volume would definitely shrink. Old users will definitely still trade, but the entry threshold for new users is now very high. This will definitely slow the development of cryptocurrencies in China.”

However, cryptocurrencies are not banned in China, only trades and ICOs. At least, for now. 

The biggest cryptocurrency exchanges in China – OKCoin, BTC China and Huobi – said on Monday that they hadn’t received any regulatory notices concerning bans on cryptocurrency trading.

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The Future of Blockchain Tech and Cryptocurrencies Discussed at Eastern Economic Forum

The Future of Blockchain Tech and Cryptocurrencies Discussed at Eastern Economic Forum

Blockchain technology attracts the attention of the world’s economic leaders. The Eastern Economic Forum, 2017, last week dedicated a full session to Blockchain and new technologies in the financial sector of the Asia-Pacific region. gives a short review of the Blockchain section of
Eastern Economic Forum that took place in Vladivostok, Russia.

At the Eastern Economic Forum, experts from all over the world discussed the possible uses of Blockchain and advantages that it can bring to the development of modern economics.  According to them, the understanding of Blockchain and DLT in Russia is growing, however, there are still a lot of issues that should be defined by the government and businesses.

According to a survey taken at the Eastern Economic Forum, a majority of participants in the section dedicated to Blockchain technology believe that the most important issue today is to set clear regulatory guidelines for both cryptocurrencies and Blockchain-related businesses.

Boris Titov, Presidential Commissioner of the Russian Federation for the Protection of Entrepreneurs’ Rights, stated that Blockchain will change the world and may have an even greater potential than the Internet. He said:

“Today we can’t define what will be the scope of use of Blockchain technology.”

Future of Blockchain based national cryptocurrencies

Alexander Borodich, the Founder of Universal Blockchain Platform in Russia, pointed out that today the use of Blockchain technology is not only cryptocurrency but also various of other fields of use. Such as personal verification, the possibility of tracing any product from the manufacturing stage to the point of sale or even, if the product was broken, it allows us to find out what was done wrong at the production stage, to eliminate similar defects in the future.

He said that new Blockchains allow registering more transactions per second (starting at 10,000 per second) than Bitcoin’s Blockchain that has up to 7 transactions per second. New faster Blockchains will lead the future of FinTech worldwide. Such Blockchains can be used by governments to issue their own cryptocurrencies, backed by the government and resources. This may totally change the existing world’s economics and finance industry.

Cryptocurrency and ICO regulation

Boris Titov stated that today authorities must define three main regulatory issues interconnected with Blockchain technology and cryptocurrency:

“We don’t know all the aspect of the development of [Blockchain-related] field in the future, that is why we must move very carefully. First, the regulation that would allow storing and exchanging cryptocurrencies. Japan has already done it. It means a development of regulations that would minimize risks to investors but limits its [use] in the regions. Similar regulatory we have with the foreign currencies: citizens may store it, exchange it but can’t use it as a payment method on the domestic market. We pay for a taxi, buy products in a local shop or set business contracts with other residents of Russia using only national currency.”

Boris Titov also mentioned that most of his colleagues agree with this positions. It also means that
restaurant businesses in Russia that have already started accepting cryptocurrencies will have to follow the regulation when it is taken. This would also require stepping away from the anonymity of the crypto wallets, all data should be transparent, and more over it will mean new requirements to cryptocurrency exchanges.

Boris Titov, EEF

He continued:

“Secondly, we believe that mining should be allowed and regulated in Russia. Especially the question of the taxes. Today, our new mining company allows us to place mining chips – special security chips – into mining rigs that would automatically take [tax] percentages in the currency that is mined, like Bitcoin, to the government accounts instantly.”

According to Boris Titov, the third regulatory question is ICO and investments from abroad. There are no sanctions on ICO and it should be used. He said:

“We must legalize ICO. China has banned ICO and the US decided that ICO must be regulated as traditional IPO, but we believe that it is wrong. The requirements that are now placed on IPOs are excessive. In past years the world has set too many requirements to IPO that today are actually excessive but doesn’t guarantee the avoidance of risks.”

