Channel “Transformer” is a leader in the global blogosphere on the subject.
In the latest issue of may 25, channel anchor Dmitry Portnyagin, along with Azam by Chagaevym, an expert in the field of cryptocurrencies and mining, visited Tokyo, where we went to visit Roger Faith (Roger Ver), General Director and founder of the Bitcoin Cash, the capitalization of which reaches 17 billion $ .
Video bloggers tell the viewer why cryptocurrency and the Blockchain is the future in which we live.
John McAfee said today in his Twitter account about plans to launch its own currency, “McAfee Coin”. Looks like it will be Fitna currency backed cryptocurrency.
. @SmartPayMINT sent this. What’s odd is that tomorrow night I am going to make an announcement of the new “McAfee Coin”, based on a radical new concept: Fiat currencies (collectible) backed by crypto – the reverse of what banks are attempting. Seriously. pic.twitter.com/3uTHHKG18M— John McAfee (@officialmcafee) 29 May 2018
It all started when a little known cryptocurrency exchange SmartPayMINT placed on its platform photo Fiat currency with a face McAfee. Such was the representation of the artist about how it would look likely the currency with the image of John McAfee.
Last week, the name McAfee flashed in many headlines. It was connected with the publication of John’s “Declaration of independence from the currency” which was seen as a landmark event in the history of cryptocurrency. Of course, McAfee will aim to break traditional norms, issuing a currency backed by cryptography.
The collectible currency is a Fiat currency, the value of which is reinforced by the value of the cryptocurrency. Is it really “the other side of what the banks do”.
Fans of John on Twitter began to discuss his idea. For example, user Income Sharks said:
“Good interaction crypts and Fiat. It will be interesting to see how you distribute the coin, if it is true, of course.”
McAfee responded, saying:
“You’re gonna love this!”
User JF Carpio was optimistic to the idea of a new currency, saying:
“Thus we return to the gold standard”.
But a Tanke even invited John to visit:
“Come to Spain, You’ll like it here!”
An hour ago, McAfee made a new statement, confirming their intention to issue new currency:
No hoax. The “McAfee Redemption Unit” is real and coming in 26 days. The graphic is low res – don’t want to give much away yet. Printed on currency paper, holographs on both sides, serialized, linked to the blockchain, redeemable, convertible, collectiblehttps://t.co/ySUwkDuW7s pic.twitter.com/75xTje39X8— John McAfee (@officialmcafee) 29 May 2018
No cheating. “McAfee Redemption Unit” is real and will be released in 26 days. The graphics are not super awesome, but I don’t want to pay a lot. Printed on paper currency hologram on both sides, is tied to the blockchain, ransomed, converted, kollektsioniruya.
Cryptocurrency fraud is not uncommon in our world, and is already quite sustainable. In order not to become a victim should follow some certain rules and be especially careful to check information prior to the conclusion of cryptocurrency transactions.
Ukrainian from Uzhgorod, whose name is kept secret, it seems, was unknown. The man moved a million hryvnia to the card account Privat Bank in exchange for bitcoins, but in the end did not get cryptocurrency. The money also was recovered.
The case would not be available to the General public, if not a motion in the court registry with the request of law enforcement agencies to provide temporary access to things and documents of persons, the ill-fated appropriated one million hryvnias ($ 38.6)
In the judgment the fact that the victim had transferred one million hryvnias to the card account Privat Bank indicated. And that according to the agreement, the suspects had to transfer Bitcoin in exchange for money.
The court granted the investigator the permission for temporary access to things and documents of the attackers, namely the information of the service provider. The investigation is continuing.
331 Japanese Cryptocurrency Investors Made at Least $ 1 Million in Profit Last Year: Tax Agency
Mainstream media outlets in South Korea and Japan JoongAng and Nikkei have reported that the National Tax Agency (NTA) of Japan is fully aware that 331 investors in the Japanese cryptocurrency sector recorded a profit of $ 1 million through trading, generating more than $ 331 million in total.
Chasing Cryptocurrency Taxes
By the end of 2017, NTA reported that 21.98 million in Japan declared taxes to the government, generating more than 41.4 billion yen. The NTA revealed that the amount of taxes it garnered last year increased by more than 3 percent from 2016, primarily due to the improvement in Japan’s economy.
Out of the 21.98 million individuals that filed taxes to the government, 549 individuals recorded a non-operational or non-working profit of $ 1 million, which is often generated by investments into stocks, assets, commodities, and properties. Out of the 549 individuals, 331 were cryptocurrency investors that made well over a million dollars in profit in the Japanese cryptocurrency market.
