Category Archive : Blockchain News

opensea:-from-formula-1-cars-to-crypto-forgeries

OpenSea: From Formula 1 Cars to Crypto Forgeries

Cointelegraph was on the ground at Non-Fungible Token New York City Event to observe the latest and greatest in NFT. Of the many projects and companies in attendance, we caught up with OpenSea co-founder Alex Atallah to learn what his company is all about.

OpenSea is a “marketplace for digital goods, including collectibles, gaming items, digital art, and other digital assets that are backed by a blockchain like Ethereum,” Atallah explained. The whole space has roots in CryptoKitties, but it has grown exponentially since. Now, some of the biggest VCs are eager to invest in it.

Formula 1 car for 416 eths

OpenSea’s marketplace began with CryptoKitties, but the assortment of available products has greatly expanded since. One of the most exciting lots thus far sold on OpenSea was an NFT representing a car in the upcoming Formula 1 game that was sold for 415.9 eths (~$107,000 at the time) in May 2019.

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“I have chatted with the guy. He is a collector, not a Formula 1 collector, but crypto. He is holding it long-term, he believes it will be worth a lot of money”.

Crypto fakes

Ironically, collectibles built on the anti-forgery technology aren’t necessarily immune to fraud themselves. “Yes, we have fakes too. People will copy the smart contract one for one and all the media as well,” Atallah said.

OpenSea generates $2-3 M in monthly revenues and is on the verge of becoming profitable. Attalah is optimistic about the future and expects major game studios to enter the NFT space in the foreseeable future.

cyprus-sec-embraces-blockchain-despite-unregulated-status-of-crypto

Cyprus SEC Embraces Blockchain Despite Unregulated Status of Crypto

The Cyprus Securities and Exchange Commission (CySEC) recently published a report discussing the ongoing activities of its Innovation Hub — a cooperative entity that was launched in October 2018 as a platform for engagement between CySEC and entities operating in the fintech and regtech sectors. 

Nineteen different companies directly engage with the platform, nine of which comprised projects utilizing blockchain. Among these companies were several projects using distributed ledger technology (DLT) to transfer and verify ownership of financial instruments, trading facilities that operate using blockchain, and a venture capital fund investing in virtual currency startups.

The Hub is intended to facilitate knowledge-sharing between regulators and innovators, promote the development of regulations that foster innovation, and ensure compliance within dynamic and emerging tech industries. It also engages with third parties seeking to participate with emerging financial innovations, including law firms, credit institutions, and education institutions.

In a press release, CySEC Chairwoman Demetra Kalogerou describes the Hub as working to strengthen investor protections “by embracing new innovations in financial and regulatory technology,” adding that the regulator’s mission is to “create a robust ecosystem in which fintech firms can flourish responsibly in Cyprus.”

Cryptocurrency activities remain unregulated in Cyprus

Despite the regulator’s efforts to foster innovation within the DLT sector, activities involving cryptocurrencies remain an unregulated activity within the country.

In a recent interview, Kalogerous said the agency is still “evaluating the risk and benefits of crypto innovation to determine whether further actions and legislative requirements are needed to ensure full investor protection.” 

The chairwoman added that CySEC does not wish to act prematurely, as its principal mission is to prevent “any dislocation in an otherwise smooth functioning […] capital market.”

CySEC recently published warnings regarding three unauthorized forex and cryptocurrency brokers targeting Cypriots. CySEC accuses Naga Markets, CALIBUR CAPITAL, and IcFxMarkets of operating illegally within Cyprus, noting that the companies fraudulently claimed to have affiliation with entities regulated within the jurisdiction.

CySEC partners with London university on blockchain project

Cyprus’ securities regulator recently partnered with the University College London’s Blockchain Technology for Algorithmic Regulation and Compliance (BARAC), which researches applications for blockchain technology in automating compliance and regulatory procedures.

Through the project, CySEC is currently investigating technical, legal, and managerial applications of DLT in the services industry.

In 2019, Cyprus’ cabinet published its National Strategy on Distributed Ledger Technologies. The cabinet sought to provide a platform for both public and public-private initiatives employing blockchain applications.

expert-says-new-blockchain-regulation-should-‘nudge’-rather-than-push

Expert Says New Blockchain Regulation Should ‘Nudge’ Rather Than Push

Regulators should aim to influence public behavior rather than rule with an iron fist when it comes to emerging industries such as blockchain.