He stated that the requirements to ICO should be first focused on the verification of the token issuer. Also, the personal and corporate risks of the company issuer should be transparent. But the questions of the projects recoupment and other requirements that are used to IPO should not be used to ICO today.

Blockchain popularity in Russia

Direct investments in this area have recently exceeded $2 billion USD, in more than 500 companies. Russia is now facing a boom of cryptocurrency mining and Blockchain startups number growth.

Sergey Gorkov, Chairman of the Bank for Development and Foreign Economic Affairs (Vnesheconombank), believes that the cryptocurrency and mining trend that we observe now plays a positive role in the further development of the Blockchain technology. Today, even 14-17 years old teenagers actively participate in workshops and hackathons, and manage to propose interesting Blockchain-based projects.  However, the process in yet not enough fast and is far away from the mass adoption, and exactly cryptocurrencies will play the role of an impulse for further development of Blockchain technology.

EEF, 2017

The speed of transactions is still a question

Today world’s major banks and IT industry giants launch more projects on Blockchain and DTL, stated Antonio Fallico — President, Conoscere Eurasia Association; Chairman, Board of Directors, Banca Intesa. However, he pointed out that banks still are not satisfied with the speed of transactions using popular Blockchain (like Bitcoin and Ethereum) and have a lot of questions about the privacy of transactions. The question of regulatory is also still not clear in most of the countries, which showers the development of FinTech field.

Russian largest bank implementing Blockchain

The development of new Blockchains and new standards for DTL technology is one of the key issues today stated Igor Bulantsev, Senior Vice-Presiden of Sberbank and a Head of Sberbank CIB, confirmed that Sberbank works on about 20 Blockchain-related pilot projects at the moment. 

Sberbank has already tested several pilot projects. In June, Sberbank and steel and mining company “Severstal” have successfully used Blockchain technology to conduct international letter of credit transactions while last year Sberbank and the Russian Federal Antimonopoly Service (FAS) have launched a pilot project of Digital Ecosystem for document transactions based on Blockchain technology.

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Bitcoin, Cherch of Blerk, and Brave Volunteers Connect During the Destruction of Hurricane Harvey

Bitcoin, Cherch of Blerk, and Brave Volunteers Connect During the Destruction of Hurricane Harvey

The International Cherch of Blerk (IOCB) is a fully registered crypto-based 501c3 and recognized religion. It is a revolution in peer-to-peer charitable giving and volunteer work using cryptocurrency to give aid where needed during times of crisis.

CoinIdol interviewed Cherch of Blerk Founder and Executive Director, who is also an Attorney, Jason Seibert along with Dr. Rhiana Ireland, an Emergency doctor with an emphasis on EMS and Pediatric Emergency Medicine. Jason Seibert describes how the organization emerged and why Bitcoin is an integral part of its operation. 

“This organization was formed at the beginning of August, but it has been in the planning phase for over a year. There are many people that want to do good, but they don’t want to be affiliated with traditional systems – they wanted something that fit them. People want to know that their charitable giving is going to those that need it – what we call Boots on the Ground giving. We don’t do anything without having eyes on the scene to determine the most impact we can make for the situation. For those that like that kind of thinking, BLERK fits them as a charity. If you wish to believe in our religion, Blockchain, great, if not – it doesn’t matter, those that receive the help don’t care if you believe or not. 

Blerk’s model, as an actual religion and registered 501c3 means that the activities of the organization, donations to it, and the eventual mining and currency activities, will all benefit the users of the network as a vehicle for doing good, but will also provide those incentives to give that traditional organizations like the Red Cross enjoy. 

We had a man two days ago that made a large cash donation, but he wanted to make certain that we were truly a real organization (funny name, serious works). I delivered our Texas formation documents and the IRS letter with our Tax ID number on it, and he handed over cash for us to deploy to Port Aransas and Rockport. This is real. 

