What Is AirDrop? How Does It Work?

What Is AirDrop? How Does It Work?

Thomas Prendergast

Policing the wild frontierRegulating virtual currencies and ICOs

Policing the wild frontierRegulating virtual currencies and ICOs

A legal framework for the crypto-sphere is starting to take shape.

In response, national authorities are starting to think seriously

about a legal framework for finance’s unruly frontier. Regulators fret about how to classify ICOs and tokens (are they securities, or not?) and how to tax them. They want to stop their use for such evils as money-laundering and financing terrorism. And they worry about how to protect retail investors from the risk of losing their shirts.

Indeed, scarcely a day passes without a supervisor somewhere calling for tighter regulation, or taking action. On April 6th the Financial Conduct Authority in Britain warned firms offering services linked to crypto-derivatives that they were subject to its rules. On April 10th Taiwan’s finance ministry said it was planning crypto regulation aimed at money-launderers. On April 17th New York state’s attorney-general asked 13 crypto-exchanges for information about their operations, conflicts of interest and safeguards for customers.

Regulators are plotting together as well as separately. When the governors of the G20 countries’ central banks met in Buenos Aires in March, crypto was high on their agenda. They agreed that at present these assets are too small to be of systemic importance, but they committed themselves to extending standards to which financial institutions already adhere—such as know-your-customer (KYC) rules and procedures for monitoring unusual transactions—to the crypto-world, in order to thwart the illicit use of virtual currencies.

When bitcoin entered public awareness it was chiefly as a facilitator of anonymous, illegal sales on the “dark web” and as the currency of choice for online ransoms. Many in law enforcement thought its anonymity would make it ideal for criminals of all stripes. But until recently evidence of this was scarce. “The overwhelming view was that crypto-currencies had great utility to cyber-criminals but limited use to other criminals,” says David Carlisle of the Royal United Services Institute, a think-tank. Volatility and illiquidity limited their use for money-laundering. But evidence that crooks are making more use of them is mounting.

The most logical parts of the crypto-infrastructure to regulate are the platforms on which virtual currencies are exchanged for ordinary money. Several countries, such as Australia and South Korea, already do this. The EU’s fifth anti-money-laundering directive, which was passed by the European Parliament on April 19th, also includes measures to regulate exchanges. But many places have no rules at all. That may suit many crypto-entrepreneurs, but not all. Several exchanges are, for example, voluntarily implementing KYC standards (eg, by asking new customers to prove their identities), banning coins promising extra privacy or using software to monitor unusual transactions.

Agreed rules would help to tie exchanges into the mainstream banking system. Many of them currently choose unfussy jurisdictions or institutions, because conventional banks will not serve them. Lenders are wary both of credit risk and of abetting crime if exchanges don’t police users. Proponents of regulation say that once exchanges operate in a clear legal framework, those risks should be reduced and banks will take them on. That in turn will make it easier to keep an eye on exchanges.

Regulators disagree about consumer protection. Some see shielding investors from harm as their job; others think people should be free to gamble if this poses no wider risk. Many have warned investors to be wary of ICOs. Some authorities want both to protect consumers and to allow legitimate crypto-businesses to flourish in their jurisdictions. Gibraltar already licenses some crypto-companies. France is working on a system of voluntary licensing. Iqbal Gandham of CryptoUK, which represents some of Britain’s largest crypto-companies, believes such initiatives could help legitimate businesses gain access to banks and perhaps even advertising. “We also don’t want to have criminals on our platforms,” he says.

Authorities also worry about taxation. They spy a new source of revenue: because trading crypto can be lucrative, they are keen to levy capital-gains tax on any profits. And they fear losing existing income: virtual currencies might be used to hide money. Because most exchanges have operated in the dark, reliable data on crypto-evasion do not exist. Most countries are still working out how to define tokens, let alone tax them. Some are stepping up, however. In February Coinbase, an exchange, said it had unsuccessfully fought an American court order and would have to hand the identities of 13,000 customers to the Internal Revenue Service. Other exchanges have fled to offshore jurisdictions with more favourable tax regimes.