Two Israel-based academics, Hada Jabotinsky and Nassim Cohen argued this point in a new paper and accompanying brief, published to the University of Oxford Law Department blog on Feb. 21.

The paper proposes an approach that would result neither in an under-regulated free-for-all that leaves consumers vulnerable, nor in heavy-handed prohibitions that stifle technological progress.

Complex new technologies such as blockchain, cryptocurrencies, Internet of Things, and automated cars require ever higher levels of technological literacy. The paper states that, as the pace of innovation gathers speed, regulators struggle to grasp the implications of the products and inventions brought before them. 

What does a “nudge” involve?

The authors argue, “A nudge is ‘any aspect of the choice architecture that alters people’s behavior in a predictable way without forbidding any options or significantly changing their economic incentives.’”

Regulators can nudge the public by drawing attention to particular risks involved in new products, the paper notes. As an example of this, the paper points to the U.S. Securities and Exchange Commission’s 2018 campaign, “HoweyCoins,” aimed at educating investors.

For the initiative, the agency created a website for a fake initial coin offering (ICO), which lured investors with a “too good to be true investment opportunity,” using the same “red flags” the agency found to be common among fraudulent ICOs. The site then redirected those who attempted to purchase the ersatz tokens to an educationally-oriented page on the SEC’s own site.

Further “nudge”-based approaches include the introduction of rigorous disclosure requirements and default or simplified rules, which ostensibly make deviations more unlikely. 

While still often relying on a degree of “gut instinct” on the part of regulators, nudges could prove less damaging to new industries than binding regulations, the paper concludes, leaving some scope for informed and independent choices by the public.

A confused question

The question of regulation continues to divide crypto and blockchain industry leaders: while some perceive its impact to be positive — providing legitimacy in the eyes of consumers and institutions — others contend that intervention too often stymies new thinking, investment and grassroots development.

Specifically with crypto, moreover, regulation often rattles those committed to the technology’s libertarian roots: last year, the Winklevoss twins’ ad campaign, “crypto needs rules” for their Gemini exchange was taken to be anathema to crypto’s founding principles by some in the industry.

aussie-blockchain-startup-tells-gov’t-its-tax-laws-are-stifling-icos

Aussie Blockchain Startup Tells Gov’t Its Tax Laws Are Stifling ICOs

You need nothing short of “a miracle” to succeed with an initial coin offering (ICO) in Australia, a local industry leader told the government this week.

At a Select Committee on Financial Technology and Regulatory Technology hearing on Feb. 20, Dr. Jemma Green said her blockchain firm had succeeded despite, not thanks to, government policy. 

Dr. Green is the executive chairman and co-founder of Australian blockchain energy firm Power Ledger, which develops blockchain-based software for decentralized energy trading. ZDnet reported her remarks on the day of the hearing.

Tax system not “fit for purpose”

Dr. Green appeared before the committee in her capacity as a fellow of domestic blockchain industry body Blockchain Australia. Earlier this year, Blockchain Australia published a report, together with the RMIT Blockchain Innovation Hub at RMIT University, providing detailed recommendations for the taxation of ICOs.

Drawing on this research, Dr. Green argued that current policy adversely impacts local ICOs by classifying their proceeds as income, in line with legacy tax guidelines. She stated:

“Many countries —- for example Switzerland —- are changing it to put them on capital accounts, which is moving the taxing point to when proceeds are used to build a platform which generates income. In Australia, the proceeds are being taxed as income and as a result of this, Australia is not an attractive proposition to undertake one of these ICOs.”

Blockchain Australia advocated a policy that would apply the same treatment to ICOs as that offered to firms’ proceeds from a traditional capital raise.  It would then apply this to all projects, including the early offerings that launched back in 2017.

Dr. Green pointed to the report’s findings that, while globally $26 billion has been raised through ICOs to date, Australia has captured just 0.79% of this market. 

