Archive for September 2017

Homeland Security is getting on the blockchain

The Department of Homeland Security (DHS) Science and Technology Directorate (S&T) has awarded a $749,241 Small Business Innovation Program (SBIR) contract to Digital Bazaar, Inc. to develop fit-for-purpose blockchains for identity and access management.

Under the SBIR Phase II contract, the Blacksburg, Virginia-based technology company will develop a flexible software ecosystem that combines fit-for-purpose distributed ledger technology, digital credentials and digital wallets to address a wide variety of identity management and online access use cases for the Homeland Security Enterprise (HSE). This research and development (R&D) project is being managed by the Cyber Security Division’s (CSD) Identity Management project. CSD is part of the Homeland Security Advanced Research Projects Agency.

 

IMF Analysis of Virtual Currencies

I am in the process of fact-checking the ‘IMF Staff Discussion Note on Virtual Currencies‘. Only 14 pages into it there are already strange and pretty obvious factual shortcomings. So far, the most blatant one is that the Internation Monetary Fund characterizes the ‘Cost of Production’ for Bitcoin as high while assigning the value ‘low’ to the US Dollar’s production cost. Needless to say, this is an oversimplification but also hints at the fact that the researchers did not actually get into the math of the matter which would seem like an important fact when dealing with “money”.

Current Bitcoin production cost can be calculated here. As everybody familiar with the matter knows: Bitcoins are being ‘mined’ by individuals for a profit – so there’s an actual market place for it. And, these miners also mine transactions – actually mostly, by now.

Below are the production costs for US Dollar bills and coins as provided by the “Federal Reserve Bank” (of course these number do not account for driving these things around town in armored cars). It should be easy to see that not a single miner would ever consider turning on his rig for such a poultry outcome.

 

US falls further behind in emerging cryptocurrency market

While US regulators keep making anouncements with little content in reference to the treatment of cryptocurrencies, countries like Switzerland are moving fast to embrace these new financial tools

The national railway company of Switzerland, Swiss Federal Railways (SBB), recently announced a new service. Starting on November 11, Swiss customers will be able to buy bitcoins from over 1,000 SBB ticket machines.

And, Swiss private bank Falcon is now offering their clients to store and trade bitcoins direclty via their cash holdings. A clear move that signals the traction the virtual currency is gaining even in slow-changing asset management.

The group’s new blockchain asset management service is being offered in partnership with cryptocurrency broker Bitcoin Suisse.

China ICO Turnaround

Hu Bing, a researcher at the Institute of Finance and Banking, a Chinese government-supported academic research organization, claimed that the government’s ban on initial coin offerings (ICOs) is only temporary

Bing emphasized that the Chinese cryptocurrency community must understand that the government has not “forbidden” ICOs but instead “paused” them, demonstrating the government’s intention to resume ICOs in the near future.

Bing further said that the Chinese government and its financial regulators are currently considering the potential of allowing ICOs to raise money in a controlled environment, through a licensing program.

BTCChina Response to News Article On “Banning Bitcoin Exchanges”

We have received a large number of questions from customers following the publication of a news article by Caixin alleging that Chinese regulators would stop bitcoin trading.

Our response is as follows:

  • BTCChina operates in strict accordance with Chinese regulations. If the Caixin report is accurate, we will continue acting in strict accordance with regulators, and continue protecting the safety of customers’ funds.
  • The Caixin report says that regulators have not said bitcoin itself is illegal, and have not decided to prohibit private, one-on-one bitcoin transactions. If the report is accurate, BTCChina will stop all BTC/CNY trading, and change its business model to become an information service provider for private, one-on-one digital asset trading.

Many people regard digital assets, of which bitcoin is the embodiment, as the necessary result of recent advances in internet technology and the largest scale practical application of blockchain technology. In additional, bitcoin’s blockchain may have a far-reaching positive impact on the economy, becoming a foundational layer upon which other revolutionary software projects are based. We believe digital assets will have a far-reaching impact on the global economy.

BTCChina thanks you for your support, and will continue working to provide the best service for all customers.

BTCChina, Saturday, September 9th, 2017

New ICO High

Filecoin – a data storage network intending to use blockchain technology (!) – today officially completed its initial coin offering (ICO), raising more than $257 million over a month of activity with $205MM coming from the ICO. $52MM had been sold ahead of the ICO to VCs – likely at a discount.

Filecoin clients can tune their storage strategy to suit their needs, creating a custom balance between redundancy, speed of retrieval, and cost. The worldwide Filecoin storage and retrieval markets make vendors compete to give you flexible options at the best prices.

What is an initial coin offering?