Metropolitan Bank Is Handling Millions for Crypto Clients (And It Wants More)

Metropolitan Bank Is Handling Millions for Crypto Clients (And It Wants More)

To most banks in the U.S., cryptocurrency businesses are pariahs. To Metropolitan Commercial Bank, they’re “pioneers.”

At least, that’s how the New York financial institution’s chief technology officer, Nick Rosenberg, describes them.

“We’re certainly very interested in growing this vertical,” Rosenberg told CoinDesk of the bank’s crypto clientele. “We’ve learned that it’s a serious industry. There are some very smart people involved. There are some very interesting ideas coming out that could really change the way people do business.”

While most banks cling to the adage “blockchain not bitcoin,” Metropolitan stands out simply by being one of the very few to enthusiastically court deposit business from crypto firms.

These clients include a few exchanges, as well as hedge funds and other crypto investors that bank at Metropolitan because it’s easier to quickly move their money to those exchanges. (To be clear: the bank only handles fiat for customers and does not touch crypto itself.)

So far, it’s proven a lucrative niche for Metropolitan. In the first quarter, cash management and foreign exchange conversion fees from cryptocurrency clients totaled $3.4 million, the bank disclosed in an investor presentation. This helped drive a more than 300 percent increase from a year earlier in Metropolitan’s total non-interest income, to $5.4 million, according to a Securities and Exchange Commission filing.

If that doesn’t sound like a lot of money, keep in mind that Metropolitan is a community bank. With just $1.9 billion in total assets, it’s less than one-1,000th the size of JPMorgan.

What’s more, that triple-digit rate of growth is astronomical for the U.S. banking industry, where non-interest income for all institutions climbed a measly 7.9 percent during the same period, according to data from the Federal Deposit Insurance Corp.

Yet despite the lucrative demand from crypto companies for banks to provide fiat liquidity and other traditional services, bitcoin-friendly banks like Metropolitan are still as rare as they were three years ago.

“It’s extremely challenging,” said Joe Ciccolo, president of the compliance service provider BitAML Inc. Referring to another sector that banks have famously shunned, he added:

“The legalized cannabis industry are having a much easier time than our cryptocurrency clients.”

‘High-touch relationship’

One reason Metropolitan Bank is an outlier in embracing the crypto industry is that most banks can’t stomach the risks. Chief among them is the regulatory risk.

Anti-money-laundering regulations require banks to identify their customers and even their customers’ customers, plus track the flow of funds. While public blockchains can help banks and law enforcement trace the movement of money, the pseudonymous nature of crypto addresses makes it hard to determine who is ultimately sending and receiving funds.

Bitcoin’s historical association with underground drug markets certainly doesn’t help.

“It’s very difficult for a bank to maintain a pro-bitcoin stance,” said Ciccolo, citing the high turnover among compliance officers. “If you have a new officer come into a financial institution, they may take the opportunity to put a different stance on high-risk customers such as crypto companies.”

As bullish as they may be, Metropolitan’s bankers still recognize the risks of working with crypto clients. “It’s a high-touch relationship,” Rosenberg said, meaning one requiring extra diligence.

With regard to risk management, Rosenberg said there are two crucial keys to serving crypto clients.

The first is being extremely selective about client acquisition, only working with companies that take compliance as seriously as the bank does. The second is maintaining an open dialogue with regulators.

“Law enforcement departments, in general, are understanding that cryptocurrency is not all about illicit payments, it has a value and it has a legitimate purpose,” Rosenberg said. “It’s just a matter of spending time explaining it, understanding what their concerns are, making them feel comfortable that we are mitigating those concerns, and that we have the right controls in place.”

Other risks

Compliance aside, Metropolitan also has to insulate itself from the volatility its cryptocurrency customers live with every day. As noted above, the bank only works with fiat currency like dollars, never touching cryptocurrency directly.

But more subtly, it’s minimized the risk to its own balance sheet in the event crypto depositors’ balances suddenly shrink. To illustrate why this would be a concern, the settlement accounts it maintains for exchanges totaled $281.2 million on March 31, representing 17.4 percent of the bank’s total deposits, according to the SEC filing.

Such a high concentration might normally be worrisome.

However, Metropolitan isn’t using these accounts to fund long-term assets like mortgages, just cash and equivalents. So, even if they were drained at once, it’s far from a run on the bank.