Bitcoin/Cryptocurrency adds a unique layer of flexibility, speed, and accountability that traditional FIAT systems just can’t provide. With Crypto, we can put boots on the ground without having to ship anything but a human being and a cell phone. Once that point person is on the ground, they survey the scene, make a wish list, and crypto pours into their phone. Working with local exchangers, that crypto can be quickly converted to local FIAT for supplies, services, and goods to get things moving as quickly as possible without the need for lengthy customs checks at the docks, or paperwork that prevents action from happening in the disaster phase.” 

Jason Seibert

International Cherch of Blerk Delivers 

CoinIdol asked Dr. Rhiana Ireland how long she’s been an Emergency physician, what her role is within the ICOB, and how this organization was vital during the Hurricane Harvey crisis and its aftermath. 

“I have been in Emergency Medicine for 11 years. I trained in South Central Los Angeles with a heavy emphasis on EMS and Pediatric Emergency Medicine. From there I was the Pediatric ER attending in East Los Angeles, prior to moving to Texas. I have worked for various agencies here in Texas responsible for disaster response and Ebola readiness for East Texas. I currently work at St Michaels ER in Sugarland, Texas. 

I work with ICOB as the Medical Director and Disaster Coordinator. Each disaster is different, sometimes my work involved being the medical director at the shelter clinics directly treating patients, other times I have been meeting with city and county leadership at the Emergency Operations Center. 

ICOB was vital during Hurricane Harvey. League City Texas had only one shelter for over 100,000 residents and it quickly became overwhelmed with evacuees. The Red Cross had only 3 volunteers in the shelter none of which had any management experience in mass casualty situations. The shelter took all evacuees, many of which had major medical conditions that required immediate medical assistance. There were two pregnant patients both of which due to deliver in less than two weeks, postoperative patients with surgical wounds contaminated by flood waters, and asthmatics who needed immediate breathing treatment. Ambulances were unable to respond due to high call volume and unable to transport patients due to flood water causing hospital evacuations. Without ICOB and the medical supplies we brought, these patients could have died. 

One of the reasons I became involved with Cherch of Blerk is because they believe in having ‘boots on the ground’ during disasters. This means that our members are at the disaster site determining actual needs rather than depending on second or third-hand information. One of the difficulties in Hurricane Harvey was the multiple rumors that spread throughout the shelters, inciting panic. Evacuees heard that levees had been breached and that the water had been tainted. By being there with city leaders we were able to get accurate information and then dispel those rumors.” 

Dr. Rhiana Ireland

Coordinating Disaster Relief 

CoinIdol inquired about his role as the Cherch of Blerk Executive Director and Bitcoin Attorney during the Hurricane Harvey crisis and its aftermath. Surprisingly candid, Seibert explains that he wore many hats during this emergency crisis. 

“Nobody wants an attorney when their house is flooded, they are cold and wet, and don’t know where they are going to sleep. I wore multiple hats. For the most part, I was in the kitchen! I worked with local leadership to let them know I was available, but they didn’t have anyone during the disaster that could coordinate the acquisition, logistics, and protocols to run a disaster kitchen. Dr. Ireland ran the medical and EMS services side; I ran the food and logistics side. I did have to be a lawyer from time to time to resolve conflicts between the Red Cross and local nurses, as well as the Red Cross and shelter leadership, which is unfortunate. The Red Cross has their way of doing things that may be good for a single-family house fire, but as for huge disasters – they really don’t have the training on the ground and in place to handle the situation. It’s been a real eye opener at just how unorganized and incapable the Red Cross is.” 

When CoinIdol asked about how challenging it was to coordinate and create several shelters in Galveston County, Texas along with producing nearly 12,000 meals for four shelters, Seibert shares how the community collaborated by volunteering in the midst of this tragedy. 