With so many poorly understood risks, some regulators think the only safe answer is to shut the whole crypto-sphere down. China, for example, has banned ICOs and exchanges. But elsewhere this is neither desirable nor practical (it requires tight censorship of the internet). Crypto-enthusiasts see parallels with the early days of the internet, when authorities also strove to control a new arena—and declared it a nest of criminality. Most countries have since decided that the web’s benefits outweigh its costs. It is too early to say whether this will be true of crypto-assets or the blockchain technology that underpins them. But it would be wrong to outlaw them before knowing the answer.

Policing the wild frontier:

Regulating virtual currencies and ICOs
https://www.economist.com/news/finance-and-economics/21741191-legal-framework-crypto-sphere-starting-take-shape-regulating via @TheEconomist

Original URL
https://www.economist.com/news/finance-and-economics/21741191-legal-framework-crypto-sphere-starting-take-shape-regulating

Contributor
Chuck Reynolds

Thomas Prendergast

ILPs May Replace ICOs as a New Form of Fundraising

ILPs May Replace ICOs as
a New Form of Fundraising

Although initial coin offerings (ICOs) are seen as a legitimate means

of raising capital, there are no clear legal and technical controls. Initial Loan Procurements (ILP), are, however, an alternative to the risky ICO model. ILPs enable decentralized crowdfunding opportunities by creating a contractually bound agreement which minimizes the risk of ICOs.

According to Carey Olsen’s senior associate Luke Sayer, instead of coin acquisitions, borrowers and creditors “enter into a loan agreement through legally binding smart contract. With an ILP, a creditor’s investment is contractually tied to the performance of the company.” Therefore, if the company is profitable, the creditor receives annual returns.

Estonia-based startups Blockhive and Agrello have partnered to launch the first ILP called ‘Blockhive.’ Instead of issuance tokens, borrowers have a “contractual entitlement to 20 percent of their annual operating profits.” The goal is to continue decentralized crowdfunding with greater protection for borrowers, improved functionality without the interferences of government regulations.

Problems with ICOs

According to a report by Fabric Ventures and Token Data, startup companies raised $5.6 billion in 2017 through ICOs. While the ICO model of raising capital has great potential for high returns, it has become significantly scrutinized. “I think a lot of what’s happening in the ICO market is actually fraud, and I think that will (eventually) stop,” said Brad Garlinghouse, CEO of Ripple to CNBC.

Unfortunately, many ICOs were scams that extorted money from unsophisticated investors. While they pretended to have a genuine and viable product, once the ICO finished, the website and product information disappeared. Investors, therefore, receive a token that has little to no value. While many ICOs back “high-quality projects… there have been a lot of copycat projects where people copy all the same materials (and) don’t intend to deliver any value to the people buying the tokens,” said Joseph Lubin, co-founder of Ethereum, as he told CNBC.

In response to the high level of ICO scams, the Government of Gibraltar, a British Overseas Territory on Spain’s South Coast, and Gibraltar Financial Services Commission (GFSC) on February 12, 2018, confirmed that they were developing legislation in regards to tokenized assets. “Token regulation is the natural progression following the regulation of DLT Providers, being vital to the protection of consumers,” said Sian Jones, Senior Advisor on distributed ledger technology (DLT) at the GFSC. “One of the key aspects of the token regulations is that we will be introducing the concept of regulation authorized sponsors who will be responsible for assuring compliance with disclosure and financial crime rules.”

ILPs: an alternative to ICOs

Agrello, a legal startup that builds legally-binding contracts on the blockchain, and Blockhive are currently working together to launch the first ILP called ‘Blockhive.’ Blockhive will use the Agrello ID that provides support for all legal requirements which include Know Your Customer (KYC) and anti-money laundering solutions.

Agrello’s agreement also ensures that creditors’ data is encrypted and stored on the blockchain network. Users must register to receive the protocol’s Future Loan Access Tokens (FLAT – transferable loans assigned to third parties) as soon as they lend their funds to Blockhive. Once registered with the tokens, users can access and transact on the Blockhive platform. Unlike ICOs, ILPs can reduce instances of fraud and money-laundering. With new functionalities that prevent scams, ILPs may enable decentralized crowdfunding opportunities without restrictions from regulatory bodies in the future, if it becomes widely adopted.

