Tag Archives: bitcoin blockchain mirror

What is the difference inbetween an exchange (e

blockchain vs coinbase

Your ETH & tokens are on the blockchain, regardless of what service you use to access them. When you stir them, you are sending them from one address on the blockchain to another. These are simply lines of code. Your wallet file, the user interface you interact with, the private key—these do not have funds in them. The private key gives you the capability to prove ownership over coins that are on the blockchain.

If you use a client-side device like MyEtherWallet or Mist, Metamask, Exodus, or Jaxx, then you have the private key & you control your funds and your key. You do not rely on Coinbase or Gemini sending your funds from their account to yours.

The upside is that you, and only you, control your keys. An exchange getting hacked won’t affect you. The downside is that you, and only you, control your keys. No one else has them, nor can recover them, should you lose them.

If you do lose your private key or wallet file or password, you cannot prove ownership of an account and therefore you cannot ever send your coins again.

If you use an exchange like Coinbase, Gemini, Kraken, Polonix, Bittrex, then you have any account with that company, and they hold your ETH and your keys for you. They have their own account on the blockchain with all their and their customers’ funds in it. Then you have a username / password with them, on their servers, and they keep track of how much ETH they “owe” you.

This permits you to have the more traditional username / password situation and do things like reset your password if you leave behind it, switch your password if your password is compromised, and turn on 2FA. However, it also means that if the exchange loses ETH, it’s your ETH that is lost.

If you choose to budge from an exchange to a wallet where you control your keys, you need to make sure that you have numerous backups, stored in separate locations, of your private key + password. This will prevent loss in case your computer crashes or your house burns down or anything else.

You also need to ensure you keep these keys securely. This means:

  • Don’t inject it on random websites
  • Always ensure you are on the correct site or downloading from the legitimate repo / website.
  • Don’t email your key, send it to anyone or post it online
  • Don’t save it to cloud storage
  • Don’t have Team Viewer or other remote access software on your computer

If this seems very terrific, we recommend purchasing a Ledger or TREZOR hardware wallet. These help keep your keys safe and stored in an “offline” device, rather than on your computer. In this case, you don’t have to worry about files or strings of characters; instead you just connect your hardware wallet to your computer.

Internal note: Also on StackExchange here—edits should be made in both locations

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Wallet Review, Bitcoin Web Wallet, Bitcoin Millionaire

Blockchain.info Wallet Review

Blockchain.info is a free Bitcoin web wallet.

One of the most popular Bitcoin wallets is the official web wallet of Blockchain.info. It’s one of the most widely-used wallets due to its ease of signing up, web access and mobile access , a few factors that will appeal greatly to fresh users of Bitcoin. This said, it may not be the ultimate choice for experienced users who want total control of their own Bitcoins and security.

Because of its direct web access and its availability as a mobile app, Blockchain.info’s wallet is very likely one of the more convenient methods of accessing and spending your Bitcoins. As long as you have your wallet ID, you can inject it via a web browser connected to the Internet to access your funds. That does mean you have to store your wallet ID somewhere on your desktop or mobile, however, albeit the use of browser caches can help you get past this.

Some mobile users also face a rather annoying problem of not being able to copy and paste Bitcoin addresses within the mobile app. So unless you have photographic memory, the plain act of sending someone Bitcoins using the Blockchain.info app is going to be a agony in the crypto-ass.

In the past, however, high traffic to the website has caused overloading and server issues, leading to users being incapable to access their wallets for substantial periods of time. Lately, spectacle seems to be improving but if you’re a user, then you’ll always have to contend with server spectacles from their side. This means that you do risk not being able to use your Bitcoins on request.

Security

Blockchain.info is one of the oldest companies to suggest a free wallet solution and maintains a high level of trust within the Bitcoin community. Because your wallet is stored online on their servers (albeit you still control your backup phrase for recovery), this does mean that users have to trust Blockchain.info so this hybrid solution may not be your long-term wallet options if you want to control all your own information and privacy (including data on your transactions).

If you’re keen on using Blockchain.info, then do recall to make utter use of enhanced security features suggested from its Security Center (accessible once logged in). When creating your wallet, you will already be asked to verify your email address, which is used in the login process. You’ll also be asked to create a 12-word backup phrase which you must keep securely in the event you need to recover your wallet. You can use an IP filter to also block access from TOR-linked IP addresses commonly used by would-be intruders.

It then permits you to add two extra layers of security on top of that (very recommended!). The very first is wo-factor authentication (2FA) for which you’ll require a mobile phone and active number which you own. If you use the mobile app, you can set a 4-digit pin code which will be prompted every time the app is accessed.

Wallet Review, Bitcoin Web Wallet, Bitcoin Millionaire

Blockchain.info Wallet Review

Blockchain.info is a free Bitcoin web wallet.

One of the most popular Bitcoin wallets is the official web wallet of Blockchain.info. It’s one of the most widely-used wallets due to its ease of signing up, web access and mobile access , a few factors that will appeal greatly to fresh users of Bitcoin. This said, it may not be the ultimate choice for experienced users who want utter control of their own Bitcoins and security.

Because of its direct web access and its availability as a mobile app, Blockchain.info’s wallet is very likely one of the more convenient methods of accessing and spending your Bitcoins. As long as you have your wallet ID, you can inject it via a web browser connected to the Internet to access your funds. That does mean you have to store your wallet ID somewhere on your desktop or mobile, however, albeit the use of browser caches can help you get past this.

Some mobile users also face a rather annoying problem of not being able to copy and paste Bitcoin addresses within the mobile app. So unless you have photographic memory, the elementary act of sending someone Bitcoins using the Blockchain.info app is going to be a ache in the crypto-ass.