“The volunteer effort in the community was amazing. There is a time in any massive effort where you really have to step back and let others serve. For example, T-Bone Tom’s, a local BBQ place made famous by the Food Network, showed up and cooked outside in the storm for 13 hours to make chicken and sausage. A local seafood supplier provided a refrigerated truck so we could keep all the food cold until it was time to prep for meals, members of the community poured in dried goods and supplies. We never had a shortage of volunteers. 

As for victims of the flood – they absolutely wanted to help, but we had enough volunteers that were not impacted so there was no need, and frankly, that was ideal. Flood victims are exposed to all kinds of bacteria and contaminants. We ran a full infectious disease and contamination protocol out of the kitchen. It would be hard to keep those protocols if Uncle Harvey walked into the kitchen to help, covered in raw sewage.” 

Dr. Ireland adds, “The community was amazing. I began posting live feeds from the shelter and as soon as people became aware they showed up to help. People put their entire lives on hold to bring in supplies, dry off hypothermic patients and began pushing out hot meals for hungry evacuees. Money is important in a disaster, but so is someone being there for you, getting you out of wet clothes and bringing you a hot meal. Our community was lucky however, we took primarily flood damage and retained city services. ICOB went to the eye of the storm in Rockport, Texas and no part of the town remained unscathed. The city has no working sewage, power, or cell phone communications which create so many hardships for the citizens who are trying to bounce back.” 

Red Cross Falls Short 

Seibert shared with CoinIdol the effort of Blerk’s volunteers and Dr. Ireland as they assisted in advising local officials on how to proceed during the crisis. Seibert explains that the lack of experienced help from the Red Cross was glaring at this crucial time during which Houston was being inundated by flooding and disastrous winds from Hurricane Harvey. 

“Dr. Ireland is a fully trained Emergency Room Doctor who trains EMS on situations just like this. She was instrumental in getting facilities open, maintaining calm in leadership by having a structured plan to open and close shelters, getting families the help they needed, and, when necessary, being the bad guy by telling shelter residents it was time to leave for their next destination. As a lawyer, when I wasn’t cooking, I advised leadership on their liability in the numerous facilities, best practices under good Samaritan laws, and how to proceed in a humane way while still accomplishing the mission. 

The Red Cross claims they were cut off by the storm. As a fraud lawyer, I’m not sure I’m inclined to believe them; however, that’s really not for us to decide. The truth is the young man from the Red Cross that was running the Bay Harbor Shelter, the only ‘Red Cross’ shelter in the area, was untrained, overwhelmed and completely unprepared. There were two other volunteers from the Red Cross that tried to step up, but they had little experience as well. Bay Harbor is a church, and through Blerk’s advice and strategies, they quickly took back control of their facility and flourished while serving the community. They did a great job.” 

Dr. Ireland explained her first-hand experience with the initial Red Cross response. “The initial Red Cross response was inadequate to the scale of the disaster and I cannot say exactly why that was. We know that the Bay Harbor United Methodist Church initially was told they would have 16 volunteers and only take in 100 evacuees. On day one of the disaster only 3 volunteers came to the shelter and the church took in over 700 evacuees. The Red Cross has been plagued with scandals in recent years regarding their handling of disasters and the ProPublica and NPR series on them from a few years ago may give more detail as to the problems with the institution. 

We had well over 50 volunteers between the 4 shelters I helped manage. Some people provided direct care, some donated medical equipment from their own practices and medical supplies.

The HEB in League City, before being flooded out, was able to get us medications free of charge from their pharmacy. I am indebted to them for all of their help.” 

Bitcoin To The Rescue 

Seibert disclosed to CoinIdol how difficult it was to get supplies during the crisis and what challenges the team faced after Blerk’s truck died. 

