Category Archive : Blockchain News

virgil-griffith-pleads-not-guilty-to-evading-us.-sanctions-in-north-korea-jaunt

Virgil Griffith Pleads Not Guilty to Evading U.S. Sanctions in North Korea Jaunt

Ethereum developer Virgil Griffith entered a plea of not guilty Thursday afternoon in a Southern District of New York courthouse. Griffith is charged with conspiring to violate the International Emergency Economic Powers Act after traveling to North Korea (DRPK) in April 2019 to attend a cryptocurrency conference. 

If convicted, Griffth, who once called himself a “disruptive technologist” whose aim was to “make the Internet a better and more interesting place,” could face up to 20 years in prison. He traveled up from Alabama to attend the arraignment and appeared composed throughout, answering with a firm “Innocent” when Judge Castel asked how he would plea.

According to the government’s criminal complaint in United States of America v. Virgil Griffith, filed Nov. 21, 2019, the U.S. State Department denied Griffith permission to go to the DPRK to attend the conference because of U.S. sanctions against North Korea. But Griffith traveled to the DPRK anyway, via China, and “provided the DPRK with valuable information on blockchain and cryptocurrency technologies, and participated in discussions regarding using cryptocurrency technologies to evade sanctions and launder money,” charged the government. 

During the arraignment in lower Manhattan, defense attorney Brian Klein asked if the government had interviewed other people who attended the April 2019 conference as part of its discovery process, adding, “We think [testimony from] other attendees will help exonerate our client.” 

Klein responded “No comment” when asked by Cointelegraph about the latest developments.

Griffith, a U.S. citizen living in Singapore, was arrested on Nov. 28 as he landed at Los Angeles Airport. The government’s charges came “after the Trump administration raised concerns over the summer about the national security threat cryptocurrencies pose because of their potential to be used to finance illicit activities,” according to the New York Times. The government’s complaint referenced another individual who helped Griffith to enter the DPRK and may face charges as well, but the government’s attorneys declined to comment further on that point. 

The crypto community is divided in its support of Griffith, Cointelegraph reported on Jan. 9 after Griffith was indicted and released on bail — he remains free, though somewhat exiled to Alabama. “I don’t think what Virgil did gave DRPK any kind of real help in doing anything bad. He *delivered a presentation based on publicly available info about open-source software,*” declared Ethereum founder Vitalik Buterin in early December.    

North Korea may be in the early stages of building its own cryptocurrency, in what appears to be an effort to evade U.S.-imposed sanctions, Cointelegraph reported in September 2019.  More recently, the United Nations warned that attending a North Korean cryptocurrency conference in February 2020 would most likely constitute a sanctions violation. 

Judge Castel granted the government a continuance until March 17 to assemble more discovery evidence, the defense to review it and the parties to advise as to further motions.

bitcoin-cash-sees-no-blocks-for-5-hours,-no-significant-backlog-due-to-low-usage

Bitcoin Cash Sees no Blocks for 5 Hours, No Significant Backlog Due to Low Usage

The Bitcoin Cash (BCH) blockchain has seen no new block for five hours earlier today. However, due to low usage, the transaction backlog was cleared without difficulty and normal activity resumed.

Data available on advanced blockchain explorer Blockchair show that BCH block number 620025 was mined at 2:14 on Jan. 30. The next block, number 620026, was found at 7:33 of the same day with 6,950 transactions in 2.33 megabytes, an unusually high number. The following block carried 1,590 transactions in 0.56 megabytes, after which another block has seen a standard amount of about 100 transactions, with regular activity resuming.

For comparison, according to Blockchain.com data, a Bitcoin (BTC) block on average carries about 2,000 transactions. Blockchair shows that Bitcoin Cash, on the other hand, usually sees up to 500 transactions in a single block.

This data means that Bitcoin Cash — which has an average block time of 10 minutes — has seen no new blocks for 5 hours and 19 minutes. Twitter user Whale Panda, a cryptocurrency enthusiast well known by the crypt community, pointed out earlier today that the number of transactions in the block makes it apparent how little use Bitcoin Cash sees:

“BCH has so few transactions that after 5.5 hours of no block it still only fills up 2.3MB.”