In 2017, the Japanese government, Financial Services Agency (FSA), and NTA announced that local monetary authorities would tax up to 55 percent on non-operational profit generated by investments. This February, Bloomberg reported that the Japanese government hinted its intent to tax up to 55 percent on cryptocurrency investment, especially on individuals that have made more than 40 million yen, worth around $ 365,000.
But, the Japanese government did not clarify its policy on cryptocurrency taxes and investors admitted their lack of confidence in the cryptocurrency market.
“The government hasn’t clarified certain details, so you’re left unsure whether you’ve got it right or not,” said blockchain technology consultant Hiroyuki Komiya.
In regions like the US, tax agencies and local financial authorities previously challenged companies like Coinbase to chase down cryptocurrency investors to garner taxes. However, in Japan, the NTA stated that all 331 investors declared their earnings from cryptocurrency investment to the government and it remains optimistic in regards to the voluntary tax declaration of cryptocurrency investors.
Still, some industry experts stated that the number seemed too low to be true and emphasized that they suspect many investors have opted not to declare their earnings.
“If the rapid growth of the cryptocurrency sector in late 2017 is considered, 331 is a number that is simply too low to be true. A large portion of cryptocurrency investors probably did not declare their earnings to the government,” said one analyst.
Will South Korea Follow?
Last year, the South Korean government banned local investors from investing in domestic initial coin offerings (ICOs) to “minimise risk.” However, earlier this year, upon the announcement of Kakao and Bithumb to conduct ICOs outside South Korea, the local government stated that it would legalise domestic ICOs once a proper taxation policy is drafted.
“The South Korean government has no other choice but to follow the regulatory frameworks and trends established by other leading governments. While there certainly exists a negative reputation attached to the cryptocurrencies, the government’s stance is to allow what has to be allowed, for the benefit of the South Korean market,” a South Korean government official said.
It is likely that South Korea will soon follow the roadmap of Japan’s voluntary tax declaration system and assist cryptocurrency investors to declare their earnings to the government.
Featured Image from Shutterstock
Written by CCN.com
Bitcoin Addicts Crave Risk, Excitement, Escape
Bitcoin Addicts are a Thing in Scotland
Crypto addicts could do worse, and that’s for sure: Scotland’s Castle Craig Hospital addiction treatment center is a bucolic, sprawling campus seemingly designed to induce calm and reflection. It’s also home to a first of sorts, according to regional press: a concentrated program set to dealing with a growing phenomenon, cryptocurrency addiction.
The hospital’s creative writing coordinator and gambling therapist, Christopher Burn, explains how the “high risk, fluctuating cryptocurrency market appeals to the problem gambler. It provides excitement and an escape from reality. Bitcoin, for example, has been heavily traded and huge gains and losses were made. It’s a classic bubble situation.”
Mr. Burn can be temporarily excused from jumping his lane into speculative finance; a good guess is literally no one seeks him out for economic analysis. But the rest of his point can be valid in the sense of popular anecdotes. At what time in the journey from regular, functional adult to 21 year old Canadian living in a car to save money in order to buy lesser-known crypto, … is it an addiction? What if the example does not involve a ballsy single dude; instead, it’s a family of five with three children, parents in their late 30s, who’ve sold their house in hope of riding the-then booming bitcoin core (BTC) price? Are these examples of addiction or are they simply badass pioneers who know something the rest of us do not?
Is Crypto Just Gambling in Disguise?
Tony Marini, on site therapist, and someone who has also struggled with cocaine and gambling addictions himself, details, “Having been through it myself, my experience of addiction gives me insight and empathy towards others who have the same problem. I see cryptocurrency trading as a way for people to escape from themselves, into another world, because they don’t like the world they’re in. The first stage of treatment is to join other addicts in group therapy and share their life stories. This helps them identify with each other and realise that they’re not alone.”
A recurring word, “escape,” permeates both explanations, still admittedly fuzzy in the way of a solid definition. Nevertheless it does seem if crypto occupies too great (?) a space in a person’s mind, to a point where they chronically ignore real, ongoing life around them, they just might have a problem. And since speculative markets very often evidence fast fortunes gained and lost, and gained and lost again, there must be properties of problem behavior similar to gambling addictions (which have been well-documented).
Experienced in treating addictions such as traditional alcohol and drug problems, Castle Craig Hospital has begun addressing addictions involving cryptocurrency. Indeed, they’re using techniques in the course developed from successful gambling addiction methods. Though more than ten million people worldwide are said to be trading and dealing in cryptocurrency, no firm numbers or percentages exist regarding the amount of people with addictive symptoms.