“Scrounging for supplies was tough at first, but the community response was amazing. We quickly figured out that there was no magic truck of food and supplies coming from the government or the Red Cross. A local grocer was still open. With the limited funds Blerk had (we just opened!) and with community volunteers, we rounded up ‘high profile’ vehicles and made a grocery run after grocery run and filled the refrigerated truck with as many supplies as we could, knowing we were going to have to hang on for at least five days. Also, members of the community made direct donations by purchasing thousands of dollars of food as well. Tookies Seafood and T-Bone Toms were great examples of that. 

As for Blerk’s truck, it was a true champion. It crossed many flooded roads and access ways to get medical supplies, food, and personnel to multiple needed destinations. After it suffered damage from debris, and water in the systems while making one last crossing, our ability to keep medical supplies and food moving was severely limited.” 

Seibert reveals to CoinIdol how Bitcoin played a major role in the solution. 

“We needed another truck. The supply of trucks in the Houston area after the flooding was pretty limited. I put out a call on social media for anyone that knew of an available truck. After calling around, we found the perfect vehicle, a diesel 4×4 chevy truck with a crew cab. It was 70 miles away on the north side of Houston and we were on the south side. After working with the dealer to secure the truck, I realized we didn’t have enough funds in the Blerk coffers to make it happen, I had to make another donation from my own funds. 

I contacted Rob Gonzalez in Dallas (registered FinCEN MSB), and asked him if he could liquidate my assets and wire transfer those funds to the dealer. Rob said, ‘No problem. Oh – wait… it’s after 3 pm on Friday and the banks won’t be open until Tuesday because of the holiday.’ Okay – we switched to cash. Rob worked with another FinCEN broker, Jesse Wilkinson, to get cash on the road and in the dealer’s hands in under four hours. I drove the truck off the lot that night – of course, I had to ride my motorcycle through an awkward route through Houston (flooding), and then load the bike in the back of the truck for the return trip to League City, but it all worked out. If I had to rely on a bank, we would have been shut down for the entire weekend. As a result, we were able to get over to Port Aransas and Rockport (ground zero) and deliver direct aid to the front lines in the form of monetary support and supplies.

Dr. Ireland continues, “Bitcoin has helped the relief efforts by allowing us to rapidly scale up as the disaster presented itself. We lost equipment during the hurricane and were not nimble enough to allow us to buy things late at night and during the weekend. Banking hours are fixed but a hurricane doesn’t care about that. Bitcoin is a 24-hour currency for a 24-hour disaster.” 

How Boots on the Ground, Cherch of Blerk, and Responsive Bitcoin in Crisis Mode Saved People 

Discussing the challenges of this flooding disaster, Seibert explains how each crisis is different and how innovation and personal effort are key as the government and Red Cross did not save them. Lessons learned will be used for future experiences such as another disastrous hurricane. 

“Each disaster is different. Each situation is different. That’s why boots on the ground and targeted efforts are so important. We’ve already been asked to try to find medical supplies and sleeping cots (of all things) in advance of Hurricane Irma.” 

As the Cherch of Blerk founder, Seibert reflects on what he has learned from their first disaster. “I formed the Cherch of Blerk, so I guess it makes sense that I’m the Executive Director. I’ve learned that if you are going to wait around for the government to save you, that’s a long wait for something that’s not going to happen.” 

The coordination success of Blerk’s efforts differs from other crises Seibert has been involved in. “It took folks a bit to get used to the idea that someone, where a shirt said “Cherch of Blerk” on it, was an expert on anything. After that barrier was gone, everyone got down to work.” Though the Cherch of Blerk is a registered religion, the word “Cherch” is spelled this way out of respect for more traditional faiths that use “church.” Blerk is at the core of how this religion is defined: BeLiEve in Random Kindness. 

Dr. Ireland also reflects on the inspiration of volunteering during this crisis and people helping each other during a momentous time of need. “I will never forget the enormity of this disaster. It is awe inspiring to see a helicopter, the national guard Humvees and giant dump trucks filled with people just trying to escape from the storm. I remember standing in the rain as a city dump truck arrived with the back loaded with people and pets soaked to the bone in the rain. People were handing us all their worldly possessions, their entire lives in trash bags, passing us their children just needing someone to shelter them from the storm. 