Blockchain mining anomalies

Cointelegraph has been unable to determine why the mining anomaly above took place. Slower than usual blocks occasionally happen on the Bitcoin blockchain as well, as shown by occasional reports on the matter.

Earlier this week, the Bitcoin blockchain saw a stale block that was later pushed out of the main blockchain and resulted in a double-spend of about $3. The research arm of cryptocurrency exchange BitMEX explained on Jan. 27 that this is unlikely to be the result of a malicious attack given the low value involved.

Such an event is the opposite of a slow block, since it sees two blocks being discovered very near each other in time, resulting in the need for the community to choose one of the two. Such occurrences are also the reason why transactions are considered completely confirmed only after six blocks on the blockchain include them and not just one.

Proof-of-work blockchains, due to the variety of their users and the random nature of the mining process, often show rare events recognized as occasional anomalies. For instance, in mid-November, Bitcoin’s blockchain mempool was at its highest level since January last year without the expected accompanying spike in transaction number.

Another notorious case of an anomalous Bitcoin block is block number #528249, which had a hash that is very unlikely for a miner to compute. More precisely, it was found that there is about a 0.4699% chance of this block hash being discovered.

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Mercedes Will Use Blockchain to Track Carbon Emissions in Cobalt Supply Chain

Major car manufacturer Mercedes Benz and blockchain startup Circulor are jointly rolling out a pilot aimed at the tracing carbon emissions in the cobalt supply chain.

According to a Jan. 30 press release, the project by Mercedes and Circulor comes as part of the Startup Autobahn initiative, aimed at identifying next-generation automobiles. The companies will deploy blockchain to trace the emissions of climate-relevant gases and the amount of recycled materials along the complex supply chains of battery cell manufacturers.

Mercedes eventually intends to use data collected during this pilot to develop its new carbon-neutral passenger car fleet.

But first is cobalt

The project will initially focus on cobalt supplies, which have recently raised issues related to provenance and ethics. Cobalt is a key mineral for making lithium-ion batteries, with the majority of cobalt production comes from the Democratic Republic of Congo, a region criticized for its unethical cobalt mining conditions. In 2017, the United Nations estimated that 168 million children were in exploitative working conditions globally, with around 40,000 children in cobalt mines in the DRC. That means it’s especially important for companies to know where the materials for its products are coming from.

A blockchain-based pilot program will map the production flow of these materials and their associated carbon emissions, as well as record how much recycled material gets used in the supply chain.

This will purportedly help Mercedes determine whether its partner companies comply with its sustainability requirements, especially when it comes to human rights.

Automakers are gradually embracing blockchain

Mercedes is not the first car manufacturer to turn to blockchain technology on issues of sustainability and ethical product sourcing. Volvo also partnered with Circulor to trace raw materials through the supply chain to its battery manufacturer, and then to Volvo cars.

Indian automobile manufacturer Tata Motors announced its intention to integrate blockchain solutions into its internal processes last September. The firm wants to apply blockchain-based solutions in various aspects of the automotive industry, including parking marketplace, demand prediction algorithm and real-time monitoring of fuel quality.

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What Does Twitter’s New Decentralized Initiative Mean?

Back in December 2019, Jack Dorsey, the founder and CEO of Twitter and payments operator Square, announced a new team dubbed Bluesky, to work on decentralized social media standards. The news has gotten both the crypto and noncrypto communities abuzz — and for good reason.

Mr. Dorsey has not only spoken in favor of decentralized protocols but (as proven by his work at Square) has committed resources trying to get there. Advocates and thought leaders of Web 3.0 such as Vitalik Buterin, Fred Wilson and Brian Armstrong have applauded this decision as a signal of open protocol acceptance. While it’s too early to tell what Bluesky will end up becoming, there is one group who may find this declaration pequliar: Twitter’s shareholders.