Authored by
Cindy Huynh

Cindy is a writer, digital marketer and content creator from Australia. She is currently a digital nomad fascinated by blockchain technology. Cindy believes blockchain technology and cryptocurrencies can disrupt existing industries and has the potential to revolutionize the world. In her spare time she enjoys learning new ideas and scuba diving with friends.

Tags – blockchain, cryptocurrency, finance, fintech, ICO, ILP, regulation, startups, technology

Original Site
https://btcmanager.com/ilps-may-replace-icos-as-a-new-form-of-fundraising/?utm_source=Telegram&utm_medium=socialpush&utm_campaign=SNAP

Thomas Prendergast

Fear and HODLing at MIT: Blockchain Experts Weigh Impact of SEC Action

Regulation: It's good for you,

but it's going to hurt. That seemed to be the main takeaway for the cryptocurrency industry from Monday's Business of Blockchain conference at the Massachusetts Institute of Technology (MIT). On the one hand, the event was clouded by speculation that the U.S. Securities and Exchange Commission (SEC) may go as far as to classify two of the top three coins by market cap, ethereum and Ripple's XRP, as securities. Such a determination could subject a wide swath of industry members to legal penalties – far beyond the promoters of recent initial coin offerings (ICOs) who were already on alert the last few months. Those fears were reinforced late in the day when Gary Gensler, an old lion of financial services regulation, confirmed for the crowd that in his view, bitcoin's two largest rivals may fit the description of securities in U.S. law.

"Ripple Labs sure seems like a common enterprise, or the Ethereum Foundation in 2014," said Gensler, a former chairman of the Commodity Futures Trading Commission. "Ripple is doing a lot to advance the value of XRP." (The so-called Howey test says something is a security under U.S. law if it is an investment in a "common enterprise" offering an expectation of profits from the efforts of others.) Yet, on the other hand, the general sentiment at the event was optimistic about regulators' growing involvement in the space.

Neha Narula, director of the Digital Currency Initiative at MIT Media Lab, for example, told CoinDesk insufficient regulation can actually stifle innovation by deterring honest players because rampant scammers undermine market integrity. And aligning with Gensler, Narula said, there need to be more honest conversations about the fact that many emerging cryptocurrencies are actually securities. However, there may not be a bright line separating the two.

As Narula said:  

"We're realizing money versus equity isn't a binary choice. It's a spectrum."

Coming pain

And that realization could have a serious impact on the cryptocurrency industry. Patrick Murck, counsel at Cooley LLP and fellow at Harvard's Berkman Klein Center for Internet & Society, told CoinDesk the token economy could be on the verge of a dramatic shift if the SEC agrees with Gensler. If ether and XRP are deemed securities, cryptocurrency exchanges and general industry promoters or foundations, or anyone who sold or evangelized projects like ethereum to the general public, could be subject to legal penalties.

"It would be like shooting fish in a barrel," Murck said, adding:

"There's nothing magical about the blockchain that absolves you from investor protection regulations if investors have to trust you to deliver something."

Driving that point home, Gensler in his talk cited several reasons that the way ethereum and XRP were issued and traded seemed to meet the definition of securities.

For example, the 2014 ethereum crowdsale would have created an expectation of profit for the people who purchased tokens before the network went live. "The Ethereum Foundation offering had a 50 percent appreciation right in the first 42 days written into the offering," Gensler said on stage. (The industry think tank Coin Center in Washington, D.C. promptly issued a statement that "ether is not a security," rebutting Gensler's argument.)

Meanwhile, for issuers of new tokens, it's almost impossible to walk the line, even with more feedback from regulators and lawyers. For example, so-called airdrops, once viewed as a way to avoid breaking securities laws by simply sending free tokens to people who already have some type of cryptocurrency wallet, are instead creating a damned-if-you-do, damned-if-you-don't situation.