Power Ledger, which has expanded to nine countries, owes little of its success to the government’s approach, in her view. Dr. Green went so far as to argue that:

“It’s really kind of a miracle that we exist in the first place, but there could be many of these miracles if we actually set the tax regulation around ICOs to be fit for purpose.”

Revising the system could reap benefits for fiscal revenue too, she claimed, allowing the government to capture the “bounty” when such firms become profitable. 

Speaking to Cointelegraph, Dr. Green pointed to challenges for the industry in Australia that extend beyond questions of taxation. She wrote:

“Education will play a significant role in achieving real, progressive change in Australia. We can’t expect policy makers to embrace emerging technology and a new system that they fundamentally don’t understand.”

New guidelines

As Cointelegraph previously reported, the Australian Securities and Investment Commission last year revamped its ICO and cryptocurrency trading framework. Its intervention, however, notably omitted any update to taxation and consumer protection policy, for which it referred industry participants to existing approaches as determined by other regulators.

juventus-soccer-club-offers-digital-trading-cards-through-sorare

Juventus Soccer Club Offers Digital Trading Cards Through Sorare

The Italian soccer team Juventus has a number of traditional collectibles available for purchase by its fans, but this week it’s taking them into the digital age. The sports club announced on Feb 19. it would be offering digital trading cards of its players through the blockchain-enabled platform Sorare.

By using Ethereum technology, Sorare will provide digital cards that soccer fans can collect and trade. The cards function like non-fungible tokens and will feature star players like forward Cristiano Ronaldo. 

Used in conjunction with the platform’s fantasy soccer game, the cards can be used to create teams, compete in tournaments for cryptocurrency prizes, and trade in secondary markets. According to Sorare, some of the rare cards have sold for over $2,000. 

In a press release obtained by Cointelegraph, Sorare CEO Nicolas Julia spoke on the new deal:

“We are very proud to have signed this agreement with such an Italian heavyweight. We see this as a new key step in our vision to onboard the best soccer clubs from around the world and bring blockchain-gaming to football fans around the world.”

Cryptocurrencies being introduced to sports

This is hardly Juventus’ first foray into crypto and blockchain. Last December the team announced they would release their own blockchain token with Socios for fans to participate in voting and polling. FC Barcelona followed suit in February, partnering with Chiliz to create the Barca Fan Tokens.

Other sports teams in Europe have already signed similar licensing deals with Sorare, including Atletico Madrid, AS Roma, and Porto.

the-future-of-crypto:-the-latest-cryptography-advances-set-to-change-blockchain

The Future of Crypto: The Latest Cryptography Advances Set to Change Blockchain

Cryptocurrencies could not exist without cryptography. Advances in this field can have far-reaching impacts on blockchain technology and its potential. We will examine the opinions of industry experts on the latest cryptographic advances and their potential for cryptocurrencies.

Zero knowledge proofs: more than just privacy

Director of research at blockchain firm Blockstream and mathematician Andrew Poelstra told Cointelegraph that zero-knowledge proof (ZK-Proof) systems are “one of the most exciting areas of development” in the cryptography space. This kind of cryptography is known and appreciated for being the basis of privacy-preserving solutions.

ZK-Proofs are the basis of the privacy-preserving technology included in so-called anoncoin Zcash (ZEC). According to Poelstra, cryptographers have made significant progress in the application efficiency of this technology and now work “with more robust and well-accepted cryptographic assumptions.”

Blockchain firm Suterusu is currently working on implementing ZK-Proof-enabled privacy as a second-layer solution on top of Bitcoin and Ethereum’s blockchains. The company’s chief technology officer Huang Lin — who claims to have researched cryptography for over a decade — told Cointelegraph:

“Efficient zero-knowledge proofs, when they are applied to decentralized anonymous payments, can significantly improve both its privacy and performance.”

Lior Yaffe the co-founder and managing director at Jelurida — the firm behind blockchains NXT, Ardor and Ignis — also said that ZK-Proofs can have a very positive influence on scalability. He explained:

“Instead of generating large blocks of transactions and propagating them through the network miners can use ZKP to generate small data sets only showing the account balance changes plus a cryptographic proof that no double spend occurred.”