“They do not utilize a lot of these deposits in their everyday operations, just because they do know there is significant volatility there,” said Collyn Gilbert, an analyst and managing director at the investment banking firm Keefe, Bruyette & Woods.

To be sure, Metropolitan held another $100.8 million in corporate accounts for cryptocurrency firms, making up 6.2 percent of total deposits as of March 31. And these accounts do fund assets on the balance sheet.

But corporate accounts, which clients use for normal business activities like payroll, are less volatile than settlement accounts, which hold money only temporarily until a transaction is completed, Gilbert said.

Yet there’s one more risk Metropolitan has encountered in the crypto space: what finance types call “headline risk.”

In January, the bank sent its customers a reminder of what it said was a longstanding policy of not accepting crypto-related wire transfers from entities outside the U.S. Word leaked out to the press, which reported this was a new policy prompted by fraud. Metropolitan had to issue a public denial of that claim to quell backlash.

Reaping rewards

Setting aside the fee income and interest-free funding on deposits, there’s a more intangible benefit Metropolitan gains from banking cryptocurrency firms, one that arguably compensates for all the risks.

Namely, it gets a front-row seat to the revolution and is learning about how cryptocurrencies perform in the wild.

“I think Metropolitan was intrigued by the structure, more than just bitcoin, but the structure of that currency market in general,” Gilbert said. “The technology behind it is what has really been intriguing to this management team.”

Ciccolo agreed that serving this sector has given Metropolitan a competitive advantage.

“There’s a dual benefit for those banks that are willing to step out there,” he said. “Not only does it present a new book of business their competitors don’t have, so they can grow their customer base and reach, at the same time, it also gives them a sneak peek at some of the technology that might be impacting their world in traditional finance.”

Indeed, the bank’s director of new products, Kyle Hingher, said Metropolitan hopes to someday be one of the leading banks serving the emerging token economy, once the opaque regulatory landscape clears up.

“We’re looking at this market as a new asset class,” Hingher said. “We’d like to do more for the new asset class.”

For now, of course, even companies with cypherpunk ideals benefit from working with traditional banks to tap into audiences and services that utilize fiat currencies. Liquidity lends any crypto startup greater usability.

“If something is really going to succeed, it’s going to require a banking partnership,” Hingher said.

Looking ahead, the Metropolitan banker is keeping close tabs on the emergence of security tokens and blockchain-based settlement systems.

“The opportunity is to merge technologies and that potential for something brand new that could be earth-shattering and change everything. The potential for that, I think, outweighs all the crash-and-burn scenarios,” Hingher told CoinDesk, concluding:

“We call ourselves the entrepreneurial bank. We want to work with this new space rather than butting heads.”

Image via Metropolitan Commercial Bank

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Article Source

Chip Maker Nvidia Adds Blockchain-AI Startup to Incubator

Chip Maker Nvidia Adds Blockchain-AI Startup to Incubator

Nvidia appears to be expanding its interest in blockchain.

CoinDesk has learned the graphics card producer, which saw a headlines-grabbing business boost from crypto mining demand last year, is now working with a startup called Ubex to develop a smart online marketing platform that uses blockchain and artificial intelligence.

Abhinav Agrawal, a spokesperson for the startup, told CoinDesk that Nvidia accepted Ubex into its Inception Program earlier this month. Ubex wants to use the technology to help a neural network – a type of computer program designed to think like a person – more efficiently present advertisements on websites.

Essentially, the startup is seeking to use blockchain to underpin its service, with data stored in a distributed ledger system helping the network target ads at consumers.

Ubex co-founder and chief executive Artem Chestnov told CoinDesk that the startup uses a blockchain in particular because its “key goal is transparency and speed of transactions.”

He continued:

“Any AI needs datasets to work more effectively and to learn. Training an AI requires a lot of effort. The blockchain base will allow us to attract thousands of sources of information that will be used to enrich our AI’s database and make it faster, smarter, stronger and more efficient.”

At present, the startup has released a prototype of its platform for testing.

The Nvidia Inception Program seeks to provide data science and artificial intelligence startups with resources to finish developing and market their products, according to its website. Agrawal told CoinDesk that these resources include educational and marketing tools, as well as datasets for training the startup’s neural network.