Written by Bitcoin.com
Draft Law Requires Israeli Firms to Report on Clients’ Crypto Activities
Israeli Ministry of Finance Publishes Draft Money Laundering Regulations
The Israeli Ministry of Finance a draft of the amended Money Laundering Prohibition Order – with the proposed legislation now containing provisions pertinent to cryptocurrencies. The new regulations will incorporate virtual currencies into the regulatory apparatus designed to prohibit money laundering in the financial services sector.
Explanatory notes accompanying the draft acknowledge the intention to expand the regulations to apply to companies providing virtual currency services in addition to mainstream financial services providers, stating: “The definition of a service in a financial asset that comes to replace and expand the term ‘currency services’ includes all the activities and services performed in financial assets through a business that does not involve granting credit. The intention is to enable the supervision of financial services, other than tangible assets or standard financial means, in an area that has been developing in recent years.”
Proposed Regulations to Introduce Suite of Reporting Requirements Regarding Clients’ Cryptocurrency Activity
In addition to incorporating virtual currency services into the legislative apparatus, the proposed regulations will additionally impose a number of new reporting requirements on Israeli financial institutions.
According to local media: “As of June 1, brokers, banks, money changers and cryptocurrency trade and commerce platforms in Israel will be obligated to report any suspicious cryptocurrency activity by their clients […] The draft, which is open to public purview until June 13, specifies 37 money laundering red flags, among them large sums of over NIS 5,000 (approximately $ 1,400 USD) transferred to a digital wallet; any money transfers made using an anonymous IP address or an address that is incompatible with the geographic origin of the connection; cryptocurrency transfers to online gambling sites; and any activity in anonymous cryptocurrencies such as monero or zcash. The draft also states service providers must maintain full documentation of cryptocurrency activity, which includes all parties’ digital wallet addresses, IP addresses, and the type and amount of currency, for a period of no less than five years.”
New Money Laundering Laws to Take Effect on June 1st
Yishay Trif, the chief executive officer of international payments provider, Moneynetint, has indicated that financial institutions have reacted favorably to the proposed legislation bringing greater regulatory clarity regarding the virtual currency sector.
“In order to complete the legal framework for activity in virtual currencies, clear instructions are required regarding the prevention of money laundering and the financing of terrorism. The statement that the area is not regulated is repeated as part of the banks’ automatic refusal to provide services for those who trade in Crypto. Because of this, the steps taken are important and necessary. They provide regulatory certainty to banks and financial institutions and define clear rules on what is permitted and what is not, Mr. Trif stated.”
Meni Rosenfeld, the chairman of the Israeli Bitcoin Association, has echoed Mr. Trif’s sentiment, stating that “On many of the occasions in which banks have refused to accept money that originated with cryptocurrency, we met with the statement that the field is not regulated. The new order will regulatory certainty for those involved in the field, and will define rules that are permitted and forbidden, which will enable banks and financial institutions to know who is compliant with the law, and whose money they can safely receive. The union gave a proposal on the subject to the Israel Anti-Money Laundering Authority several weeks ago, and we welcome the regulator’s quick action to allow those involved in the field to operate.”
Written by Bitcoin.com
Nasdaq Exchange Supports Litecoin, Stellar and Bitcoin Cryptocurrencies
One of the most important exchanges in the United States, has taken important steps to get involved in the virtual currency market. The reality is that crypto exchanges have been profiting from the important influx of new investors at the end of 2017. But which are the cryptocurrencies that Nasdaq is backing?
Stellar, Litecoin and Bitcoin
Stellar is one of the first digital currencies that has been backed by Nasdaq. According to exchange, Stellar has the potential to grow by partnering with enterprises like IBM. The currency allows companies to perform worldwide cross-border transfer which is very useful for many industries.
The Stellar Network has been created and developed in order for financial institutions and individuals to participate on it. It is an hybrid blockchain that is open source and distributed.
Litecoin is another virtual currency that Nasdaq mentioned as one with future potential. Why? Some weeks ago, Blocknet announced that Litecoin will function as a cross-blockchain decentralized application. These kind of partnerships would allow Litecoin and other currencies to keep growing, aggregating value and being used.
Litecoin is known as a cryptocurrency for payments, that has short transaction times, and low fees. It can be used in many different stores and websites and it is listed in an important number of virtual currency exchanges. Moreover, the currency does not want to replace Bitcoin, but instead, complement it.
Finally, Bitcoin has been marked as the favourite cryptocurrency with huge future potential. Nasdaq believed that the Consensus was going to have a positive multiplying effect in Bitcoin’s price. But it did not happen. Bitcoin was not able to capitalize the positive atmosphere at the meeting and grow.