Without Bay Harbor Church, people would have died. It was able to withstand the flood and was the staging ground for food, warmth, and medicine. The volunteers’ generosity prevented the church leaders from getting overwhelmed and allowed them to continue working problems in real time to allow us to scale up to meet the needs of the disaster. Government is good at handling many parts of national disasters but in the beginning, it is volunteers and the community who puts itself in harms’ way to take care of each other.
As a result of this experience, Seibert respects the power of Bitcoin even more and realizes how it can benefit future charitable organizations and causes during times of crisis. 

“We didn’t fully use the power of Bitcoin in this disaster response. We only scratched the surface. We hope to get the token launched (which we delayed so we could focus on Harvey efforts) so we can get our software and services ramped up and out the door. We have so many great ideas based on the lessons learned from this and other disasters. 

But our uses are not limited to just the software side, we are using innovations in hardware as well. We are using lessons in high-density rack design, based on mining equipment, to recalculate power consumption to configure lithium batteries more efficiently to power field refrigerators for medical supplies. Yep – read that last sentence again. Just awesome. Bitcoin mining tech revolutionizes medical delivery. It’s awesome.” 

Hurricane Harvey

Value of the Human Spirit and Lessons Learned from Collective Collaborative Creativity 

CoinIdol asks Jason Seibert and Dr. Rhiana Ireland what lessons they learned from collaborating and operating during a real-time disaster such as Hurricane Harvey. 

“The biggest lesson I learned was that ‘ignorance is the demon.’ There was a time when I was really tired. I think I had been up for 3 days, we were slammed, nobody knew if or when the flooding would stop. I got word that a man on dialysis had been discharged from a hospital and was at the front of the shelter. The shelter had to turn him away and they had no idea where to send him. It was only a matter of time before he would die. 

We always had hot chicken and rice soup on the stove for anyone that walked in the door. I grabbed a bowl and a slice of bread, a few bottles of water and walked it up front myself. The man was frail and hunched over in his wheelchair. I placed the bowl in front of him and he looked up at me and smiled. I shook his hand. I walked back into the kitchen and went to the sink to wash my hands, but just shut down. I couldn’t move. ‘Did I just give that man his last meal?’ I was overwhelmed with the disaster and the tragedy. I started to sob. Bay Harbor is a Methodist Church, and its leader, Pastor Paul, saw me and asked me how I was doing. ‘I just need to reset,’ I said. He invited me to visit the Church’s sanctuary. I did. 

In that moment, I realized that I could not know or own what happens to every person that walks through the door. We can only serve those that are right in front of us the best we can, and then allow them to be served by the next. If we focus on the thought of ‘what will happen to that person next?’ we will never be able to help the person that is right in front of us. It took me a few minutes to resolve, reset, and get back in the game. 

As for human spirit, creativity, and inspiration, it thrived for four days as the community fixed its own issues. League City is in the phase called, ‘return to normal.’ That means that the disaster is over, recovery is nearly complete, and folks are getting back to their lives. But just a few miles away, there are houses still under water. We have a lot of work to do.” 

Dr. Ireland shares the lesson she learned by being a witness, volunteer, and Emergency doctor when people were in desperate need of help during a grand scale crisis. 

“The most important thing I realized from this was that people are the most important resource in a disaster. Some people truly rise to the occasion in stressful situations and those people become indispensable in an emergency.”

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Leveraging Crowd-Intelligence for Forecasting and Predictions

Leveraging Crowd-Intelligence for Forecasting and Predictions

Artificial intelligence is breaking onto the scene for managing hedge funds, where they process volumes of data to pick up on patterns that even the most seasoned traders couldn’t see.

Coupled with collective intelligence, also known as “wisdom of the crowd,” where professionals and clueless people alike give their insight on a certain topic for an average that is impressively accurate, the combination of the two could lead to more efficient and higher return investment vehicles.