Nvidia Inception Program head Arjun Dutt confirmed that Ubex is part of the incubation program, but said its use of blockchain “was not a significant factor in our consideration.” Rather, it’s Ubex’s planned application that caught the company’s eye.

“The main area of interest is their use of deep learning [and] neural networks for better online advertising algorithms,” he said.

Nvidia CEO via Flickr

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Article Source

Etoro Is Launching an OTC Crypto Trading Desk for Institutions

Etoro Is Launching an OTC Crypto Trading Desk for Institutions

Etoro Is Launching an OTC Crypto Trading Desk for Institutions

Finance

While the major banks are taking their time with offering OTC crypto trading, new entrants to the space are stepping up to fill the void. Social investing platform Etoro, which focuses mainly on retail traders, is now expanding into the institutional segment with a new cryptocurrency offering.

Also Read: This Week in Bitcoin: An End to 51% Attacks and Who Controls Bitcoin?

New Crypto Trading Desk for Hedge Funds

Etoro Is Launching an OTC Crypto Trading Desk for InstitutionsEtoro, which recently announced that it is expanding into the US with ten cryptocurrencies, is reportedly setting up an over-the-counter (OTC) trading desk in London for institutions wishing to trade on cryptocurrencies. The platform is connected to fifteen cryptocurrency exchanges from which to pool liquidity and is also said to be planning to launch one by itself. The move is explained as answering demands from hedge fund owners who expressed interest in experimenting with crypto trading.

“We are launching an OTC desk for institutions. We’ve seen more and more interest from corporates and institutions,” CEO Yoni Assia told Business Insider. “We’ve actually set up our corporate team here in the UK to start setting up accounts to trade on eToro. We’ve announced that we’re launching the exchange as well so, between the exchange and the OTC desk, we’re also starting to serve more potential institutions and financial institutions.”

The Growing Institutional OTC Crypto Market

Etoro Is Launching an OTC Crypto Trading Desk for InstitutionsInstitutional OTC desks help big players whose massive transactions might move the markets if they were done in the open. And trading outside popular exchanges can also be seen as risk management, for trying to avoid losing funds in the case of another exchange hacking incident.

In the US, Circle Financial and Cumberland Mining operate OTC crypto services and Goldman Sachs was reported to be in the process of entering the field, although its CEO has denied the rumors. Additionally, JP Morgan and Fidelity are said to be assessing a move into the space. In the UK, Barclays was reported as supposedly considering launching a crypto trading desk back in April. And financial industry insiders, like David Mercer the CEO of LMAX, which recently launched a physical crypto exchange dedicated to institutional clients, expect UK banks would eventually join the market next year. In the meanwhile, big players have also set up their own private network for OTC trading, buying and selling billions every month among themselves via Skype.

“I think there is growing institutional demand and interest of public investors to understand whether they can join the party,” Etoro CEO Assia said. “That is something we definitely see out there. We see more and more public market players and big banks who are interested in this space and feel left out because they’re not allowed to invest in crypto or ICOs.”

Are London banks in risk of losing hedge fund to new trading desks if they won’t support cryptocurrency? Share your thoughts in the comments section below.


Images courtesy of Shutterstock.


Verify and track bitcoin cash transactions on our BCH Block Explorer, the best of its kind anywhere in the world. Also, keep up with your holdings, BCH and other coins, on our market charts at Satoshi Pulse, another original and free service from Bitcoin.com.

Article Source

This Village Decided to Launch Japan’s First Municipal ICO

This Village Decided to Launch Japan’s First Municipal ICO

This Village Decided to Launch Japan's First Municipal ICO

Crowdfunding

A village in Japan has announced its decision to launch an initial coin offering in order to secure funds for creating a sustainable region. This will be the first time in Japan for a municipality to use a token sale to raise funds.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Local Government Launching ICO

This Village Decided to Launch Japan's First Municipal ICOA village in Japan has decided to issue an initial coin offering (ICO) which it describes as “Japan’s first decision to issue a regional ICO by a local government.”

Nishiawakura Village is in Okayama Prefecture, which is located in the southern part of Japan’s Honshu island. The prefecture is largely known for its rural landscapes, feudal castles and art museums. With 95% of the area covered in forest, the village has a population of approximately 1,500. In the early 2000s, the village refused to merge with Mimasaka City when municipalities nationwide consolidated, wanting to remain economically independent.