But it is important to mention that Bitcoin will be implementing the so awaited scaling solution known as the Lightning Network (LN). As we wrote some days ago, the LN would help Bitcoin scale reducing transaction times and fees almost to zero. Additionally, the number of users is also expected to grow with this implementation that is also trying to add support to privacy functionalities.
Yesterday the price of Ethereum (ETH) fell sharply by nearly $ 100.
According to TrustNodes, the fall in the price of ETH, at least for Bitfinex cryptocurrency exchange, blame EOS.
Famous cryptocurrency enthusiast WhalePanda also believes that the fall in the price of ETH guilty of EOS:
Just Wondering who ragedumped $ ETH on @bitfinex. Didnt $ EOS still have a lot of ETH and they were using Finex before. pic.twitter.com/l1Hps2jloJ— WhalePanda (@WhalePanda) May 28, 2018
Ethereum currently is trading around $ 525 US, and the fall per day amounted to 3.24%.
Earlier this month TrustNodes wrote that the EOS has spent about $ 950 million at ETH in the previous 30 days. Yesterday TrustNodes said that about 180.000 ETH was sold in one hour Bitfinex. Normal volumes for this cryptocurrency on the exchange Bitfinex, as well as on other exchanges, for example, GDAX and OKEx fluctuate around 20.000 ETH in an hour.
Read also – the Price of the EOS will grow three times by the end of July?
TrustNodes assumes that EOS had initiated such a large sales and ETH note that the EOS has spent $ 1 million to ETH, four days ago, and yesterday increased to $ 1.4 million.
Etherscan shows that the address EOscrowdsale is still about 200 .000 ETH, and the purse EOS is the Owner of approximately 916.000 together is more than 1.1 million ETH.
According to CoinMarketCap, on Bitfinex for the last 24 hours it was sold approximately 238 million U.S. dollars in ETH volume OKEx is less than half that amount, about 104 million U.S. dollars, and Huobi – approximately 98 million US dollars.
EOS, which will launch its primary network on 2 June, currently trading at $ 11, the decline was 9%.
For the first time in the history of the police of the British capital, law enforcement was able to disrupt such a significant real money in cryptocurrency. Law enforcement arrested the hacker and seized his 667000 in bitcoins. Kid faces prison term for committing cyber crimes.
According to City AM, the defendant Grant vest responsible for phishing attacks on more than 100 companies around the world, during which he managed to take control of the financial data of thousands of customers. It is argued that these data then were sold for bitcoins.
In the list of the largest companies attacked include giants such as Nectar, Sainsburys, Ladbrokes, Coral, Argos, T Mobile, Uber and Asda, and these are just some of them.
The largest scale attack allegedly allowed the hacker to retrieve data about 165 000 customers of the company Just Eat.
According to City AM:
“26-year-old from Ashcroft Caravan Park, Sheerness, Kent, pleaded guilty to 10 different crimes. His girlfriend Rachel Brooks, 26, from Denbigh, North Wales, also pleaded guilty to unauthorized use of computer materials.”
Chief superintendent division for combating organized crime of the Metropolitan police said:
“This case proves that our detectives are ready for a long time to pursue infringers on the Darknet. We will use many different measures to identify such criminals, bring them to justice and seizing assets. This is the first time we have arrested the assets in cryptocurrency and we are determined to stay one step ahead of cybercriminals who think they can act with impunity”.
Overall, this is very important news terms of data security, which once again proves how vulnerable users. In addition, the police and authorities will now have to decide what to do with the seized cryptocurrency for quite an impressive amount.
Charges for transactions — a hot topic for debate in the world of cryptocurrency. Especially large-scale battles unfolding around the comparison of Bitcoin with Bitcoin Cash. Oil poured into the fire, fresh screenshot, which clearly shows that the fee of Bitcoin temporarily drops below the cost of their transactional Bitcoin Cash. Of course, the phenomenon was temporary, and at the moment, the situation looks different.
In a direct comparison of the size of the commissions BTC and BCH , it seems that there is no competition and can not be. Transaction cost Bitcoin Cash has always been much lower in comparison with the commissions in the network leading cryptocurrency. In fact, charges in the BCH is not changed for a long time, what can be said about Bitcoin given its volatility.
However, situational screenshots tell a different story. Tweet user Ven Verret informs the Commission BTC was lower than BCH for six hours. However, for a couple of hours of fee in the Bitcoin network has increased again. What are these leaps remains a bit unclear.
Bitcoin fees have been lower than BCash fees in the last 6 hours. pic.twitter.com/XAll68BbC9— Ben Verret ⚡ (@verretor) 27 May 2018
The main question is how the situation will develop further. In particular, the need for faster and cheaper transactions, Bitcoin increases. Lightning Network is designed to help with this. However, the technology is still in beta stage, and the “official” release yet to be announced.