A popular study of this phenomenon at work occurred in 1906, when an English Scientist by the name of Francis Galton, asked roughly 800 people at a fair to guess the weight of a bull. Farmers and other experts with intimate knowledge of livestock as well as people with no experience offered their estimates. While the individual guesses may have varied from the correct answer, when Galton calculated the average of all 800 answers, he came up with 1197 pounds, which was very close to the bull’s weight of 1198 pounds.

Сombining the two spheres of intelligence in FinTech

There are several players looking into combining the two spheres of intelligence, including Santiment, Cindicator, Numerai, and Estimize. They all adopt a different, or at least slightly varied, approach.

Estimize pulls its info from professional experts in finance, it then runs that data through its AI system for a prediction. Its estimates are usually at least 74% more accurate than data used on Wall Street, giving them a significant advantage over traditional institutions.

Santiment looks to be an important asset for traders by compiling the largest library of data feeds pertinent to cryptocurrency. One of these includes sentiment and crowdsourced sources, indirectly leveraging the power of collective intelligence.

Cindicator works by creating what they call a hybrid intelligence, combining insight from numerous financial analysts with a set of learning machine models in order to efficiently manage capital in traditional and cryptocurrency markets. The “hybrid intelligence” model is chosen to ensure higher accuracy of forecasts, by using crowdsourcing to create huge datasets which are later processed using the most powerful AI block. The use of blockchain technology in the model ensures decentralization, which will eliminate the possibility of bias that is otherwise prevalent in traditional crowdsourced prediction models.

Since everyone is concerned about their finances, Cindicator has an opportunity to gather data from a significantly larger pool of subjects compared to other subjects. As the information pool continues to grow bigger, the significance and accuracy of the resulting data will also improve. The platform creates a technological symbiotic connection between human mind and machine intelligence to generate real-time market forecasts, with huge implications for the financial sector.

Numerai looks to use intelligence from the crowd and computers for the first hedge fund. With $7.5 million in funding from investors, there’s a great amount of interest in anything that can generate higher returns in the cutthroat environment of Wall Street. Similarly, Cindicator has also gained a lot of attention for its unique model, which has undergone successful tests as part of a joint experiment with the Moscow Exchange. Being the youngest of all forecasting and prediction tools, the platform has the potential to gain widespread adoption as the company continues to improve and add new features. 

Regardless, the future of Fintech is bright. Blockchain technology is bringing forward applications and innovation never before feasible, allowing for the birth of an entirely new sector relying on both human and machine intelligence to make precise predictions.

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China Bans All ICOs Immediately. Cryptocurrency Prices React

China Bans All ICOs Immediately. Cryptocurrency Prices React

China Bans All ICOs Immediately. Cryptocurrency Prices React

A notice from the Banking Regulatory Committee led by the People’s Bank of China today announced an immediate ban on ICOs. Starting September 4, all ICOs in China will be frozen.

notice from the committee states that ICO fundings have seriously disrupted the economic and financial order in the region. There are several reasons for the ban, one of which is the concern that non-banking payment institutions have no legal right to carry out business related to token issuance and financing transactions. Moreover, the committee believes that dozens of startups launching ICOs may be financial scams and pyramid schemes.

To date, the committee has prepared a list of 60 exchanges which will be subject to inspection,
reported TechCrunch. Two of largest ICO platforms in China – ICOage and – have suspended all services. Both companies have posted instructions for how users can withdraw their money.

Cryptocurrencies react to the ICO ban

The ICO boom this year has been largely led by Chinese businesses. State media firm Xinhua reported in July that Chinese companies had raised $383 million from 105,000 investors during the first half of the year.

The announcement of the ban has immediately influenced the prices of the most cryptocurrencies that are used in ICOs and affected other altcoins as well. On September 4, 2017, each of the top cryptocurrencies suffered from massive price falls.