Syscoin (SYS) co-founder and lead core developer Jag Sidhu said that new recursive ZK-Proofs could allow for private transactions that are cheaper, smaller and just as fast as normal transactions.

ZK-Proof-enabled Bitcoin sidechains

In the past, Poelstra suggested that ZK-Proofs also allow the development of trustless sidechains, which could bring the functionality of altcoins to Bitcoin (BTC). In February 2019, he illustrated the requirements of such a system while talking to Forbes:

“I think that now if we want to do a real two-way peg, we probably need to get like full, efficient, general-purpose zero-knowledge proofs, and we need a way for Bitcoin validators to be able to validate what’s happening on the sidechain before allowing pegs to come back.”

When Cointelegraph asked him about developments in ZK-Proof-based trustless sidechains, Poelstra explained that much work has to be done before such systems become feasible. He explained that efficient ZK-Proofs would enable verifying if the rules of another blockchain were followed, and Ethereum scaling solution Plasma in an example of this.

Still, Poelstra also explained that employing such techniques for sidechain verification “would require new proof systems which are many orders of magnitude more efficient.” Furthermore, to implement such systems researchers would first need to solve complex incentive problems. He concluded:

“As a community we continue to move forward toward these goals but we’re still a long way away.”

While a promising field of development, Bitcoin sidechains so far had only limited success. In fact, as of mid-October 2019, only almost $77 million of Bitcoin — about 0.054% —  were locked on sidechains. During the same month, Blockstream CEO and co-founder Adam Back gave an apparent reason for the slow sidechain development when he said that there’s a greater financial incentive to creating altcoins compared to building on Bitcoin.

ZK-Proofs can make Bitcoin more private

Poelstra told Cointelegraph that ZK-Proofs can also make Bitcoin more private and cited Taproot as an example. He explained that Taproot can potentially render any transaction mostly indistinguishable from one another on the blockchain. Still, he noted that “transaction amounts and the transaction graph are still exposed, which are much harder problems to address.”

Lin explained that Suterusu is focused on the development and implementation of “setup-free, efficient zero-knowledge proof scheme with an almost constant proof size tailored for confidential payment in smart contract platforms.”

The firm’s system allows for moving the cryptoasset from the main blockchain on its second-later network and the move it while concealing “both the sender and receiver identity and also the transaction amount.” Furthermore, the solution supports smart contracts. He also expressed the idea that the cryptocurrency space should focus more on privacy.

Post-quantum cryptography

Sidhu also suggested that recent developments in post-quantum cryptography are worth looking into. This kind of cryptography focuses on ensuring that data can still be encrypted and safe from prying eyes once quantum computing reaches maturity. It also addresses fears that recent advances in quantum computing could lead to the end of cryptocurrencies.

Mostly, post-quantum cryptography designs algorithms in a way that attempts to nullify the advantages of quantum computing when compared to traditional computing. He also suggests that Bitcoin was designed with the threat of quantum computing in mind:

“Satoshi saw this coming, which is why he created one way hashes as addresses instead of public keys, as public key cryptography is susceptible to quantum brute force attacks. […] This is also why there is a change address strategy for every wallet.”

Developments in cryptography and their impact on crypto

Yaffe said that multiparty computation (MPC) is one of the most active areas of research in cryptography. He explained the function of MPC to Cointelegraph in the following way:

“MPC enables entities which do not trust each other and might even be negligent or malicious to perform together a computation and agree on the result.”

The consensus algorithms of blockchains are one example of MPC, and progress in this space can bring disparate kinds of progress to the cryptocurrency space. Yaffe also cited verifiable delay function (VDF) as another major development, explaining that it is similar to the algorithms allowing for proof-of-work mining, “but unlike mining, VDF is impossible to parallelize opening the potential for equalizing the playing field for small miners.” Yaffe’s shared with Cointelegraph his prediction of how future blockchains will work:

“Using all of the above I expect future blockchain products would resemble a blob of information for an outside viewer while users actually holding the keys will be able to see the full history of their transactions. Some of these technologies are not ready for mainstream usage yet […] but in the last few years there were many improvements in this area and it keeps improving quickly.”