In the past, however, high traffic to the website has caused overloading and server issues, leading to users being incapable to access their wallets for substantial periods of time. Lately, spectacle seems to be improving but if you’re a user, then you’ll always have to contend with server spectacles from their side. This means that you do risk not being able to use your Bitcoins on request.

Security

Blockchain.info is one of the oldest companies to suggest a free wallet solution and maintains a high level of trust within the Bitcoin community. Because your wallet is stored online on their servers (albeit you still control your backup phrase for recovery), this does mean that users have to trust Blockchain.info so this hybrid solution may not be your long-term wallet options if you want to control all your own information and privacy (including data on your transactions).

If you’re keen on using Blockchain.info, then do reminisce to make utter use of enhanced security features suggested from its Security Center (accessible once logged in). When creating your wallet, you will already be asked to verify your email address, which is used in the login process. You’ll also be asked to create a 12-word backup phrase which you must keep securely in the event you need to recover your wallet. You can use an IP filter to also block access from TOR-linked IP addresses commonly used by would-be intruders.

It then permits you to add two extra layers of security on top of that (very recommended!). The very first is wo-factor authentication (2FA) for which you’ll require a mobile phone and active number which you own. If you use the mobile app, you can set a 4-digit pin code which will be prompted every time the app is accessed.

Related video:

The World Economic Forum Might Not Be Ready to Lead a Blockchain Revolution

blockchain revolution

The research phase of the World Economic Forum’s work with blockchain has only just begun, and already its managing director is beginning to explore a more hands-on treatment.

So far, the international non-profit comprised of the leaders of more than a thousand of the largest companies in the world, has focused largely on establishing a blockchain working group, last week publishing its very first in-depth white paper on how to maximize the influence of the technology.

But following publication of the paper, WEF managing director Richard Samans acknowledged how much more many of his members still have to learn, in spite of projects being initiated on several other fronts.

Samans told CoinDesk:

“Most of this leader-level community is not very well versed in blockchain. In fact, they may know the term, but they don’t know much about where the technology is right now and how it may be applied in multi-faceted ways via society.”

Ostensibly, the white paper – written by Blockchain Research Institute co-founders, Don and Alex Tapscott – was designed to lay the framework for how existing consortia, private companies and governments could work together to maximize the potential benefits of a collective, trustworthy ledger of transactions.

Still, Samans said that even some of the most senior-level executives among the WEF membership still need to learn more about how such a technology could be employed in ways that benefit society at large.

“There’s a 2nd potential benefit of issuing this white paper, for this particular community,” said Samans. “And that is to raise awareness of blockchain as as reality already, and to give advanced notice that this is worth some real thinking among all sorts of social actors.”

Blockchain match

Key to that learning curve are two main groups within the World Economic Forum.

Very first is the freshly launched Global Future Council on the Future of Blockchain, with membership including Hyperledger executive director Brian Behlendorf, R3 chief technology officer Richard Gendal Brown and Everledger CEO Leanne Kemp.

2nd is the Center for the Fourth Industrial Revolution, launched last October to pursue fresh ways to leverage the mutli-stakeholder treatment across industries. With fucking partners that include Salesforce, Kaiser Permanente, Palantir Technologies and SAP, the center has been studying fresh ways to implement AI, the civilian use of drones, distributed ledger technology and more.

According to Samans, blockchain itself is ideally suited for the multi-stakeholder principals being followed within the center, which he said “could improve the prospects for the technology’s development.”

Whether that actually ever happens, however, is contingent on how quickly the members can catch up on the technology, and whether blockchain developers even want such centralizing oversight, regardless of its intentions.

“We are also a fertile platform for further catalyzing partnerships and in this case, there are a number of potentially fairly interesting use cases of blockchain, which are indeed in the early stages of being explored, whether they have to do with development or the way the economy operates.”

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

World Economic Forum photo via Flickr

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a stringent set of editorial policies. Interested in suggesting your expertise or insights to our reporting? Contact us at [email protected] .

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The Network Effect at Blockchain 360: IoT Security Summit 2016, IoT Institute

The Network Effect at Blockchain 360: IoT Security Summit 2016

Blockchain three hundred sixty — the opening day of the IoT Security Summit two thousand sixteen in Boston — was a well-attended event with a broad cross section of participants. Numerous companies in the space gave presentations explaining how Blockchain addresses the problem of trust in a decentralized situation by using ledgers containing immutable statements that are verified by numerous knots, so that there’s no reliance on a centralized assets for confirmation.

So far, the primary initial use case for blockchain is for alternative currencies and elementary, speedy financial settlements. Primarily wary of the technology, banks and financial institutions are now embracing the chance to reduce the settlement time of financial and stock securities from three days to potentially minutes.

A theme that emerged was the power of the network effect in the blockchain world. The value of Bitcoin, as with any currency, is its acceptability — how many places you can use it and with how many people. Consequently, the more people that embrace blockchain, the greater its value. This is similar to Metcalfe’s law in the communications space, very first used to describe the utility of fax machines to people and businesses. The very first fax machine had no value because it couldn’t communicate with anything, and the same with the very first mobile phone, but directly you have numerous possible connections with value that increases at an exponential rate.

This workshop exposed the meaty potential chance of what lies beyond financial applications. Anytime a machine interacts with a third-party, you could use blockchain as the verification process of the device as a trusted party, as well as the validity of the data it’s sharing.

Thomas France, co-founder of Ledger, a French-American startup, spoke about how they are creating hardware oracles that attest the physical device state to the digital world, primarily used for hardware Bitcoin wallets. An oracle is a trusted entity that sends confirmation to the blockchain. A hardware oracle is the combination of a physical sensor that analyzes the data and software that transmits the digital state information to the blockchain, either for validation or as validation. Ledger has created an operating system that has a very petite footprint — inbetween 4kb and 120kb with exposed APIs. The company plans to license the technology to OEMs and chip vendors.