If issuers fail to collect information about recipients of airdrops, they may inadvertently violate international sanctions (what if that wallet belongs to someone in Iran?). On the other hand, if they do collect such information, the airdrop may start to look like an investment in regulators' eyes, according to Murck. "The SEC has interpreted the first prong of the Howey Test broadly," Murck told CoinDesk. "The collection of information may be enough to fit the first prong" – pegging an airdrop as "an investment of money."

Long-term gain?

Even so, Murck joined others at the conference in welcoming regulators' participation in the space. "They're becoming a part of our blockchain community and that's a valuable thing," Murck said. Part of the value is clearing up uncertainty. The shortage of such clarity was illustrated during a talk by Kathleen Breitman, a co-founder of the Tezos project.

When asked whether securities regulations apply to her project's tokens, Tezzies, she responded:

"I don't know. I don't mean to play coy, I'm not just an attorney…I would recommend token holders comply with relevant laws."

But Gensler said legal clarity is slowly emerging in this red-hot market. "If you do an issuance now, in April 2018, do it under U.S. securities laws," said Gensler, who is now a senior lecturer at the MIT Sloan School of Management, "It's better to bring it into a public policy framework, even if there's a little bit of a chill." And perhaps some cooling off would be healthy. MIT's Narula said she is deeply concerned about the lack of due diligence completed for many, if not most, cryptocurrency projects. Just because the code is open source doesn't mean that knowledgeable people have evaluated it.  

"A lot of investors don't know that. They go by signaling," Narula said. "A lot of projects have had some pretty fundamental flaws that were exposed only after a project launched." If nothing else, the excited chatter in the halls of MIT suggested that regulatory encroachment has yet to put a damper on the energy being channeled into blockchain tech.

Amber Baldet, the former JPMorgan Chase blockchain expert, said what makes her optimistic about the space, writ large, isn't skyrocketing coin prices or even regulatory clarity on the horizon. It's the explosive growth of this community in the wake of the 2017 boom. "In order to have an internet of value, people are going to have to interact with each other," Baldet said, speaking to the need for an ecosystem that includes everyone from enterprises like her former employer to accredited investors to retail investors.

She concluded:

"You meet thousands of people tackling these challenges in unique ways."

Authored by

Leigh Cuen

Leigh Cuen is a tech reporter covering blockchain technology for publications such as Newsweek Japan, International Business Times and Racked. Her work has also been published by Teen Vogue, Al Jazeera English, The Jerusalem Post, Mic, and Salon. Leigh does not hold value in any digital currency projects or startups. Her small cryptocurrency holdings are worth less than a pair of leather boots.

Original Site
https://www.coindesk.com/fear-hodling-mit-blockchain-experts-weigh-impact-sec-crackdown/

Thomas Prendergast

How Can I Get Free Cryptocurrency From an Airdrop?

In the cryptocurrency space,

already prone to extreme levels of interest by digital money enthusiasts, some of the most-hyped events are airdrops. An airdrop is an event in which a cryptocurrency developer issues free coins or tokens to a user base, sometimes as a result of a hard fork and sometimes as part of a promotion or other change in network design. The key for most investors is becoming aware of the airdrop phenomenon before it takes place. If you find out too late, you've missed out on your chance for free tokens or coins. Fortunately, a report by decentralpost.com provides cryptocurrency investors with tools to gain more advanced notice about these special promotions and giveaways.

Airdrops That Take Place Alongside Hard Forks

One of the most common scenarios in which an airdrop is likely to take place is a hard fork of a major cryptocurrency. More than 20 bitcoin hard forks have taken place in the past year, for instance, and some of these resulted in investors who previously held bitcoin receiving new tokens for simply maintaining their investments. EtherZero, LitecoinCash, and MoneroV were projects that caused a similar level of investor sensation in recent months. In each of these cases, though, time showed that the forked coin was far less important than the original, and the new altcoin eventually lost interest and value.