The network of Bitcoin is the high transaction fees, and the situation will not change soon. In this issue of Bitcoin Cash is clearly the leader. But we should remember that Bitcoin has the highest market capitalization, and the Bitcoin Cash remains Aldona.
Blockchain’s Killer App? Making Trade Wars Obsolete
On Hainan Island, China’s Hawaii, in the shadow of sanctions, tit-for-tat tariffs and a looming trade war, China’s paramount leader stood up for globalization last month by launching a surprise defense of world trade. Laudable though his position might be, Xi Jinping’s bargaining position – and that of Donald Trump – may soon be irrelevant.
A confluence of technologies is poised to dramatically reshape the world of manufacturing and, in the process, render obsolete the existing international trade regime. A few get a lot attention: the rise of 3D printing, the application of internet-of-things (IoT) devices to shipping and logistics, the increasing prevalence of artificial intelligence and machine learning.
But it’s blockchain technology, with the capacity it gives to non-trusting parties to transact with each other by relying on a common source of digital truth, that will facilitate this disruption. It provides the enabling platform on which a new dynamic, highly fluid global system for exchanging value will emerge, one that’s far outside the purview of the World Trade Organization’s current “rules of origin” model.
Trade warriors are fighting yesterday’s battles. Instead of pitting their smokestack, 20th-century factories and armies of workers against each other, governments should apply blockchain’s ‘Don’t Trust, Verify’ approach to trade arrangements, using it to reduce trade friction and improve cross-border relations to the betterment of their societies.
What might the roadmap look like? That’s what an ad hoc group of Hong Kong’s leading strategists and business thinkers set out to define when they started meeting privately in late 2016 to explore how to fully digitize trade among the 65-plus countries involved in China’s ‘Belt and Road Initiative’.
The Belt and Road Blockchain Consortium, as our group came to be known, recognized that as supply chains evolve into highly automated, data-driven ecosystems, they will need the transparency, immutability and accountability that blockchains provide.
Verifiability and validity
Already, large-scale enterprises like Walmart, IBM and Maersk are deep in blockchain-for-supply chain research and a clutch of exciting startups such as Provenance and Skuchain are building blockchain-based tools for the supply-chain management industry.
But the consortium recognized two important barriers to the widespread adoption of a global blockchain-based trade architecture. The first concerned the desire for legal certainty, and independent verifiability, of unique blockchain identifiers, which are currently often represented as QR (Quick Response) codes. The second concerned the liability and validity of data written to an immutable blockchain, specifically what to do in the case of erroneous – let’s call it #FakeData.
We felt the history of the Internet’s development offers a useful framework for addressing the question of legal verifiability. We saw that verifying a blockchain address is conceptually similar to resolving cross-border accountability issues with Internet Domain Names, which identified a need for a Blockchain Naming Service (BNS), with common business identity standards to interface with sovereign company registries.
Under this model, if coindesk.com wanted to operate a bitcoin wallet, anyone should be able to verify that a bitcoin address was actually administered by CoinDesk LLC, the U.S. company, and not someone else.
As for the data validity issue, we found that it was useful to borrow some of the thinking behind traditional finance notions of security, specifically the KYC, or know-your-customer concept. The intersection of IoT with blockchains drives a need for hardware integrity, which we call KYM (know your machine).
The need for a mechanism for online dispute resolution (ODR), one that lies outside of the blockchain in question, also became apparent to us. In that case, the blockchain would provide initial evidence to lower the cost of establishing “matters of fact.”
Any new, blockchain-based governance system for the Belt and Road community will need a reliable, trusted jurisdictional home. And for that, we highlighted a key role for Hong Kong, with its access to the free and open Internet, its common law heritage, and a business credo of “public governance/private business.”
Thus we argued that resolving the ‘verifiability and validity’ issues could be addressed by developing open standards for online dispute resolution of blockchain identifiers under Hong Kong law, with legal certainty provided by its Electronic Transactions ordinance (Cap 553).
We adopted an open, bottom-up, opt-in approach inspired by the Internet Corporation for Assigned Names and Numbers (ICANN), which successfully managed a similar global policy endeavor for domain names.
Other standards will also need to emerge in related industries to ensure all parties have confidence in the data being shared in a blockchain environment.
Of particular value was the foundation last year of the Global Smart Container Alliance in Shenzhen to drive standards both for smart shipping containers that record and report the ambient state of their cargo and for “E-locks,” which are used to electronically seal the container for faster customs and duty clearance.