Twitter Inc.’s core business model is rent-seeking in nature, taking advantage of the company’s aggregated data and access to attention. This is no secret, and has been a fair trade for users who enjoy an easy interface from a large, secure network. But the model has a downside, as Dorsey himself stated:

  1. “Centralized enforcement of global policy to address abuse and misleading information is unlikely to scale.”
  2. “[Attention-directing] algorithms are typically proprietary, and one can’t choose or build alternatives.”
  3. “Existing social media incentives frequently lead to attention being focused on content and conversation that sparks controversy.”

Decentralized protocols can solve this type of misalignment by economically incentivizing participants to create fair rules, manage engagement, and prioritize network stability. That’s why millions of people have flocked to decentralized platforms like Bitcoin and Ethereum. Twitter’s business model on the other hand, like all centralized social platforms, is built on the opposite principle. Decentralized control and a centralized business model cannot coexist.

Take the issue of fake activity via bots, multiple identities and click farms. Although they diminish user experience and platform integrity, social media services such as Facebook and Twitter are economically incentivized to let them be, as they help juice usership numbers sold to advertisers. It’s no accident that Facebook has previously sold ad space for 10 million more U.S. millennials than exist.

Since advertising is based on clicks and pageviews, cutting down on fake traffic means less profits. Regardless of his personal beliefs, Dorsey has a legal responsibility to his shareholders to maximize profits. A quick scan of Twitter’s periodic letter to shareholders reveals how: by upping the share of “daily active users.” Twitter’s incentive is to remove just enough bots to ensure user experience without wholly solving the problem. And his users end up with a platform that maximizes the quantity of attention over quality of content.

What has Dorsey endorsed?

Can a protocol become a platform, in the way Dorsey has endorsed? Yes, but not without total realignment. Surrendering centralized control of Twitter to a decentralized protocol would mean the end of its current monetization strategy. Failing to do so would cost Bluesky its network effects and relevancy. This is where Dorsey is trying to have his cake and eat it too.

By highlighting the flaws of centralized social media, Dorsey is nullifying Twitter’s long-term business model, the one investors invested in. And by suggesting that Twitter is merely a client of Bluesky, a new team may not succeed, considering the significance of Twitter’s current massive network and access to data.

This tension is not an accident of history, but a direct result of a model that separates owners, users and management into distinct groups with different incentives. Unlike a decentralized protocol, Twitter’s shareholders are not its contributors. Blackrock isn’t writing clever one-liners, nor is Vanguard tweeting out dank memes. They are simply investors in a company that monetizes user data via targeted ads. Twitter took their capital and has an obligation to deliver. As Dorsey states:

“Why is this good for Twitter? It will allow us to access and contribute to a much larger corpus of public conversation, focus our efforts on building open recommendation algorithms which promote healthy conversation, and will force us to be far more innovative than in the past.”

Dorsey’s reasoning on why decentralization is good for humanity rings true. Shareholders should be concerned by that fact, while others may be excited. It’s becoming generally accepted that today’s social media models are not sustainable, further evidenced by the positive reaction to Facebook co-founder Chris Hughes’ argument that Facebook should be broken up. But there too, shareholders should take notice, as any solution to this problem — be it decentralization or anti-trust action — impacts the status quo of these social media models. Regardless, it may be tough for Dorsey to convince shareholders that anything that will “force [Twitter] to be far more innovative” is worth funding.

Bluesky is not Libra, Square crypto is

When Facebook entered full-force into the crypto payments space in early 2019 with Libra, it aimed to disrupt payments — not itself. Dorsey has been attempting the same (quite successfully) through Square Crypto, and while Libra has smart contract capabilities, it doesn’t find purpose in decentralizing Facebook’s algorithms.

There is nothing wrong with profits, and even decentralized protocols enjoy monetization strategies. At odds in this debate is how central the means of monetization are to the success of the network as a whole. The current ad-supported and content-creator-uncompensated model of social media inevitably leads to the worst kinds of content rising to the top. Outrage brings attention, and attention brings ad revenue. The result is “centralized” newspapers leading with gruesome headlines, and Twitter and Facebook hesitating to crack down on outrageous content.

To be fair, decentralization has its own tradeoffs, and there are good reasons why no such platforms or protocols exist today. Dorsey and the founders of other centralized social media platforms deserve credit for getting things to this point. But we shouldn’t fool ourselves into thinking that their pivoting to a decentralized model is a simple switch. It cannot happen without great sacrifice.