Staying Apprised

How should an investor go about monitoring upcoming airdrops to make sure that he or she has access to the latest altcoin information? One of the first and most important tools is Twitter. This social media platform has become a hotbed for cryptocurrency investors, and it's common for a digital currency developer to provide information about an upcoming airdrop via a tweet. Investors may even regularly search for the phrase "airdrop" on Twitter, although this can provide a deluge of information that is difficult to sift through. For this reason, dedicated Twitter accounts like Crypto Airdrops and AirdropAlert can be useful.

Besides Twitter accounts dedicated to upcoming airdrops, information about these events can be found at a number of different websites. Of course, there is no guarantee that any information found on Twitter or on one of the sites above will be genuine, or that a newly issued digital currency will not be fraudulent, so investor caution is paramount.

Investing in cryptocurrencies and Initial Coin Offerings ("ICOs") is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns bitcoin and ripple.

Authored by

Nathan Reiff
http://www.investopedia.com/corp/contactus.aspx?writerid=54684&subject=Investopedia Contact Form

Nathan Reiff is a writer and musician based in the New York City area. He holds degrees from Yale University and the University of Michigan. Nathan has previously worked for Orion Consultants and Partners in Performance and has written for Internet Brands on subjects ranging from money matters to personal and home development. His interests include technology, travel, and food.

Original URL

 

Thomas Prendergast

TRON’s $1.7M Airdrop To Ethereum Community Is A Potential Killer

TRON’s $1.7M Airdrop To Ethereum Community Is A Potential Killer

The launch of TRON testnet signals

that TRX will soon leave the ERC20 network and move to its personally developed mainnet, which will provide dependable futures for users and developers. Not long after TRON revealed the launch, it stated that the mainnet will be fully deployed in May and that anything that has to do with TRON will move out of ERC20 network, a platform owned and managed by Ethereum.

Now, the TRON team has aired that it earmarked 30 Million TRX (equivalent to approx. USD$1.7M) airdrop to Ethereum community as an appreciation towards Ethereum for their “support during TRON’s ERC20 phase in addition to preparing for the Super Representative Elections after mainnet launch”.  While TRON is making all these moves, the cryptocurrency is as well revealing it will soon be a competitor to Ethereum, and will soon outsmart the platform by becoming a DApp platform. The revelations did not go down well with Ethereum, resulting in the CEO, Vitalik Buterin saying the project has no soul. There is a sense in accepting that one has competitors, there is also a sense in accepting that one’s competitors are not reliable. Maybe Vitalik has chosen to accept the later and move on.

It is a fact that TRON is now Ethereum’s competitor, and the platform is doing everything to become more acclaimed than Ethereum is. This is visible in Justin Sun, founder of TRON’s statements and body languages. “From today to the last day, we are no longer the ERC20 token and in the future, we will compete with Ethereum as a DApp platform,” Sun had said during the launch of testnet.

“We will compete face to face with Ethereum, and we have confidence we will build a large ecosystem; a much large ecosystem than the Ethereum. I will explain to you why we can surpass Ethereum in the future.” After declaring to be Ethereum’s competitor, the platform unveiled a whopping sum airdrop purposely for Ethereum community. This is a potential killer for Ethereum, it is in many ways!

The Airdrop Is Nearly For Every Ethereum Users.

The airdrop is majorly for those who have a balance of over 1 ETH after January 1, 2018. It appears like TRON wants to give nearly all Ethereum users the opportunity. Doing this will give Ethereum investors an avenue to experience the newest generation decentralized network and participate in community governance because according to TRON, there are many issues on Ethereum platform that TRON has solved on its main Network.

The airdrop as well gives the Ethereum community an opportunity to experience a high transaction per second development platform and use TRX to vote in TRON’s democratic community. This is saying something that the Ethereum community might not understand. Even though the TRON’s team did not state that Ethereum’s platform is not decentralised, they believe theirs is more decentralized, hence, the reason for Ethereum community to have a taste of a new generation democratic platform. This is purely an enticement for Ethereum community, and it may kill Ethereum, or make it HODlers believe in TRON.

Remember TRON is Moving Everything It Has Out Of Ethereum’s Platform?

TRON team will not only migrate to mainnet, it will as well have its DApps which are right now on Ethereum moved to TRON network. At present, TRON has 100 million users on its DApps, and all the DApps will be migrated to the new platform once it is launched.  There is no way Ethereum won’t feel this, but it will feel the $1.7 Million airdrop the most.