Since March 2016, E-locks have been successfully used between the customs authorities of Hong Kong and Shenzhen, China’s Silicon Valley. By combining legal certainty with cryptographic certainty, the Belt and Road Blockchain will not prevent trade disputes from occurring – they will – but when they do the cost and complexity of having them will be dramatically reduced. And that’s good for business.
Toward ‘pull’ demand chains
One exciting, highly disruptive outcome of blockchain integration into global manufacturing and trade is the prospect that businesses will move from “push” supply chains to “pull” demand chains.
This is the idea that production will be configured in response to – or pulled by – customer demand rather than pre-configured on anticipation of what customers want and then pushed onto them. More than anything, it is going to make trade spats like that of the U.S. and China redundant.
Blockchains’ role in this is to help market participants break up long value chains into shorter ones, with financial exchanges acting as bridges between them. This should result in greater liquidity and enhanced price and market discovery.
I call this “packetizing risk” as the system can automatically dispense fine-grained rewards that can be traced back to the original rights holder based on the presence of appropriate cryptographic evidence.
A model like this could, for example, have allowed businesses waiting on the delivery of goods trapped on the creditor-seized ships of the bankrupt Hanjin Shipping Company in 2016 to liquidate their positions by selling tokenized rights to those immobilized goods.
It’s a demonstration of how finance can be unfrozen at intermediate stages along the chain, breaking them up, and facilitating more flexible and efficient means of aggregating the kinds of suppliers that operate in the ‘pull-based’ Demand Chains used in e-commerce.
Demand chains optimize “made-to-order” manufacturing, and customer fulfillment, to maximize product “variety not volume.” To get an idea of how this alters the current logic of trade rules, imagine we are fully immersed in the era of 3D-printing and IoT-driven manufacturing and a footwear maker gets a Request for Quotation (RFQ) for a batch of customized cleats for Brazil’s national soccer team that must be rushed in time for next month’s World Cup. The cleats might be “Designed In China” – the home of the intellectual property – but “Made in Brazil” by a trustworthy 3D printer somewhere in Rio to produce the product and fulfill this order.
Demand chains are particularly useful when accurate sales forecasts are unavailable and demand is variable. Unfortunately, they are fragile; any unexpected supply disruption risks stopping the whole manufacturing process, leading to dreaded “stock-outs.”
By packetizing risk and increasing a pool of potential KYM-ed suppliers, blockchain may finally enable demand chains to scale beyond their traditional trust limits and challenge traditional long-standing trust relationships.
Demand chains exploit that fact that digital trade dramatically changes cost equations and economics. A key reason why e-commerce thrives is because it is relatively inexpensive to stock digital bits on computers compared with stocking analog atoms in warehouses.
As such, it makes sense to offer an overwhelming variety of products. The assumption is that any logistic complexity can be managed through computerized automation, throwing in more computers and software as needed to scale. More importantly, products offered can be “pulled” into production only after they have been sold.
There are several commercial benefits to this approach. For suppliers, there’s an immediate gain in that they get the money up front. Secondly, because they now know real-time sales demand, they avoid the common “bullwhip effect” problem encountered in traditional “made-to-stock” supply chains. This occurs when errors in forecasting demand are amplified up the supply chain, leading to increased waste the higher upstream you go. With demand chains, suppliers see “effective demand,” not forecasted demand.
One can view demand chains with packetized risk as an evolution of “just-in-time” manufacturing, as they add in the important element of automated “just-in-time” financing. This wouldn’t be possible without a blockchain, since it can automatically reward participants without the risk of funds being stolen or unduly withheld.
Another potential benefit: saving the environment. This stems from a rather non-obvious feature of “pull” demand chains and the exchange markets that power them: the concept of “reverse logistics,” which covers all operations involved in the return or reuse of products and materials.
One might create an exchange for a product’s reuse, recycling or upcycling. Doing so might incentivize the creation of the “circular economy,” greatly improving the resource usage with potentially huge environmental benefits. In this model, products are not optimally priced for the point of sale, but for one step beyond the sale — the point of reuse.
Taking this idea further, manufacturers might be encouraged to make a market in their own products where it is cheaper to design a product for durability, and buy it back, rather than design for planned obsolescence that externalize the environmental costs.
Since 2017, the Europeans have had a bold plan to kill “planned obsolescence” and encourage products that are end-user serviceable. A blockchain-based model of demand chains, with the added kicker of tokenized incentives, could help them get there.
Trade = IP exchange
Cryptocurrency exchanges, which now cover more than 10,000 unique digital assets, can be thought of as providing a market mechanism for pricing intangible property (IP). (Note: I am deliberately applying the acronym “IP” to a wider definition of assets beyond “intellectual property” since most cryptocurrency technology is based on open-source software).