Related: User Retention: The Holy Grail for DApps Moving Beyond Buzzword Status

While it’s too early to tell what Bluesky will end up looking like and what purpose it will serve in the context of Twitter, Dorsey’s declaration is a seminal moment for Web 3.0. Furthermore, years of trial and error have proven that decentralized social media has serious obstacles, such as the friction it poses for users and the lack of network effects. Both problems could be overcome if Twitter were to unleash its millions of users and their data onto a decentralized protocol designed by Bluesky. But the company’s shareholders might have something to say about that.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Nir Kabessa is the co-founder of Yup.io and the president of Blockchain at Columbia. Currently a senior undergraduate student at Columbia University, Nir spent his academic years deep in the distributed ledger space serving as a teacher’s assistant for blockchain courses at Columbia and contributing to articles on Forbes, BigThink, Benzinga, Hackernoon and more.

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Coinbase Custody and Bison Trails to Lobby Staking Adoption

Coinbase Custody and Bison Trails have joined the ranks of the Proof of Stake Alliance (POSA), a Jan. 30 press release announced. Together with the alliance, they will advocate for the adoption of clear regulations on staking proceeds, as well as other development initiatives.

The Proof of Stake Alliance is an advocacy group founded in 2019 and featuring more than 18 members. It engages in regulatory and congressional discussions to promote staking-friendly regulation, as well as organizing events and educational initiatives.

As COO at Polychain Capital and POSA board member Matt Perona explained to Cointelegraph, the organization’s primary goal is to change the taxation regime for staking rewards:

“First, POSA is working to address how staking rewards received by token holders are taxed. POSA is currently trying to differentiate tax treatment from bitcoin mining guidance so that staking rewards are taxed on the disposition of the asset (the sale of the reward) as opposed to the receipt.”

Both mining and staking rewards are currently taxed in the U.S. as direct income, which offers a much higher rate than capital gains tax normally reserved for traditional assets.

The role of Coinbase Custody and Bison Trails

The new members of POSA will be helping the alliance to amend this regulation, as both organizations are deeply invested in the staking ecosystem by providing customers with the means to stake their assets.

A white paper drafted by Abraham Sutherland, a professor at University of Virginia School of Law, argues that the existing treatment is unfair.

In addition to its work on tax regulation, the alliance is also engaging with regulators such as the SEC and FinCEN to work on issues related to securities and money services regulation.

Both Coinbase Custody and Bison Trails will assist POSA in its initiatives. Replying to questions about their specific contribution, Perona explained:

“[They will conduct] meetings on the hill with congressional representatives educating them on Proof of Stake based technologies and their potential use cases. Meetings with regulators (SEC, IRS, Treasury, FinCEN) educating them on the intricacies of the technology and building a regulatory framework that allows for the growth and adoption of staking based technologies. Taking part in working groups and helping implement best practices industry standards”

The alliance’s educational efforts do not include institutions, however. When asked whether POSA is making efforts beyond regulator outreach, Perona replied:

“Currently, POSA is focused specifically on engaging with regulators and policymakers and trying to build a regulatory framework that is conducive to the growth of the staking industry. Our individual members might be having those types of conversations [with institutions] but POSA is not focused on that nor is it a function of POSA.”

as-the-wef-warms-up-to-crypto,-its-head-of-blockchain-talks-empowerment

As the WEF Warms Up to Crypto, Its Head of Blockchain Talks Empowerment

The 50th World Economic Forum is over, and Cointelegraph was happy to cover the most important highlights from the event and reflect on the role of crypto in Davos discussions. 

The person who knows more than anyone about the potential that our favorite technology could have on the WEF community is its head of blockchain and decentralized ledgers. Sheila Warren joined the WEF team in 2018, several months before the 48th event was held. Since then, she has been working on promoting blockchain within the world’s most influential economic community.

I talked with Sheila last year, 11 weeks after she had her third baby. We had the interview over the phone because she was feeding her child while talking to me. I was fascinated from the beginning by her unbounded energy in everything she does. Observing such women makes me believe that the combination of professional and private lives is more than possible. It is enough to have a passion and know the basics of time-management. 