Use cases are clever grid utility companies that need to attest to certifiable energy production, and issue tokens on the blockchain that prove that production. This can also be used to ensure that tens unit was consumed. Ledger is primarily based in France where a number of the clever meter and SIM/security companies operate. They anticipate that the proof of concepts will be flipped out over the next eighteen months, with production occurring in 2018.

Another aspect of blockchain is the concept of brainy contracts which are neither clever nor contracts. It is validated program logic that runs on the distributed ledger, with procedures affixed that are triggered when an authentication is received. This permits for a value chain process to be built across industries that don’t trust one another at the ecosystem level. In its simplest form, it means that when goods are shipped and received, payment can be released, and this avoids redundancy and reconciliation of databases across multinational supply chains.

For IoT, a practical use of these technologies is for devices to measure events, and send data to the blockchain that would trigger wise contracts. For example, an IoT thermostat can test temperature, and attest to the validity of the reading and post proof on the blockchain for the life of the asset. An example of this application is when a container with wine, traveling from one country to another, can be validated to have not exceeded temperature boundaries for the entire journey.

This is similar to a project that Kouvola is working on, using Blockchain and IBM’s Watson IoT platform to monitor and track containers. Every signal sent from a tracking sensor on the container is stored on the blockchain using Hyperledger, so that you can provide incontrovertible evidence of the state of the contents, its location and variations via its journey, from point A to point B.

The clear message I walked away with was that the growth of Blockchain and IoT will be intertwined, and combinatorial in terms of the network influence they have. This is particularly true for the telecom industry and the markets it serves.

A quote that was collective at the workshop was something that infrastructure theorist Vinay Gupta said when talking about Ethereum, the next-generation Blockchain platform: “Data is the network and the network is the data.” With all these connected validated devices networking and creating value, this should be manna to mobile operators’ ears!

The Network Effect at Blockchain 360: IoT Security Summit 2016, IoT Institute

The Network Effect at Blockchain 360: IoT Security Summit 2016

Blockchain three hundred sixty — the opening day of the IoT Security Summit two thousand sixteen in Boston — was a well-attended event with a broad cross section of participants. Numerous companies in the space gave presentations explaining how Blockchain addresses the problem of trust in a decentralized situation by using ledgers containing immutable statements that are verified by numerous knots, so that there’s no reliance on a centralized assets for confirmation.

So far, the primary initial use case for blockchain is for alternative currencies and plain, speedy financial settlements. Originally wary of the technology, banks and financial institutions are now embracing the chance to reduce the settlement time of financial and stock securities from three days to potentially minutes.

A theme that emerged was the power of the network effect in the blockchain world. The value of Bitcoin, as with any currency, is its acceptability — how many places you can use it and with how many people. Consequently, the more people that embrace blockchain, the greater its value. This is similar to Metcalfe’s law in the communications space, very first used to describe the utility of fax machines to people and businesses. The very first fax machine had no value because it couldn’t communicate with anything, and the same with the very first mobile phone, but directly you have numerous possible connections with value that increases at an exponential rate.

This workshop exposed the large potential chance of what lies beyond financial applications. Anytime a machine interacts with a third-party, you could use blockchain as the verification process of the device as a trusted party, as well as the validity of the data it’s sharing.

Thomas France, co-founder of Ledger, a French-American startup, spoke about how they are creating hardware oracles that attest the physical device state to the digital world, primarily used for hardware Bitcoin wallets. An oracle is a trusted entity that sends confirmation to the blockchain. A hardware oracle is the combination of a physical sensor that analyzes the data and software that transmits the digital state information to the blockchain, either for validation or as validation. Ledger has created an operating system that has a very petite footprint — inbetween 4kb and 120kb with exposed APIs. The company plans to license the technology to OEMs and chip vendors.

Use cases are wise grid utility companies that need to attest to certifiable energy production, and issue tokens on the blockchain that prove that production. This can also be used to ensure that violet wand was consumed. Ledger is primarily based in France where a number of the brainy meter and SIM/security companies operate. They anticipate that the proof of concepts will be flipped out over the next eighteen months, with production occurring in 2018.

Another aspect of blockchain is the concept of clever contracts which are neither clever nor contracts. It is validated program logic that runs on the distributed ledger, with procedures affixed that are triggered when an authentication is received. This permits for a value chain process to be built across industries that don’t trust one another at the ecosystem level. In its simplest form, it means that when goods are shipped and received, payment can be released, and this avoids redundancy and reconciliation of databases across multinational supply chains.

For IoT, a practical use of these technologies is for devices to measure events, and send data to the blockchain that would trigger brainy contracts. For example, an IoT thermostat can test temperature, and attest to the validity of the reading and post proof on the blockchain for the life of the asset. An example of this application is when a container with wine, traveling from one country to another, can be validated to have not exceeded temperature thresholds for the entire journey.

This is similar to a project that Kouvola is working on, using Blockchain and IBM’s Watson IoT platform to monitor and track containers. Every signal sent from a tracking sensor on the container is stored on the blockchain using Hyperledger, so that you can provide incontestable evidence of the state of the contents, its location and variations across its journey, from point A to point B.

The clear message I walked away with was that the growth of Blockchain and IoT will be intertwined, and combinatorial in terms of the network influence they have. This is particularly true for the telecom industry and the markets it serves.

A quote that was collective at the workshop was something that infrastructure theorist Vinay Gupta said when talking about Ethereum, the next-generation Blockchain platform: “Data is the network and the network is the data.” With all these connected validated devices networking and creating value, this should be manna to mobile operators’ ears!

Related video:

The current state of blockchain regulation, Mobile Payments Today

The current state of blockchain regulation

With fresh technologies, it takes a while for regulation to catch up. Blockchain technology is no exception. While we are leisurely beginning to see standards emerge — for example, Fresh York state’s fresh BitLicense regulations — the reputation of blockchain is still marred by the criminal aspects of bitcoin.