We now have an opportunity to extend this approach to on-demand Industry 4.0 manufacturing technologies such as 3D-printing. Here, the only element that is “shipped” is a digital design, whose provenance can be tracked to the original author of the work using a blockchain (e.g. ascribe.io).
A blockchain might also act as a market, one that functions like an efficient collecting society since the monetization event occurs long after the original creation was made. With a blockchain, we can now trace and cascade back any royalties to the appropriate beneficiaries, forging a powerful new way to reward the creative process. MIT researcher Prema Shrikrishna calls this “IP over IP” (Intellectual Property over the Internet Protocol), where manufacturing “supply” moves adjacent to market “demand.”
Thus the very nature of trade changes from shipping tangible property in containers (atoms) to intangible property in packets (bits). This has huge ramifications for the international trade policy regime.
It’s unclear how the existing trade rules under the World Trade Organisation’s Rules of Origin will apply in such cases or whether countries will strategically hoard raw materials such as rare earth elements.
Given the glacial rate of WTO negotiation rounds, measured in multiple years, it is hard to see how the existing regulatory regime will adapt to a world where manufacturing, trade and retail are “all digital,” even less so to a world where smart containers and packages automatically route themselves to their most profitable market.
This emerging paradigm suggests that divergences in manufacturing processes and costs – and the nation-state-led trade wars they trigger – will have decreasing economic relevance, relative to the impact of digital innovation. Already the root cause of labor disruption worldwide, digital automation will have an accelerating impact on people’s lives and livelihoods.
The real danger for policymakers lies in not recognizing when a technical innovation is fundamentally changing the underlying architectural assumptions, and brings with it changes in market structure and competitive landscape. Rarely does a bell ring to tell you it’s underway. That’s what the onset of blockchain technology portends. Governments must have their eyes and ears open.
As for the immediate future, there is certainly a risk of a US-China trade war, with Hong Kong possibly caught in any crossfire. Yet there is also an opportunity for leadership and for a grand bargain between the world’s two great trading powers to identify a common interest in establishing new rules for trading in Intangible Property using a global blockchain-based trade architecture.
Of the two outcomes, it’s clear to me that a trade war is not only powerless in the face of a dramatically changing economic architecture but even more dangerous than ever to common wellbeing.
So to all you trade warriors … “Ding Dong!”
Trade war concept image via Shutterstock
Written by CoinDesk.com
Japan’s Biggest Bank to Carry Large-Scale Trial of Cryptocurrency ‘MUFG Coin’
The banking arm of the Mitsubishi UFJ Financial Group’s (MUFG), the Bank of Tokyo-Mitsubishi UFJ, is reportedly planning to trial its in-house cryptocurrency in 2019 following years of development.
As Japan’s largest bank, MUFG could become the world’s first major financial institution to deploy its own cryptocurrency after a local report by Japanese publication NHK confirmed plans toward a sweeping trial involving as many as 100,000 MUFG retail bank customers.
Account holders will have to apply to take part in the trial which will enable participants to install a smartphone app which converts their fiat yen deposits in their bank accounts to units of ‘MUFG Coin’. The conversation rate of one unit MUFG coin will be equivalent to one yen.
‘They will be able to use the currency to make payments at places like restaurants, convenience stores and other shops,’ an excerpt from the report read. ‘They can also transfer the currency to the accounts of other participants.’
Bank officials will assess whether settlements and peer-to-peer transfers through the app are secure and efficient at a scale of 100,000 users after conducting successful in-house trials among employees for over a year.
As reported previously, MUFG coins will also look to bring in users of existing prepaid electronic money platforms with low commission fees levied for any payments, including international remittances. Users will also be encouraged to exchange MUFG coins with foreign currencies at airports at markedly lower commission rates.
‘If MUFG coin is used for overseas remittances, it is estimated that the commission will be cut to less than one-tenth of that of the current cost of several thousand yen per (international) transaction,” read an excerpt from a local report after the bank began issuing MUFG coins to employees on an experimental basis last year.
The bank is reportedly developing a two-way ATM machine to allow users to ‘withdraw’ MUFG coins onto their smartphone or exchange the cryptocurrency into yen.
One of the biggest banks in the world with over $ 2.6 trillion in assets, MUFG first announced plans to develop a cryptocurrency as early as 2015 before publicly confirming the blockchain-powered coin in early 2016.
At this stage, the launch and issuance of MUFG coins is an inevitability, with MUFG president Nobuyuki Hirano previously stressing the in-house cryptocurrency would “overcome issues of [existing] virtual currencies” like volatility “[to] create a highly useful currency”.