Path in tech

After graduating from Harvard Law School, Sheila went to work on Wall Street. There, she worked with traditional banks and hedge funds before getting involved in tech philanthropy.

“So, my clients at that time were people who were really trying to disrupt and apply tech models to philanthropy — i.e., how can we give away money more efficiently and how can we create accountability metrics? And I will say that particularly at that time, West Coast philanthropy was very different from East Coast philanthropy. And it wasn’t that much of a leap for me to realize that there was actually a need for tech innovation in the philanthropic space — which is hardly a novel thing to realize.”

With this realization, Sheila built a product called NGOsource designed to streamline due diligence in the philanthropic international grant-making space “because there’s a lot of money that was frankly wasted in administrative costs.”

The team incubated it within the company TechSoup, where Sheila became the company’s first counsel. According to Sheila, the company has given away around $11 billion dollars in tech products, and it serves as an educator in the civil society sector around the world on the “ill and good” use of technology.

Discovery of crypto

It was in 2015 that Sheila read the Bitcoin white paper and got really into the technology. Before that, she and her husband even owned some Bitcoin, though she “didn’t make the connection between Bitcoin and blockchain for actually quite a few years — like many people who weren’t deeply in the space.”

“And I kind of had this big ‘aha!’ moment. And then, like so many people, I went down the rabbit hole of all the social development cases. I was thinking: My goodness! How could this apply to criminal justice and chain of custody? How could it apply to philanthropic aid? How could it apply to development funding?” 

During her career, Sheila reflected a lot on technological pitfalls, how a technology can take the best of it and how it can be ill-used. Research on data privacy brought Sheila to another realization:

“It’s a very natural extension to thinking about blockchain technology, to realize that a lot of the concerns that we had could theoretically be addressed by this relatively new technology.”

Position at the World Economic Forum

When Sheila learned about a position opening at the WEF through her friends in the State Department, she said:

“I honestly was thinking that they wanted a cryptographer, which I’m not. And it turns out they really wanted somebody who had done policy, who understood tech, and who particularly understood tech-impact and social good — and that was that was pretty much my entire career. And I’ve just been absolutely thrilled with the openness of the forum to really deeply engage on these questions with impact and try to lay the foundational framework of this technology to really achieve transformational social good.”

Sheila was hired in October 2017, not long before the forum in January 2018. That year, the word “blockchain” entered the WEF space for the first time. I remember those first discussions and crypto events, even if held with an outsider manner that was felt in comments we at Cointelegraph acquired from some important WEF guests. But blockchain entered the agenda of the forum, and that was the beginning.

In April 2018 after a private session with “a bunch of CEOs and ministers of governments,” the WEF published a report titled “Blockchain Beyond the Hype,” which differentiated between crypto and blockchain as well as explained what the technology is useful for. 

“I felt a tremendous responsibility after Davos, seeing the absolute insanity in Switzerland to articulate that a lot of this was hype. The idea was: Let’s just put our name out there saying ‘look, there is hype, true, but this technology is also real.’ Both those things are true. Something can be overhyped but still useful.” 

Pragmatic crypto optimism

The WEF has had a constant and steady voice throughout the highs and lows of crypto. And it is particularly pleasurable to see that Sheila does not share this skepticism about crypto. 

“Crypto is the first proven application of blockchain technology. And I think that’s a completely fair thing to say. Think about the internet and pornography: No one likes to talk about that, but there’s a reason that there’s uptake in some of these cases. It doesn’t mean the technology itself is flawed or bad or it could only be deployed for evil purposes. None of that makes any sense.”

How to handle the skepticism? Sheila believes we have to design security around the technology. “We have to be that dramatic about it because of the way that this technology is starting to permeate, because of the nature of the transformation that will actually happen if this ever becomes more normalized or more mainstream.”

She described herself as a pragmatic optimist. This means that, in her opinion, blockchain’s application will remain narrow for quite a while — not so different than other technologies that made their path to adoption, such as the internet.

“I am a Bitcoin maximalist — if you want to put it that way — but I have a much longer time horizon. It’s going to take quite a bit of time and I actually have no problem with that. I think it behooves us to be very thoughtful.”