While not a sidechain, Sidhu’s Syscoin bridge allows users to move value across blockchains without intermediaries or custody just with cryptographic principles. He explained:

“It was meant to be a step in the direction of the cross-chain consensus vision we have where users should be freely able to move across any chain generically choosing attributes such as security, convenience (performance) and technical features of the chain.”

Poelstra also cited interactive multisignatures and explained that this kind of technology significantly simplifies complex contracts such as escrows or the hash timelock contracts needed for the Lightning Network to function. More precisely, this kind of cryptography allows for such contracts to be expressed as a single signature.

united-nations-is-among-new-entrants-in-forbes’-2nd-blockchain-50-list

United Nations Is Among New Entrants in Forbes’ 2nd Blockchain 50 List

Newly released Blockchain 50 list by major finance publication Forbes features some new entrants like major international association, the United Nations.

Shortly after including six blockchain-focused firms into its Fintech 50 list last week, Forbes has released another compilation of 50 global enterprises actively embracing blockchain technology.

Newcomers include the United Nations, China Construction Bank, Square and others

Published on Feb. 19, the new Forbes’ Blockchain 50 list is the second release of its annual Blockchain 50, which was first introduced in April 2019. Similarly to last year’s edition, the new compilation includes industry giants like Amazon, Microsoft, JPMorgan, Google, as well as cryptocurrency-focused firms like Bitfury, Coinbase and Ripple.

At the same time, about half of the firms on the list are newcomers, including the UN, the world’s second-largest bank China Construction Bank, Russia’s National Settlement Depository, and Square, a mobile payment company founded by Twitter CEO Jack Dorsey.

As reported by Cointelegraph, UN secretary-general António Guterres declared last year that the organization must embrace blockchain technology. The official said:

“For the United Nations to deliver better on our mandate in the digital age, we need to embrace technologies like blockchain that can help accelerate the achievement of Sustainable Development Goals.”

Forbes believes that Blockchain 50 members moved from focusing on theory to generating real revenues

According to Forbes, this year’s members have significantly moved beyond the theoretical potential of blockchain technology to generating “very real revenues and cost savings.” As such, Amazon’s blockchain product, Amazon Web Services, was implemented by major global food and beverage company Nestlé to launch a new coffee brand known as Chain of Origin, Forbes noted.

Michael del Castillo, Forbes staff writer who covered the first Forbes’ Blockchain 50 list in April 2019, outlined that blockchain has enabled big global firms to process complex tasks in a much easier way. He said:

“Blockchain started as a way to move bitcoin from point A to point B but it is now being used by a host of big companies to monitor and move any number of assets around the world as easily as sending an email.”

In conjunction with announcing the new Blockchain 50 list, Forbes also announced that it will be hosting its first Blockchain 50 to honor the newest 2020 list members in March 2020.

On Feb. 12, Forbes released its Fintech 50 list, featuring the “most innovative fintech companies” in 2020. As reported by Cointelegraph, the list included six blockchain companies such as Axoni, Chainalysis, Coinbase, Everledger, MakerDao and Ripple alongside payment-focused firms like Plaid, Opendoor and Lemonade. In mid-January 2020, Plaid was acquired by payment giant Visa for $5.3 million.

paxos’-dlt-settlement-platform-is-live-with-credit-suisse-and-instinet

Paxos’ DLT Settlement Platform Is Live With Credit Suisse and Instinet

Paxos, a New York-regulated financial firm and the issuer of a USD-pegged stablecoin, has launched its blockchain-based settlement platform.

After announcing Paxos Settlement Service in late 2019, Paxos Trust Company has launched the product to settle select United States-listed equity trades between the two broker-dealers, Swiss financial services firm Credit Suisse and Nomura Group-owned Instinet, according to a Feb. 20 announcement.

Paxos to apply with the SEC for clearing agency registration later in 2020

As reported, Paxos Settlement Service is being launched under no-action relief from the U.S. major financial regulator, the Securities and Exchange Commission (SEC). The no-action relief means that the agency will take no action against Paxos when the firm starts to roll out its settlement platform.

However, Paxos still plans to submit its application for clearing agency registration with the SEC in 2020 in order to offer its settlement service to all broker-dealers, the announcement notes.