Indeed, MUFG Coin could be sold and exchanged at MUFG’s own rumored cryptocurrency exchangesometime in the near future.
Written by CCN.com
Difficult to Charge Cryptocurrency Exchange UPBit Since No Investors Affected: Expert
Experts in the cryptocurrency sector of South Korea have stated that it will be difficult for the government and local financial authorities to file charges against UPbit, South Korea’s biggest cryptocurrency exchange, given that no investors were affected.
Funds Real, No Investors Affected
Last week, CCN reported that UPbit was raided and investigated by local police, Korea Financial Intelligence Unit (KIU) and Financial Services Commission (FSC) due to suspicions of fraud. Local financial authorities accused UPbit of inflating its balance sheet and claiming to have more funds in various cryptocurrencies than their actual amount.
On May 15, various sources confirmed that an audit done by a major accounting firm in South Korea known as Yoojin found that the funds recorded on the balance sheet of UPbit exactly matched the actual holdings of the company and proved that the company is solvent.
“Since early 2018, UPbit created snapshots of its multi-signature wallets and funds stored within them for auditing purposes. Yoojin accounting firm, a major accounting firm based in Seoul, confirmed that all of the funds on the UPbit platform match the cryptocurrency holdings of UPbit stored in its multi-signature wallets,” MoneyToday reported.
The issue is said to have been caused by the lack of wallets for dozens of cryptocurrencies. UPbit has more than 130 cryptocurrencies listed on its platform but only 90 cryptocurrencies have native wallets that allow users to withdraw and deposit directly from and to UPbit. In order to withdraw the other 40 cryptocurrencies, users are required to convert to major cryptocurrencies like bitcoin and Ethereum.
Insiders have claimed that the police investigation has found no irregularities and due to the official audit report released by Yoojin, the cryptocurrency market of South Korea has already started to recover.
Earlier this week, on May 20, in an interview with Korea Herald, an insider stated that the authorities will not be able to bring any charges against UPbit because no investors were affected in any way.
“As no investors seem to have been affected by Upbit’s alleged business practices, it would not be easy for the authorities to bring any charges to bear,” said the source, who asked to remain anonymous due to the sensitivity of the issue.
The expert added that although the investigation has ultimately found no irregularities, it has significantly impacted the local cryptocurrency market in a negative way, leading investors to lost trust in the market.
“But a series of prosecution probes into the exchanges did effectively hurt the overall credibility of the industry,” the insider added.
Difficult to Regain Investor Trust
Oh Jeong-geun, a professor at Konkuk University, one of the most prestigious colleges in South Korea, stated that the investigation would cause investors to leave the cryptocurrency market permanently and to recover from it, both the exchanges and authorities will have to lead an initiative to convince investors that it is safe to invest in the market. Professor Oh said:
“Along with diversification efforts, priority should be put on ensuring the smooth operation of their trading systems in order to guarantee their growth potential. Lack of reliability would cause investors to leave the market forever.”
Wrritten by CCN.com
US, Canadian Regulators Launch Dozens of Crypto Scam Probes
An “international crackdown” on cryptocurrency scams was launched Monday by a group of securities regulators in Canada and the United States.
Dubbed “Operation Cryptosweep,” the effort was unveiled during a Monday event hosted by the North American Securities Administrators Association (NASAA). Its existence was first reported by the Washington Post and later detailed in releases from the Tennessee Department of Commerce and Insurance (TDCI) as well as the Texas State Securities Board (TSSB).
Cryptosweep, according to statements, constitutes “nearly 70 inquiries and investigations and 35 pending or completed enforcement actions since the beginning of the month.” More investigations are said to be underway, though it’s unclear when any related enforcement actions will be unveiled.
The effort gathered steam in April when a task force comprised of NASAA members was convened “to begin a coordinated series of investigations into ICOs and cryptocurrency-related investment products,” the TDCI said. Initial coin offerings (ICOs) or token sales were a major focus and officials reportedly identified hundreds for further inquiry.
A representative for the NASAA did not immediately respond to a request for comment, but others involved in the operation painted a picture of a wide-ranging effort to stamp out fraud. Recent examples of state-based regulatory actions include one that touted false endorsements from celebrities like actress Jennifer Aniston.
“The actions announced today are just the tip of the iceberg,” TDCI Assistant Commissioner Frank Borger-Gilligan said in a statement.
Joseph Rotunda, the TSSB’s Enforcement Division director, echoed that sentiment, stating:
“The market for cryptocurrency investments is saturated with widespread fraud, and our work is only revealing the tip of the iceberg.”
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