Bitcoin itself recently took a hit when the SEC ruled against the Winklevoss twins’ proposal for an exchange-traded fund for bitcoin. The SEC voiced concern about the capability of powerful, unregulated Chinese exchanges to manipulate the price of bitcoin. This underscores a key aspect of virtual currency regulation: It is still in its infancy.

“The current regulatory landscape when talking about [distributed ledger technologies] is at the same time immature and complicated, and it depends on what component of the DLTs we are talking about: cryptocurrencies; blockchains; collective ledgers; clever contracts; etc.,” Javier Sebastian Cermeno said in a report by BBVA Research. “The regulatory treatment of each of these components is different, albeit [the] lack of specific regulation is a common factor.”

Presently, countries such as Brazil, Canada, the United States and many European nations at least permit bitcoin technologies. Others such as China and India have a less friendly relationship with bitcoin, and some — including Russia — are outright hostile, according to the BBVA report.

Even among governments that do permit trading in bitcoin and other virtual currencies, regulation can be inconsistent. For example, the European Parliament believes it should take a hands-off treatment to virtual currency regulation and should simply analyze it. However, the European Banking Authority, a regulator agency of the EU, recommends that banks stay away from virtual currency.

In the U.S., the Financial Crimes Enforcement Network was the very first government agency to release a statement on virtual currency. FinCEN was followed by the IRS, according to a blog by Liz Prehn, a tax attorney for Moskowitz LLP. The IRS regulations for taxation, however, leave a number of unanswered questions. For example, how should bitcoin mining be treated for tax purposes?

“Is virtual currency that is held by a merchant considered a capital or an ordinary asset?” Prehn wrote. Is it a “commodity” subject to mark-to-market accounting?”

Other questions relate to how virtual currency should be reported and how to determine the exchange rate of virtual currency for tax purposes.

While the IRS views virtual currency as property, other regulatory agencies see it differently. FinCEN treats it as money, whereas the Commodity Futures Trading Commission treats it as a commodity. This has led to difficulties in court cases related to bitcoin in which judges have had to determine exactly how to treat virtual currency, according to the BBVA report.

For example, in 2016, Judge Teresa Pooler of the 11th Judicial Circuit Court of Florida ruled on the case of a man charged with helping two undercover agents launder money with bitcoin. Judge Pooler threw out the case telling that bitcoin is not money, thus the defendant could not be charged with money laundering.

From a global perspective, regulatory initiatives around the broad field of distributed ledger technologies are in their initial stages, Cermeno said.

Most regulatory bods now have working groups and task coerces in place analyzing virtual currencies and DLTs, however, there still is relatively little progress toward enforceable regulation.

In the case of blockchain technology regulation, Cermeno asserts that it doesn’t indeed exist yet. But users of the technology will come up against existing regulations for activities — such as clever contracts — as they migrate to blockchain technology.

“Any wise contract defined on the blockchain will have to serve at least with the regulation on contracts applicable on the correspondent jurisdiction, as exposed in the commercial and trade law,” Cermeno said. “Then, depending on what kinds of financial services are being suggested on the blockchain (payments, lending, investment, etc.), regulation on these services will have to be applied. For example, KYC and AML regulation, capital markets regulation, lending regulation, and so on.”

Related video:

The Buddhist Vacuum Cleaner and the Blockchain – The Telling Phase – Of Things Immaterial

The Buddhist Vacuum Cleaner and the Blockchain – The Telling Phase

Waiting for long-heralded technologies to land can be like waiting for the punchline of an overdrawn joke. Is it indeed going to be a shift in understanding, did the teller make the ending too demonstrable or, were you robbed while waiting for the tale to finish?

I love a switch framework as much as anyone – hype cycles, adoption forms, horizons – but joke telling is just as useful. The three phases of many jokes are Framing, Telling and the Punchline. The punchline providing us a shift in understanding. Let me explain that with a choose your own technology / joke example

Blockchain, Augmented Reality or the Buddhist Vacuum Cleaner?

Framing – Did you hear the one about the next technological revolution? (a) the Blockchain (b) Augmented Reality or (c) the buddhist vacuum cleaner

Telling – (a) A technologist and cryptographer designs a see-through, globally distributed transaction ledger facilitating indisputable transaction exchanges. (b) Technology advances enough to permit real-time projection of computer generated material onto our visual field. (c) A monk attempts to clean their cell but can’t reach the corners.

Punchline (a) It substitutes money as we know it (and disintermediates / demolishes the traditional banking system) (b) It brings data to life (and adds another layer of distraction and abstraction) (c) It has no attachments

The Shift (a) Do we need currency at all when we can use a ledger of tokens to connect to things in the real world (Gold, Land, Goods) (b) We’ve always had a reality abstraction. We began with accounting records using marks on clay. This is just swifter (c) Does James Dyson clap with one palm?

The Telling Phase

It’s in the Telling phase that is interesting. We want it to be arousing or intriguing but not too long and not to signal the punchline. In technology, the consumer electronics industry (and the media it supports) keeps attempting to give the punchline away. It keeps attempting to make the audience invest in the telling position by asserting it wields the punchline and it is worth waiting for.

Reality however makes its own punchlines. 3D Printing for example turned out to be a powerless joke on the consumer audience but comedy gold for manufacturing and engineering. Mobile communications wasn’t about better one-to-one communications but one-to-many-many-more.

Why is this interesting?

What will the punchlines be for blockchain and augmented reality? They are yet to be exposed. During all the attempts to tell the same joke the potential shift direction is exposed in background reality. In the time it takes to land the main punchline, the more we have time to turn a surprising shift (or ‘disruption’ if you like) into a useful progression. The Telling phase then is a buffer. We observe the iterations of the joke being told but, wait for the interesting punchline and still surprising shift.