Cryptocurrency prices, September 4, 2017

According to coinmarketcap, Bitcoin lost almost 5% and moved from the level of $4,500 to $4,264. Note, just a couple of days ago the Bitcoin price managed to reach a new historical high of $5,000 per BTC. Ethereum lost 13% today and moved from $340 to $293.

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How a Person Lost Over $300,000 Due to Simple Mistakes

How a Person Lost Over $300,000 Due to Simple Mistakes

Starting two weeks ago, an ether wallet received hundreds of thousands of dollars. The only problem was that these funds were hacked from different wallets. Unfortunately, the vast majority of the funds were hacked due to carelessness on the part of the user.

Over the past couple of weeks, over $400,000 worth of Ethereum has been transferred into a hacker’s wallet, the transactions are shown
here.  Over $350,000 of the ether was stolen using a process that was released publicly over two months ago.  With some security measures, at least some of the funds could have been saved from the hacker.

The hack    

The majority of the funds, 973 ether, were stolen from one user.  This user – who uses the Jaxx wallet – managed the funds from a rooted android phone.

This is the attack vector the hacker used to gain access to the funds.  For those of you that don’t know,
rooted Android devices are like jailbroken iPhones: you can install many new things if you have a rooted phone, but you have no security guarantee that the apps are not compromised. In this case, an app that was compromised was likely downloaded onto the phone giving the hacker all the access he needed.  Once access to the phone was gained, it is likely the hacker used an exploit that retrieves the backup phrase to Jaxx wallets.  This exploit has been known for many months but has not been fixed due to Jaxx being a hot wallet (a wallet where the coin is constantly being used, not stored). The user that had his wallet hacked and wished not to be identified told

“Seems like such a terrible omission that could easily be implemented. Life will go on. I have my health.”

How it works

According to a researcher at VX Labs who first found the exploit that was likely used, a summary of how the hack works is this:

“Even when your Jaxx has a security PIN configured, anyone with 20 seconds of (network) access to your PC can extract your 12 word backup phrase and copy it down. Jaxx does not have to be running for this to happen.  With the 12 word backup phrase, they can later restore your wallet, including all of your private keys, on their own computers, and then proceed to transfer away all of your cryptocurrency.”

The Jaxx team believed that fixing the exploit would unnecessarily make the wallet more difficult to use.  According to the CTO of Jaxx, Nilang Vyas, “there will always be tradeoffs between user experience, portability and security and we believe we’ve struck a great balance. Since 2013 over 750,000 Jaxx and (our former company) Kryptokit wallets have been created. Never have funds been lost on any of our production versions due to an issue on our end. We stand by that amazing record.”  With a little care, this hack could have been avoided.  Below are some tips to help you secure your funds.

Ways to increase the security of your funds

Crypto security experts give several pieces of advice on how to secure wallets and funds on them.

1) If you use public wifi, don’t. This is just not a good idea even if you add more security layers such as VPNs.

2)Turn on 2FA for all your accounts. Not text message based, but with google authenticator where possible.

3) Do not store your private key unencrypted, ever.  Use a 256-bit encryption service to encrypt the key if you can’t remember it.

4) Never access your coins on a device that is rooted. For all you iPhone users, rooted devices are basically Androids that have been jailbroken.

5) Do not install apps that are not reputable onto your device. Try to keep only apps that are signed and that you are confident don’t have any malicious code. Another option is to keep a device exclusively for dealing with your funds.

6) The only person that needs your private key is you.  Always look out for phishing scams.

7) Use bookmarklets for sites. Some fake sites have URLs close to the actual one and could steal your information.

8) Don’t store funds on exchange wallets or hot wallets such as Jaxx. Cold wallets are more secure. Alternatively, use paper wallets and store them like any other important document you own.

9) Use the monitor option on etherscan to be alerted when there are transactions with your address. 

10) If you have a large sum of money, split it amongst different wallets to ensure one failure will not wipe out everything.

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