Sheila also thinks that the problems that exist with Bitcoin are solvable. “I won’t say that they’re completely solvable. I won’t say they are easy to solve. But I think they are solvable. And again, this is reminiscent of the early internet, right? There were all kinds of problems of the early internet and they were slowly and painstakingly solved.”

“What I like and what I don’t like about Bitcoin are the same thing, ironically. I don’t like the fact that we don’t really know about ownership. But I think that Bitcoin has retained its diversification, its decentralization more than a lot of other protocols out there. And so, I think that Bitcoin has possibly partially saved or possibly has a better chance of remaining true to those roots and to its origins.

“I don’t think Bitcoin is going away. I think that it is deeply important to the ecosystem. I think that its maintenance and its enhancement is deeply important to the entire ecosystem. And I think that it will always have a certain unique role to play. Whether that expands and becomes like the one coin to rule them all — or the one protocol to rule them all — is a matter of ‘let’s wait and see what happens.’”

How blockchain can tackle the erosion of trust in public institutions

Experiments with blockchain are taking place in various countries, but it is interesting to note that Sheila’s enthusiasm mainly lies in observing developing countries’ experiments with blockchain. 

“There’s a lot of opportunity outside of the G-7 or even the G-20. I actually think this technology has the potential to elevate some of those economies. Decentralization is not a radical concept in many parts of the world. It’s kind of already happening socially.”

As an example, Sheila mentions adoption of such innovations as WhatsApp and WeChat, which first blew up in places outside of the United States “I was on WhatsApp with my cousins in India years and years before any of my friends in the U.S. used it. The world is big.”

Thus, the WEF is conducting projects in such countries as Colombia, where it is applying blockchain to enhance government accountability and to reduce corruption — so practically, to rebuild trust.

“I actually think that this technology — if it’s done correctly, and if the policies around it are designed to mitigate human tendencies toward things like corruption — could provide access to information that could enable third parties or other groups to actually come in and conduct audits. You could actually stem the drop off of trust in public institutions because, in my opinion, that is one of the biggest crises we face.” 

Latest WEF developments

In May 2019 the WEF announced the formation of six “Fourth Industrial Revolution councils,” dedicated to different technologies — one of which is following blockchain.

That was in part a result of realizing that the WEF has tremendous credibility as a trusted source for cutting-edge information. The forum is also a place that is trusted by institutions, and they participate in its meetings in full privacy.

“We are a trusted place for a lot of these world leaders to come and experiment and share both their challenges and their concerns, but also their successes.Within the six technologies we chose, blockchain is key among these — perhaps even more than any of the others. Because it’s such early days still, the forum’s voice can be really important. And central banks really trust us to appropriately share what they’re all thinking about, trust us to bring the right experts to the table to help educate them about the technology.”

The council is comprised of geographically and gender-diverse members (over 40% are women) as well as use cases: banks, regulators, governments, social enterprises and startups. It also represents different opinions on crypto — from Bitcoin maximalists to blockchain skeptics. 

The discussions on adoption of blockchain technologies keep coming. The WEF is educating regulators and institutions, helping them be less frightened and embrace the new technology. Thus, at the last forum, the WEF announced its decision to establish a global consortium for governing digital currencies, and it also released its “CBDC Policy-Maker Toolkit,” which is designed to help central banks create their very own state-backed cryptocurrencies. 

“We need to build this technology because someday, people’s lives are going to be at stake because of the security around it.”

“This technology is about empowerment”

Being a powerful woman is also about believing in what you do and its potential to make the world better. I couldn’t help asking Sheila how she would explain blockchain to her daughters. She said: “Now, I’m rather like ‘Mommy is working on a different kind of money’ and ‘Mommy thinks technology can help people.’”

“What I’m going to tell them is that this technology is about empowerment. It’s about giving them power in a system that may have been set up to disempower them. I would like them to take away why I am so invested in this technology, why I’m so passionate about it and why I truly believe it can be transformative.”