Interested in more thoughts like this?

If you found this interesting and worth exploration with your organisation let’s talk about how we might work together. To find out how to get in touch go here

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The $80 billion question: Why are Bitcoin and Ethereum growing so prompt?

Mashable

Business

A little over two months ago, Bitcoin achieved a symbolic milestone: After an intensive period of growth, the price of one Bitcoin surpassed the price of an ounce of gold.

That seems like ancient history. The price of Bitcoin has almost doubled since then and the cryptocurrency is presently trading at about $Two,200. Bitcoin’s cousin Ethereum is trading at about $180, its price enhancing by a cool 1400% in the last three months.

But is the rally over, or has it only just begun? And what has propelled the explosive growth in the very first place? In the world of cryptocurrencies, answering these questions is anything but effortless.

A fresh breed of cryptocurrencies

To embark, it’s significant to understand that Bitcoin, while still the largest cryptocurrency around, is not the only — arguably not even the thickest — driver of growth anymore. According to Coinmarketcap, the total vale of all major cryptocurrencies put together now stands at around $79 billion. Bitcoin accounts for less than half of that, with a $35 billion market cap, while Ethereum and Ripple have grown to $17 and $13 billion, respectively.

A duo of years ago, one Bitcoin was worth a little over a hundred dollars. Now, it broke the $Two,000 barrier and is growing like a weed.

The digital coin market cap is a frequently quoted number that means nothing and everything, depending on your viewpoint. If you believe that Bitcoin will ultimately substitute money, then $35 billion is pocket switch. But it may never happen, and even if it does, Bitcoin might be left behind.

Bitcoin is still by far the most promising as both a digital currency and a payment platform. But the fresh breed of digital coins are very different. Litecoin, an early Bitcoin competitor, has once again taken the spotlight after having recently adopted SegWit, a software update that solves the scaling problem that has been dividing Bitcoin’s community for years. Ethereum is a modern cryptocurrency which promises advanced features such as wise contracts. It wants to become a blockchain-based foundation for what is essentially a fresh type of internet. How’s that for ambition?

The value of (digital) money

When the price of a commodity or a stock rises, you can usually point to some sort of reason. When Apple has a good quarter, its stock price generally goes up. When catastrophe strikes, uncertainty in global markets typically increases request for what are viewed as safer investments such as gold, propelling prices upward.

But in the world of Bitcoin, the digital cryptocurrency that doubles as a decentralized payment system, you’ve got a lot less to go on.

A lot of the latest Bitcoin news wasn’t good. In April, the U.S. Securities and Exchange Commission declined a bid by the Winklevoss brothers to get their Bitcoin ETF listed on the Bats BZX exchange. The stir would have made it far lighter for the average investor to speculate on the future of Bitcoin.

And over the last duo of years, the Bitcoin community has been bitterly divided over a question on whether the size of blocks on the cryptocurrency’s blockchain — the fundamental technology upon which the Bitcoin protocol relies — should be enlargened or not (read a elementary explanation of the block size debate here).

Still, the price of Bitcoin went from toughly $400 to more than $2000 in a year, and other cryptocurrencies followed suit. Why?

So what’s happening?

Cryptocurrency experts we’ve contacted say developments in Japan are the likely cause for this latest price surge.

“The Japanese have given bitcoin the green light as a currency and are looking to increase the rigour that their exchanges are subject to,” said Charles Haytar, CEO of market analysis platform CryptoCompare. On a purely technical level, the current price differences in the Japanese markets and elsewhere suggest the possibility of arbitrage, Hayter claims, but there’s a good deal of plain old greed going on, too.

The price difference in Japan and other markets suggest the possibility of arbitrage, and some traders are taking advantage.

“Lots of inexperienced investors are surging into the market, and it’s causing a bit of a bubble,” said Hayter.

Jörg von Minckwitz, CEO of blockchain-based payment service Bitwala, points out that Ethereum has seen extra growth due to the rise of ICO (initial coin suggesting) based projects.

In other words, to invest in a fresh project, you have to buy into Ethereum.

“Many crypto projects raise money from the community to develop their projects and most of them use ETH to raise money. ETH set a standard, so it is way lighter to commence with ETH. The result is that many people buy ETH to be able to invest in the projects and many of the ICO projects hold the money afterwards in ETH. That drives the price up,” he told Mashable.

None of this, however, explains the fact that a lot of the growth happened before the developments in Japan and the onset of multi-million Ethereum-based projects. It also doesn’t give us a much better idea of realistic value of one Bitcoin or one Ether. Go to any Bitcoin-related community, and you’ll see price predictions ranging from $40,000 to zero.

While that 2nd prediction sounds dramatically pessimistic, consider this: Cryptocurrencies are very volatile. The price of Bitcoin, for example, slumped from more than a $1,100 in Dec. Two thousand thirteen to less than $200 in Jan. 2015. The most latest rise in price is not permamnent.

Most experts agree that cryptocurrencies rely powerfully on user adoption, and however crazy the market may look like now, it’s still early days for cryptocoins. Right now, it’s effortless to raise $Ten million or $20 million for your Ethereum-based business, and more businesses will flock to seize the chance.

Ten years from now, will we be receiving our paychecks in fiat, or Bitcoins?

And while broad adoption of Bitcoin as a payment platform is happening at a relatively slow rhythm, trading cryptocurrencies has gotten a lot lighter in latest years. Exchanges such as Coinbase, Kraken, and BitStamp now let you turn dollars and euros into BTC and ETH. This has certainly propelled some of the market’s growth; when you see something increase in value tenfold within a month, you want to be a part of the activity.

The question is: how far will the price go?

Is it time to dive in, or rush out?

Predicting the price switches in any market is rough; the old advice from the likes of Warren Buffett says you should put your money in a stock index fund and let the experts trade, as the short-term movements of the market are amazingly difficult to predict.