TRON Donates 1 Billion USD To Community

Funny how TRON donated $1.7 Million to Ethereum community, and now the platform is donating $1 billion to its community. The fund is purposely for developers and supporters to make TRON grow. Meaning, in few months after the launch, DApps will flood Mainnet and possibly outnumber that of Ethereum. The way TRON is moving, it actually wants to kill Ethereum, or possibly make it hibernate from the crypto space and if possible render its DApp platform useless.


http://ethereumworldnews.com/author/yusuff/
https://ethereumworldnews.com/trons-1-7m-airdrop-to-ethereum-community-is-a-potential-killer/

  • Yusuff Olayode Supoto is a technology enthusiast, book editor, and business developer. He has contributed to Huffington Post, Thrive Global, TheTick Times, The Independent Republic, Oracle Times, among other reliable platforms. Yusuff just fell in love with blockchain, and he’s doing awesome in the space. He roars on many occasions, especially when things go wrong in his country, when Manchester United loses, and when CR7 scores. Yusuff is praying to meet to meet who's who in the blockchain industry, may be in an international conference.

Thomas Prendergast

Cryptocurrency Market Approaching $400 Billion as Bitcoin Tests $9,000

Cryptocurrency Market Approaching $400 Billion as Bitcoin Tests $9,000

 

 cryptocurrency market extended its bullish rally on Sunday,

as bitcoin and the major altcoins continued to test multi-month highs. Buy orders accounted for the overwhelming majority of transactions, giving rise to expectations of a more sustained upswing in prices.

Cryptocurrency Rally Continues

The combined value of all cryptocurrencies peaked at $397.2 billion on Sunday, the highest since Mar. 8. At press time, the market was valued just below $394 billion. Transaction volumes ebbed on Sunday, with daily turnover amounting to $20.8 billion. Volumes were up around $25 billion on Saturday. In terms of individual currencies, bitcoin crossed the $9,000 mark for the second time in as many days. The digital currency was last seen trading at $8,932, having gained 4.8%. However, its share of the total market decline to around 38%.

All major altcoins contributed positively to the rally, with Ethereum gaining nearly 5% to $632. The value of Ripple XRP rose 2.6% to $0.886. Bitcoin cash also extended its bullish rally, climbing nearly 7% to $1,226. Since bottoming at $249 billion on Apr. 6, the cryptocurrency market has added nearly $150 billion in value. Since the market crash of early February, coins have crossed the $500 billion mark on only one occasion, and that was roughly two weeks later. The total market has been capped below $400 billion since early March.

Bulls in Firm Control

The dramatic recovery in cryptocurrency prices can be summed up in one vital statistic: nine out of every ten trades have been buy orders. That figure was as high as 92.9% on Thursday, according to TurtleBTC. Cryptocurrency trading is largely governed by investor sentiment, especially among speculators entering the market for a quick profit. This environment, when combined with thin volumes, often generates sporadic trading conditions that are characterized by extreme volatility.

Sentiment has been overwhelmingly positive over the last two weeks as investors looked to capitalize on extreme oversold conditions. Traders have seemingly shrugged off negative news headlines concerning India’s crackdown on cryptocurrency trading as well as the state of New York’s inquiry into exchanges. There’s strong reason to believe that South Korean traders are playing a major role in the price recovery. According to the most recent volume rankings, three South Korean exchanges are among the top-five in total trading volumes.  They are: OKEx ($1.8 billion in daily volume), Upbit ($965 million) and Bithumb ($751 million).

With the recent spike in volume, cryptocurrencies are once again trading at a large premium in South Korea. This is generally the norm during bull cycles due to high demand and supply constraints. These premiums drew negative attention to exchanges last year as government officials began equating cryptocurrency trading with gambling. Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Authored by Sam Bourgi


Sam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.