“We are brown women, we are minorities in the country that we live in. And part of what I always tell my daughters is that ‘your voice is your power and you use your power, you use your voice to not just help yourself, but to help other people — to help people that don’t have access to their own voices for any reason.’ We have to be very mindful of the fact that people aren’t always treated the same.”

Her daughters should be proud of their mother, and the blockchain community should be proud of its advocate.

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Former Coinbase COO Joins Figure, Creator of the Provenance Blockchain Platform

Asiff Hirji has joined Figure, a U.S. lending company utilizing blockchain to process the loans, a Jan. 30 press release revealed. Hirji will be company’s new president, having previously served as president and COO of Coinbase and other financial services companies.

During Hirji’s two year tenure at Coinbase, he is credited with growing the company to over $1 billion in revenue and overseeing the expansion of its business and management team. Previously, Hirji occupied leadership roles at Andreesen Horowitz, TD Ameritrade, TPG Capital, Saxo Bank and others. 

At Figure, he will lead key business divisions while working to establish the company’s new merchant bank, which will use Figure’s blockchain platform Provenance to facilitate institutional financial services.

Figure currently provides a variety of lending options for consumers. Its primary focus is on home equity lines of credit, a type of loan where home equity is collateralized for cash, even with existing mortgages. The company also offers mortgage and student loan refinancing options.

Customers can gain access to lending through quick and fully digital applications, with the company using blockchain to simplify processing and drive down costs.

According to Hirji, this usage of blockchain technology allows to reinvigorate traditional financing options:

“Blockchain will crash the costs of financial services, making products more affordable and available to all. Figure is one of the very few companies actually turning that promise into reality. The opportunity now is to scale to more financial products and open this capability to all financial institutions.”

Specifically, Provenance streamlines financial operations primarily by removing complex paper document trails, which require qualified custodians and are difficult to access or modify.

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Bank of Japan Must Be Ready to Issue Digital Currency, Says Exec

The deputy governor of the Bank of Japan has said the institution must be ready to issue a central bank digital currency (CBDC) should public demand surge in response to technical developments.

In a strong statement of a future-oriented vision for the bank, Masayoshi Amamiya told attendees at a seminar — as per a Reuters report on Jan. 30 —  that:

“The speed of technical innovation is very fast. Depending on how things unfold in the world of settlement systems, public demand for CBDCs could soar in Japan. We must be prepared to respond if that happens.” 

BOJ: no imminent CBDC plans as of now

Unlike a private, decentralized cryptocurrency such as Bitcoin (BTC), a CBDC is a digital currency issued by a central bank, which has the status of legal tender and other properties of centralized, fiat money.

While Amoyashi did not envision the issuance of CBDCs significantly impacting the effectiveness of monetary policy and its effect on interest rates, asset prices and bank lending, he did identify technical innovations within settlement systems as an area worthy of close monitoring:

“The transmission mechanism […] could become more complicated and difficult (to break down) if settlement systems change.”

The deputy governor also acknowledged academic research into the usefulness of CBDCs for sustaining negative interest rate policies — a feature of Japan’s monetary policy for years, well ahead of recent European development  — and said this aspect was something “worth looking into.”

Nonetheless, as of now the BOJ ostensibly has no imminent plans to issue a digital currency, as it continues to evaluate potentially overlooked implications for monetary policy, as well as security factors.

A global perspective at the start of 2020

This month, the World Economic Forum (WEF) — in cooperation with some of the world’s major central banks — unveiled a CBDC policymaker toolkit, with guidance for thinking through and designing three possible variations of CBDC: retail, wholesale and hybrid.

In the United States, the former chairman of the Commodity Futures Trading Commission, J. Christopher Giancarlo has recently confirmed that a Digital Dollar project and Foundation has now been formed to closely study prospects for converting the dollar into a “fully electronic currency based on blockchain.” 

Both the foundation and Digital Dollar project are supported by global consulting giant Accenture PLC, which has been affiliated with Sweden’s central bank’s own initiative for a digital currency, the e-krona.

Recently, reports have circulated that Hong Kong and Thailand’s central banks have moved closer towards implementing a joint CBDC for cross-border payments.