When I commenced writing this article on Friday, the market cap of all cryptocurrencies was $63 billion. It took one weekend for the market to add $16 billion in value.

It’s even tougher to predict a very volatile market such as cryptocurrencies. Add to that the relative youth of all the exchanges you can trade on, and the dangers are even thicker: If the price of Bitcoin starts falling rapidly, don’t count on stop-loss measures to save you from emerging doom.

Both Hayter and von Minckwitz agree that in short-term the prices in the cryptocurrency markets are overvalued, but they are positive about long-term growth. Hayter is a bit more pessimistic, tho’, comparing some of the Ethereum-based ICOs to the South Sea Bubble (referring to the British South Sea Company, whose stock price rose sharply in the early 18th century before it collapsed).

“I would not advise anyone to buy (cryptocoins) right now. I’m worried that the lack of rationality at this point might hurt the market,” said Hayter.

For an illustration of this lack of rationality, consider this: When I embarked writing this article on Friday, the market cap of all cryptocurrencies was $63 billion. It took one weekend for the market to add $16 billion in value. Eat that, Uber.

That said, one way to look at cryptocurrencies is to read up, and make an informed decision on their long-term prospects. Is Bitcoin just a fad? If so, it might already be overrated. But if you think that this technology could switch the way money — or the entire Internet — works, there’s slew room for growth in the future.

DISCLAIMER: The author of this article wields BTC, ETH, and ZEC.

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The – Internet of Value: eight Top Sectors Being Transformed by Blockchain – Cloud Foundry Live, Altoros

The “Internet of Value”: eight Top Sectors Being Transformed by Blockchain

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A fresh industrial era

“We’ve had a few decades of the Internet of Information. Now we’re getting to the Internet of Value,” said Don Tapscott, CEO of the Tapscott Group, as he began his keynote presentation at the latest IBM InterConnect conference.

We’ve been through three industrial revolutions: the very first with mechanization, water power, and steam power; the 2nd with mass production, assembly lines, and electric current; and the third with computers and automation.

According to Don, we are in the midst of the fourth industrial revolution. This shift into cyber physical systems is “infusing technology through every organization, every business process, the economy, the business world, even through our figures.”

This evolution has brought about fresh advancements that will “participate in the transformation of corporations, of competitiveness, and of our economy.” More importantly, it has also brought about a fresh commercial and transactional platform needed by these technologies—blockchain.

The Internet of Value

“Wealth creation, corporations, and innovation rely not just on information but on things of value—assets,” said Don as he explained how transactions are traditionally processed. “If I send you a hundred dollars, it’s truly significant that I don’t have the money (anymore) and I can’t send it (again to someone else).”

In that screenplay, Don is describing a problem known as dual spend. This is a problem that’s mitigated by having transactions go trough large intermediaries.

Intermediaries include financial institutions, governments, and social media organizations. All of these companies “provide the basic transaction logic for every type of commerce. They enable the clearing and lodging of transactions, they keep records, and they enable us to trust one another because we have no peer-to-peer medium of value.” However, as Don points out, this solution has its own set of problems:

  • Security. Intermediaries big and petite can be hacked.
  • Efficiency. Intermediaries use archaic and slow processes that bog down transactions. “It can take days for money in computers to stir down the streets of a large city even weeks for some kinds of assets.”
  • Fees. Intermediaries take a cut out of each transaction.

After all these problems, Don pointed out another key issue in that intermediaries “don’t have the wherewithal or the capability to include everyone in the financial system and overall they’re capturing our data.”

“We have this crazy situation today where there’s wealth creation, but across the developed world, there’s declining prosperity.” —Don Tapscott, Tapscott Group

According to Don, all of these issues are at the “heart of all of the anger, populism, and extremism that exist today.”

“What if there were not just an Internet of Information, but an Internet of Value? Some kind of global, vast distributed ledger that runs on millions of computers all around the world and that would enable anything of value to be stored and transacted in a secure way?”

—Don Tapscott, Tapscott Group

Transaction costs near to zero

“(Blockchain) gives intermediaries a powerful fresh implement because it enables people and organizations to trust each other, to transact, and to do business peer-to-peer,” said Don. “The intermediaries are being coerced to convert their game.”

“Trust is not achieved by some powerful institution. it’s achieved by cryptography, collaboration, and by some clever code. We call (blockchain) the trust protocol.” —Don Tapscott, Tapscott Group

What’s so significant about blockchain? To reaction this question, Don said we have to take a look at competitiveness and why firms exist. He referred to an economic theory proposed by the late Ronald Coase in 1973. All of these boil down to one thing—transaction cost:

  • The cost of search in the open market is prohibitive.
  • The cost of coordination and getting people who’ve never worked together before is a barrier.
  • The cost of contracting can be exhaustive if every little activity required a contract.
  • The cost of establishing trust can be difficult since trust is an issue.

According to Don, blockchains are already affecting all the four categories of transaction costs. “This is going to lead to a very profound switch in the deep structure and architecture of a corporation,” he said.

This brings us to distributed value creation with “a trust protocol implemented across enterprises and across the economy, where these transaction costs in some cases can drop to almost to zero.”

8 main sectors transformed by blockchain

Previously, we’ve written how blockchain is already affecting numerous industries today. To proceed that trend, Don outlines eight business models, where blockchain sees value.

Very first off are blockchain cooperatives for sharing economies, such as Uber and Airbnb. These are service aggregators and not sharers, as Don explained, but the potential for blockchain remains.

“Everything the company, Airbnb, does could be done by software. It’s a database,” said Don. “By putting the same service on a blockchain, all the usual transactions simply have to be converted into brainy contracts. This will turn room owners into a cooperative, negating the need for an intermediary and it’s fees.”