Original URL: https://hacked.com/cryptocurrency-market-approaching-400-billion-as-bitcoin-tests-9000/

 

Thomas Prendergast

Genesis London Conference: Study Shows Ethereum is More Decentralized Than Bitcoin

Genesis London Conference:
Study Shows Ethereum is More Decentralized Than Bitcoin


At the Genesis London blockchain conference
held in February by Binary District, Cornell professor, cryptocurrency expert, and computer scientist Emin Gün Sirer said in an interview that a study done by prestigious university Cornell has shown the Ethereum blockchain network is currently more decentralized than bitcoin. Ever since the debut of Ethereum in 2015, false information about the technology and the foundation of the Ethereum blockchain network have circulated around cryptocurrency communities, leading some investors, users, and developers to believe the Ethereum network is inferior to other major blockchains in terms of security and decentralization, given its flexibility and ability to handle large-scale decentralized applications.

A study done by Cornell professor Sirer and researchers at the institution has shown that less Ethereum nodes are linked to institutions or organizations than bitcoin, which means that more nodes on the Ethereum network are operated by individuals rather than companies. “The data shows that the [Ethereum] nodes are both in the latency space, and also geographically more distributed round the world. Ethereum nodes tend to come from all sorts of places, smaller networks, and homegrown entities, as opposed to Bitcoin nodes, which tend to be located in data centres. Our study found that the majority of Bitcoin nodes, 56%, are in data centres,” said Sirer.

Ethereum is structurally and fundamentally different to bitcoin because its network is optimized to handle decentralized applications (dapps). The Ethereum network should be able to process thousands of transactions per second in the long-term to support dapps in the size of Facebook or Twitter, as Coinbase co-founder Fred Ehrsam previously noted. In an interview with South Korea’s biggest mainstream media outlet JoongAng, Ethereum founder Vitalik Buterin emphasized that full scalability of Ethereum could take 3 to 5 years, depending on the implementation process of innovative scaling solutions like Plasma and Sharding.

Sharding significantly optimizes the process of mining through the proof-of-work (PoW) consensus algorithm by eliminating competition amongst miners. Instead of miners spending computing power to win individual blocks, miners can cooperate to solve mathematical problems so that computing power is not lost. Plasma is a highly anticipated solution that is currently being developed by the open-source community of Ethereum developers that can allow various blockchains within the Ethereum network to handle different tasks, to reduce the burden on the main Ethereum blockchain.

At the conference, Sirer also noted that hardware-based technologies such as Intel SGX can help public blockchains like bitcoin and Ethereum to settle thousands of transactions per second. SGX is existent on all Intel devices such as laptops, and with it, users can send zero-confirmation transactions in a peer-to-peer manner, without straining the main blockchain. “SGX is a very exciting technology, and there are other trusted computing technologies, not SGX, but by other vendors, that provide similar guarantees. What that gives you is the ability to know what protocol somebody else is following. That is a fundamental leap.”

In the long-term Sirer said that a rapidly increasing number of institutions, conglomerates, retailers, and companies in general will shift towards the blockchain, moving away from centralized databases. But, because problems surrounding blockchains are very technical, Sirer echoed the viewpoint of Buterin in saying that it could take many years of development and significant resources to properly commercialize blockchain technology.

“Blockchains actually constitute an enormous opportunity to rethink the way we build backend systems. Instead of building things in the old fashioned way, with centralised databases that talk to each other, that need to be reconciled, that need to be kept in sync, we can actually now build much more efficient distributed databases that share information naturally, in a seamless manner,” Sirer added.

Thomas Prendergast

Third Co-Founder Of Centra Tech Charged With $25 Mln Securities Fraud

Third Co-Founder Of Centra Tech Charged With $25 Mln Securities Fraud

The third co-founder of crypto financial services

startup Centra Tech Raymond Trapani has been arrested yesterday, April 20, and charged with securities and wire fraud of more than $25 mln associated with the company’s Initial Coin Offering (ICO), according to the US Department of Justice’s (DOJ) press release April 20. The two other co-founders, Sohrab Sharma and Robert Farkas, were arrested and charged of the same offenses earlier in April. Sharma, Farkas, and the now also arrested Raymond Trapani advertised the “Centra Card,” a debit card that was reportedly backed by Visa and Mastercard, which allowed users to convert crypto into fiat currencies.