Société Générale to join Paxos Settlement Service soon

Paxos Settlement Service is a private, permissioned blockchain tool that is designed to allow participants to mutually settle securities trades directly with each other. In its first live application with Credit Suisse and Instinet, the service enables the simultaneous exchange of cash and securities to settle trades. The third member, French conglomerate Société Générale, is also set to soon start settling U.S.-listed equities trades with Paxos Settlement Service.

Executives at the joint initiative expressed confidence that the newly launched platform will provide more efficiency and long-term cost benefits in the process of global securities settlement and global trade. Emmanuel Aidoo, head of digital asset markets at Credit Suisse, emphasized that Paxos platform is compliant with relevant regulations:

“The initiative has the potential to deliver great efficiency and cost savings to the post-trade cycle. Paxos Settlement Service introduces blockchain technology that’s compliant with regulations and allows us to take important strides towards evolving market structure and unlocking capital that is tied up in legacy settlement processes.”

Paxos has been supported by multiple major regulators in the U.S. so far. Following approval by the New York Department of Financial Services, the company launched a USD-backed stablecoin dubbed Paxos Standard (PAX) back in 2018. One year later, Paxos launched a gold-backed token based on the Ethereum blockchain, called PAX Gold (PAXG). As reported, the New York State Department of Financial Services approved the altcoin’s issuance, describing it as the “first gold-backed virtual currency in New York state.”

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Sweden Is Testing Its New Central Bank Digital Currency

The country of Sweden has begun testing an e-krona, bringing it that much closer to the proper release of a central bank digital currency (CBDC). The pilot program will be in operation for one year, until February 2021.

If and when the e-krona formally launches for use by the public, the idea is that this blockchain-powered currency would drive conventional payments and banking activities throughout the country. Instead of swiping a credit card or spending fiat currency, everyday transacting can move to the blockchain.

CBDCs are a hot topic these days, and Sweden is the second country (after the Bahamas) to unveil what would appear to be a true, working national cryptocurrency. The Bahamas launched a CBDC pilot program in December and plans a full rollout sometime in the second half of 2020.

China has teased that it is developing its own CBDC, but developments there so far aren’t as cohesive as Sweden and the Bahamas.

Launching a CBDC in Sweden would seem to fit existing Swedish sensibility — the country is already one of the most cashless societies in the world.

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Indonesian Customs Joins IBM’s Blockchain Supply Chain Platform

IBM Indonesia has revealed that the Indonesian Directorate General of Customs and Excise has commenced using the blockchain-based shipping platform, TradeLens.

The news follows several months of platform implementations, with the Indonesia Customs and Excise Department announcing that it would join the TradeLens consortium late last year. 

The announcement has seen Indonesia’s customs department become the 11th government agency to join the TradeLens consortium – of which other members include the customs authorities of Thailand, Azerbaijan, and Canada, among others.

Tan Wijaya, the president director of IMB Indonesia, expressed his expectation that the partnership with Indonesia’s customs depart will “benefit all stakeholders in the entire logistics ecosystem and encourage the overall modernization of trade.”

TradeLense records 10 million events weekly

The TradeLens platform provides APIs that allow supply chain data to be immutably tracked and broadcast using a permissioned blockchain. The company’s stated goal is to facilitate faster trade and customs verification and eliminate paper-based processes.

IBM launched TradeLens in partnership with Danish transport conglomerate Maersk during August 2018. Earlier this month, Maersk estimated that 10 million supply chain events are tracked on TradeLens each week.

At the start of February, US Federal Maritime Commission granted an antitrust exemption to five US-based members of the TradeLense consortium to share data concerning American supply chain events, with an agreement between the five parties coming into effect on Feb. 6.

Indonesian regulators cautiously warm to blockchain

The announcement comes three weeks after Indonesia’s oldest cryptocurrency exchange, Indodax (formerly bitcoin.co.id), received licensing from the country’s Commodity Futures Trading Regulatory Agency (BAPPEBTI).

Operating under the Ministry of Trade, BAPPEBTI oversees cryptocurrency trading activities in Indonesia. Last year, BAPPEBTI mandated that all Indonesian virtual currencies exchanges must register with the institution. The new regulations prompted Indodax to seek licensing, despite the platform having been operational since 2014.