Blockchains can help rights creators or content creators get compensated. In this script, Don explained how a music artist can use platforms, such as Mycelium, to place songs in a blockchain. Using the song in any way from simply listening to it to using it in a big production calls on clever contracts that collect and transfer varying fees to the creator.

This same idea applies not just to musicians but to any content creator.

Another application of blockchain is for re-intermediation. In the case of remittances, the transfer of money by a foreign worker to an individual in his or her home country, intermediaries will charge harshly 10% of the total value being sent. There’s also the issue of the time spent having to go through an intermediary to send and receive the money.

Transactions such as these are made ordinary by blockchain applications, such as Paycase, which enable the transfer of funds in mere seconds instead of days with a lower cost of transaction.

Outside of finance, blockchains also have value in supply chains where it’s very significant to have provenance of all assets. A good example for this case is Everledger, where over one million diamonds are now registered and its blockchain has expanded to other luxury goods, saving insurers $50 million annually.

Blockchains will also have a place in the continued development of the Internet of Things (IoT).

“We’re animating the physical world and all of these devices will not just be collecting information, monitoring, and switching our environments for us,” said Don. “A lot of them will be doing transactions. This is natural application for blockchain.”

Blockchains are already playing an essential role for platform builders, specifically in financial institutions. According to Don, traditional financial institutions are built much like Rube Goldberg machines in that deliberately sophisticated processes are used to perform the simplest of transactions.

Using blockchain, financial institutions have the chance to streamline all of its processes such as:

  • Authenticating and attesting value
  • Transferring value
  • Storing value
  • Lending value
  • Exchanging value
  • Funding and investing
  • Insuring value and managing risk
  • Accounting for and auditing value

“This is an chance to think strategically and inject into other businesses.”

—Don Tapscott, Tapscott Group

There’s also potential for blockchain in better data management. According to Don, data that we create is being fracked much like oil and gas. This aggregated data is creating something of extreme value.

“Facebook is the ultimate example of a fracker. This is a problem because we create this asset but somebody else gets to own it,” said Don. “We leave this trail of digital crumbs that are being collected into mirror pictures of ourselves that constitute our identities.”

This is an issue of lost privacy and it’s something blockchain can resolve. There are companies such as SecureKey that are working towards developing digital identity on a blockchain.

Last is the application of blockchain to improve public sectors. Governments all over the world have already seen what blockchain can do and are in the process of adoption. Dubai has tapped IBM Blockchain to help execute it’s two thousand twenty blockchain strategy. Sweden is putting its land registry on a blockchain. Nasdaq is leading blockchain govtech developments in Estonia. The list goes on.

“We are in a fresh paradigm,” concluded Don. “Fresh paradigms are almost always received with coolness, even mockery, or hostility. Those vested with interests fight the switch,” he said. “The shift requests such a different view of things that established leaders are often last to be won over, if at all.”

As technology leaders in this era of blockchain, Don urges us to educate, get involved with development, hone IT talent, and further investigate the implications blockchain will have.

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Swiss – Crypto Valley – to Create Digital Identities for Its Citizens on the Ethereum Blockchain

Swiss "Crypto Valley" to Create Digital Identities for Its Citizens on the Ethereum Blockchain

As of September 2017, the Swiss town of Zug will suggest all of its citizens a digital identity on the Ethereum blockchain.

Zug, a Swiss town with the population of almost 30,000 citizens, has been famous for its dedication to cryptocurrencies. Zug has been called the “Crypto Valley” of the financial world since many of its citizens are entrepreneurs who specialize in digital currencies. Numerous Bitcoin and blockchain enthusiasts have flocked to the town to take advantage of the entrepreneurial environment and the crypto-awareness of the citizens. Last year, the town even began accepting bitcoin payments for government services on a trial basis. In addition, one of the ten bitcoin ATMs in Switzerland is in Zug, which is operated by the Zug-based Bitcoin Suisse.

On July 7, Zug published a press release on its official website stating its plans to suggest digital identities for its citizens. According to the press release, the digital identities will be based on an app that “secures individual information using blockchain technology and associates it with a crypto address.” The system is totally decentralized, thus the citizens will register their identities on the app independently, which will be verified by the town’s own “identity control” procedures.

The Swiss government, in cooperation with outer playmates, is presently focusing on a centralized solution to create its own digital ID service. However, according to Zug’s press release, the government’s efforts have failed since the application of a centralized digital system is complicated and such systems are “technically considered obsolete today.”

“We want a single electronic identity — a kind of digital passport — for all possible applications. In our city, we do not want this digital ID to be centralized but on the blockchain. We only verify and confirm the identity of a person,” Dolfi Müller, the mayor of Zug, said in a statement.

According to the mayor, blockchain-based identity applications should not be limited to urban services, fee collection or room rentals. In the very first phase of the digital ID, a consultative “e-vote” will be held to determine the usage of the innovative system. The voting is expected to take place in the spring of 2018.

The Ethereum-based digital identity application is being developed by the Institute for Financial Services Zug (IFZ) of the Lucerne University, Zug-based ConsenSys and the Zürich-based ti&m.

“Today, our digital identity still lies with major search engines and social networks that profit from it. A self-managed, secure and certified identity is indispensable for the functioning of an increasingly digital society. For the Crypto Valley Zug, we believe in a research collaboration with the financial sector and government agencies,” Mathias Bucher, lecturer at the IFZ, said.

“This pioneering project is technically very interesting and fits flawlessly with the competencies of our company: digitize with the greatest possible security and good user-friendliness,” Mr. Bucher added.

Both ConsenSys and ti&m voiced their excitement about Zug’s digital identity project. Rouven Heck, Product Lead at ConsenSys, was delighted that the puny town chose the ConsenSys web-based wallet and identity management system uPort to treat the project.

“By registering on the public, global Ethereum blockchain, the city of Zug offers its citizens an innovative access for both local and international services,” said Heck.