The US Securities and Exchange Commission (SEC) reports that no partnership actually existed between Centra and the two credit card companies. According to the DOJ’s press release, after the founder of an unrelated allegedly fraudulent ICO was arrested last fall, Sharma asked Trapani and Farkas to remove all false information, “fufu,” about Centra’s deal with Visa from their website: “I rather cut any fufu . . . Now . . . Then worry . . . Anything that doesn’t exist current . . . We need to remove.”

New York Times writer Nathaniel Popper tweeted an excerpt of the SEC’s complaint against Trapani, referring to the problems the Centra Tech founders ran into by using random people’s photographs as their “team members” online. One solution to the issue of needing to remove the photos when people complained was to invent a fake car accident to kill the fake CEO and his fake wife:

In the DOJ’s press release, Deputy U.S. Attorney Robert Khuzami said,

“As alleged, Raymond Trapani conspired with his co-defendants to lure investors with false claims about their product and about relationships they had with credible financial institutions.  While investing in virtual currencies is legal, lying to deceive investors is not.”

Centra Tech had been promoted by celebrities like boxer Floyd Mayweather and DJ Khaled. Last fall, the SEC had warned the public that celebrity endorsements of ICOs could be illegal if they don’t reveal the compensation they receive for their advertising.

Authored by
Molly Jane Zuckerman

Molly Jane Zuckerman@MollyJZuckerman
reporter
@cointelegraph

Original URL
https://cointelegraph.com/news/third-co-founder-of-centra-tech-charged-with-25-mln-securities-fraud

Molly Jane is a Russian Literature major from California with a background in writing. She joins Cointelegraph after working as a freelance journalist and blogger.

Thomas Prendergast

WikiLeaks Shop Reports Suspension Of Coinbase Account Due To Terms Of Service Violation

WikiLeaks Shop Reports Suspension Of Coinbase Account Due To Terms Of Service Violation

 

 

WikiLeaks Shop, the merchandise arm of international

anonymous publishing non profit WikiLeaks, reported on Twitter Friday, April 20, that their account with crypto wallet and exchange Coinbase has been blocked. WikiLeaks Shop’s tweet contains a screen grab from an alleged email from Coinbase that states the organization violated their Terms of Service and therefore “can no longer [receive] access to [their] service.” Coinbase has not responded to a requests for comments on the specifics of WikiLeaks Shop’s violation by press time.

All proceeds of the shop go to WikiLeaks operations, and customers can pay in Bitcoin, Litecoin, Bitcoin Cash, Dash, Dogecoin, Ethereum, Neo, Namecoin, Vertcoin, Monero and ZCash through Coinpayments.net. The official WikiLeaks Twitter posted a call for a “global blockade” of Coinbase in response to the block: Bitcoin (BTC) advocate Andreas M. Antonopoulos tweeted that Coinbase has “repeated history,” as Bitcoin has played an important role for WikiLeaks from the time when the non profit was legally unable to use traditional banking systems:

Last fall, WikiLeaks leader Julian Assange publicly thanked the US government on Twitter for forcing the organization to rely on Bitcoin due to the banking embargo, giving WikiLeaks a 50,000 percent return. Assange also urged WikiLeaks donors to use cryptocurrencies for their donations as a way to avoid this financial blockade. The WikiLeaks website accepts Bitcoin, Litecoin, Monero, and ZCash for donations.

Antonopoulos added in a comment to his tweet that this embargo by Coinbase is unlike the first in that it is “purely symbolic,” as there are other crypto wallets out there, but that the “symbolism is a pretty poignant reminder of what centralization and banking regulations mean.”

Author
Molly Jane Zuckerman

Molly Jane Zuckerman@MollyJZuckerman
reporter
@cointelegraph

Original URL
https://cointelegraph.com/news/wikileaks-shop-reports-suspension-of-coinbase-account-due-to-terms-of-service-violation

Molly Jane is a Russian Literature major from California with a background in writing. She joins Cointelegraph after working as a freelance journalist and blogger.

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