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Blockchain.​​​​​​​​com Is The Latest to Launch A Fiat Gateway For This Pro-Crypto Country

United Kingdom-based cryptocurrency data and wallet provider Blockchain.com has launched a gateway for the Turkish lira on its crypto exchange.

Blockchain.com is the latest major crypto exchange to join the growing roster of crypto platforms with a direct gateway for the Turkish lira, according to a press release published on Jan. 29. Blockchain has launched full banking integration to enable users to deposit and withdraw TRY on the exchange platform.

Crypto users from Turkey don’t need a third-party payment method to buy and sell crypto on Blockchain.com Exchange. The release says that “Turkish users can now deposit, withdraw, and use TRY to buy Bitcoin (BTC), Ether (ETH) and Tether (USDT) and convert their crypto into the fiat currency of their choice.” 

Turkey embraces crypto

The lira is the fourth fiat currency supported on Blockchain.com Exchange, launched in late August. The platform also supports pound, dollars, and euros. Blockchain.com Co-founder and CEO Peter Smith called Turkey as one of the countries leading the charge to embrace cryptocurrencies, adding that “Blockchain.com is dedicated to providing a fair, global market for Turkey’s crypto traders.”

Peter Smith’s description of Turkey echoes sentiments from Binance CEO CZ, who told Cointelegraph in an earlier Q&A that “Turkey is a vibrant country that has illustrated one of the strongest demands and fast-growing interest in crypto.” Shortly after the interview, Binance added support for buying Bitcoin and other cryptocurrencies with the Turkish lira through a local wallet partner.

Huobi is another global exchange to establish a local office in the country. Their fiat gateway for the lira, first announced at the Eurasia Blockchain Summit last September, is still pending. But the Singapore-based crypto exchange has made some solid moves into the market by joining the Blockchain Turkey Platform and hiring ex-Deloitte Audit exec Alphan Gogus to lead the local efforts.

While planning to keep an eye on crypto, the Turkish government also wants to support the adoption of blockchain in the country. Cointelegraph reported that Turkey has plans to establish a national blockchain infrastructure. As part of the roadmap, the country aims to finish testing of a national central bank digital currency (CBDC) in 2020.

zcash-community-approves-new-mining-reward-distribution-scheme

Zcash Community Approves New Mining Reward Distribution Scheme

A recent poll revealed community support for Zcash mining reward changes, which will take effect in November 2020. 

With the Zcash Founder’s Reward terminating in November, the privacy asset’s mining situation has come into question, a blog post from one of the project’s supporters, Electric Coin Company, or ECC, said on Jan. 28. 

Community votes in new specs

Using a bevy of avenues, including Telegram and Twitter, the Zcash foundation questioned the coin’s community on mining payouts going forward, the blog post read. 

Taking effect in November during the coin’s halving, as per community polls, the new mining reward distribution will be as follows: 80% for miners, 7% for the Electric Coin Company, 5% for the Zcash Foundation and 8% for grants. 

The post explained:

“Grant participants will receive the largest portion of development funds which will further decentralize Zcash-related efforts. Stipulations were also introduced for formal accountability and reporting requirements of each participant.” 

Zcash abandons old format

Born in 2016, Zcash began with a Founder’s reward, built to last until 2020.

As per its original reward structure, Zcash currently pays out 80% of its mining rewards to miners and 15% to founders, investors and other types, with the remaining 5% going to the Electric Coin Company. 

The post, however, noted pending agreement from the Zcash Foundation on the new changes.  

“The Zcash trademark is stewarded by the Zcash Foundation and ECC,” the blog reads. “The agreement stipulates that neither party has independent authority to declare that a specific chain of Zcash can actually be called Zcash.”

Moving forward, the Electric Coin Company and the Zcash Foundation must collaboratively finalize the community-approved proposal, code the changes into the network for a November start date, and wait for the community to join the new upgrade near the end of 2020.

Cointelegraph reached out to ECC CEO Zooko Wilcox-O’Hearn for comment, but received no response as of press time. This article will be updated accordingly upon receipt of a response. 

Cointelegraph also recently covered Roger Ver’s suggested 12.5% Bitcoin Cash mining tax, although the community reportedly shot down the proposal.