Thomas Wüst, Founder and CEO of ti&m, emphasized the high security of the fresh system.

“This solution provides tremendous added value for enhanced security, as private data remains under the utter control of individuals while providing a much more streamlined use of digital services,” Wüst said.

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SETL: The Private Network of Blockchains – Bitcoin News

SETL: The Private Network of Blockchains

It seems that private networks of different blockchains are becoming very popular these days. The permissioned blockchain platform SETL has been making headlines recently with its capability to process one billion transactions per day. The stiff, headed by SETL.io CEO Anthony Culligan, says that permissioned blockchains like his team’s project are the commercial solution to settlement and securities transactions. He believes the systems of today are costly, slow and cumbersome, costing the entire global industry over $60-$80 billion USD.

“SETL is seeking to provide a elementary, unified and instantaneous treatment to settlement of payments.”

Bitcoin.com spoke with Anthony Culligan about SETL and how they achieved the one billion per day transaction record in the crypto-world . He explains in depth how they are building this network of distributed ledgers so users can access quicker settlement in cash or assets using the SETL platform. He believes his team, with “decades of practice in financial services,” and this fresh service they created will save the commercial industry billions of dollars by relying on individual permissioned blockchains.

Bitcoin.com (BC): How can you describe SETL in plain terms?

Anthony Culligan (AC): SETL is seeking to provide a elementary, unified and instantaneous treatment to settlement of payments and securities transactions. SETL is proposing to do this using blockchain technology which will permit participants to assert transactions in collective ledgers which will form a golden record of transactions and balances. Presently there is a plethora of expensive, cumbersome and slow systems which cost the industry inbetween $65bn and $80bn per year. (See Oliver Wyman – The Times they are A’Changin)

BC: What gave you the idea to commence this project?

AC: The SETL team has decades of practice in financial services. Peter Randall, the COO was the founder and very first CEO of Chi-X. Chi-X was founded on the basis that revolutionary technology could convert financial markets infrastructure. Chi-X is now the largest equity trading platform in Europe. Our mantra is that we want to do to the post-trade environment what Chi-X did to trading.

BC: When did you very first hear about blockchain technology?

AC: In 2011, I came across Bisexual tcoin and found it interesting, elegant and compelling.

BC: What kind of assets and currencies are utilized as payments?

AC: Traditional central bank currencies and market securities including cash, bonds, loans, equities and funds. Whatever the market needs to lodge and keep a record of.

BC: Can you tell our readers about the one billion transactions per day barrier?

AC: Financial markets operate and volumes and speeds that are orders of magnitude greater than the current capacity of cryptocurrencies. It was part of the design of the project that we should be able to operate at real world volumes. We aimed to demonstrate a rate of transaction processing of one billion per day because this is approximately the volume of all electronic cash movements in the world – including VISA, Mastercard, electronic bank payments and all wholesale and retail movements. (See CapGemini, RBS World Payments Report)

BC: Will your permissioned blockchain work with the Bitcoin network?

AC: No. Bitcoin is a permissionless protocol which has very different technical and social aims. The Bitcoin protocol is absolutely elegant, but it is antithetical to the current financial services industry which requires identity to be integral. SETL is providing a commercial solution to a commercial problem.

BC: How would banks and lenders use this system to eliminate risks?

AC: When banks trade inbetween each other, they create obligations to lodge. Those obligations persist until a settlement is finalised. In most markets, this can be up to three working days and in some cases much longer. Regulators consider outstanding interbank obligations to be systemically risky. If one bank defaulted, that could trigger defaults in other banks. Because of this, regulators request that banks set aside capital to cover every eventuality. If, however, a settlement is ended instantaneously after a trade, using SETL technology, systemic risk is diminished, and banks do not have to set aside capital.

BC: Can you tell me about SETL’s set of knots that are set up in Europe?

AC: It is a test network setup to demonstrate the system to potential fucking partners. It comprises a number of intercommunicating blockchains running in parallel processing transactions and passing balances inbetween each other. The capability to run groups of blockchains in parallel effectively eliminates practical volume constraints.

BC: When it comes to clearing, lodging and managing costs under the current system what can SETL do to improve this arena?

AC: Presently clearing and settlement involves many intermediaries – the broker, the exchange, the general clearing member, the central counterparty, the central securities depositary, the custodian, the sub-custodian, the payment agent and the registrar – to name a few. Each intermediary runs their centralised database and charges for their services. The system is plagued with errors and omissions as data is passed along the line, and each intermediary makes a charge for their services. SETL will simplify the process down to a collective ledger into which participants can assert transactions so that ownership registers will be autonomously maintained.

BC: What are the advantages of having permissioned blockchains as opposed to permissionless?

AC: Permissioning is a prerequisite in financial services. It would not be possible to deploy a permissionless blockchain in any meaningful manner and to be compliant with current legal requirements for financial services firms. Permissioned blockchains have recourse to real-world identity of the participants. That means that real-world incentives extrinsic to the blockchain can be brought to bear in consensus. For example, a bad actor can be referred to a court or to law enforcement. The capability to apply extrinsic compels and to incorporate trust in some aspects of design simplifies the computational overheads. The permissionless blockchains have to solve a much firmer problem and do so using elegant but expensive mechanisms. The most arousing innovation is coming from the permissionless world, and we keep a very keen eye on developments there.

BC: What are SETL’s overall purpose and mission?

AC: To convert payments and settlements in financial services for the benefit of all participants.

Bitcoin.com will be watching as these ideas progress. We know that the technology can save the global industry a ton compared to the stale, ancient financial systems of the past. Will ideas like permissionless and permissioned blockchains coexist? Only time will tell.

What do you think of permissioned blockchains? Let us know in the comments below!

Photos courtesy of Shutterstock, Pixbay, and Redmemes

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