According to the village’s announcement:

In order to promote the creation of a sustainable region in the future, as a means for small local governments to secure new financing resources and to build up regions through upfront investment, tokens issuance, and the creation of virtual currencies, we will introduce fundraising through an ICO for the first time as a municipality in Japan.

Village’s Coins

This Village Decided to Launch Japan's First Municipal ICOThe village’s tokens will be called Nishiawakura Coin (NAC) and will be issued by the Nishiawakura Village Token Economy Association. The NAC coins will carry voting rights which allow their holders to participate in decision making relating to local ventures, the village explained.

“We plan to advance according to the revised fund settlement law…in line with the self-regulation rules on the management and finance by the Japan Virtual Currency Exchange Industry Association,” according to the announcement. This industry association was established in April and consists of 16 government-approved crypto exchanges. The revised fund settlement law went into effect in Japan last year, legalizing crypto as a means of payment. The village added:

The funds procured will carry out business development, etc. in collaboration with Nishiawakura Village, and will develop a sustainable community.

Currently, Japan has no specific law for ICOs, but the regulators have recently been discussing a specific regulatory framework for them. In February, the country’s top financial regulator, the Financial Services Agency (FSA), issued a warning to an unregistered ICO for allegedly conducting business without a license.

What do you think of this Village in Japan launching an ICO? Let us know in the comments section below.


Images courtesy of Shutterstock, Okayama-iju, Turns, and Nishiawakura Village.


Need to calculate your bitcoin holdings? Check our tools section.

Article Source

EOS Has Issues

EOS Has Issues

EOS Has Issues

Blockchain

The EOS mainnet is less than a week old but already the much-vaunted blockchain has ran into a spate of issues ranging from the minor to the critical. Teething problems with new blockchains are to be expected, but the numeracy of these, coupled with a series of other anomalies, have had EOS critics scratching their heads and developers on the defensive.

Also read: Satoshi Nakamoto Known to CIA? FBI? Created by NSA? Search Intensifies

There’s Never a Dull Day in EOS Land

The EOS soap opera has made for compelling viewing in recent weeks. The level of hype and funds invested in the project meant a soft launch was never going to be possible. Satoshi appears to have launched bitcoin alone, with zero fanfare and the world oblivious. EOS, on the other hand, has launched following a year-long $4 billion raise, having excited half of the crypto community and the alarmed the other half.

The most recent issue was a bug which caused block production to stop over the weekend, forcing a conference call between Block.one, EOS’ developers, and the 21 block producers tasked with running the network. The cause of the problem appears to have been an error in the latest build, obliging EOS to resort to an earlier version of the code. This raises the question of how much testing is being performed on new code; it looks like Block.one is issuing updates that have not been thoroughly tested, forcing them to fix problems as they occur on the mainnet.

EOS Has Issues

Features, Bugs, and Anomalies

While unfortunate, bugs are to be expected when an entirely new blockchain launches, and bitcoin and ethereum weren’t without their issues in the early days either. But there are troublesome aspects of EOS that are there by design, and whose presence is harder to explain. There’s the high amount of tokens that must be staked by developers, for instance, in order to run EOS dapps. The amount payable ranges according to the amount of network resources the dapp requires. Had Crypto Kitties been running on EOS at the height of the dapp’s popularity, it’s been suggested that the amount of tokens required to operate it would have ran into the millions of dollars.

And then there’s the complexity of creating an EOS wallet. Creating an account calls for obtaining the assistance of an existing account-holder. Without their input, it’s impossible for any newcomer to join the EOS ecosystem. In time, EOS dapps should make account creation easier, but until then, the public blockchain operates more like a closed system, with participants reliant on the support of other EOS holders to get the ball rolling.

EOS Has Issues

Attaining the 15% quorum of votes to launch the network also proved to be a sticking point. Token holders were required to vote via a process that included entering their private keys. Due to the risk of being tricked by fake EOS dapps, most token holders chose not to vote, leaving the voting process stuck for days at below the 15% threshold.

EOS Oddities Have Failed to Dampen Market Enthusiasm

Despite all the drama, glitches, and oddities of EOS, the market has remained bullish on Dan Larimer’s blockchain. With so many token holders invested in the project, the community is willing EOS to succeed no matter what, and no amount of negativity – or FUD as the acronym goes – will be allowed to prevail. Even when a major bug was discovered in EOS prior to launch, followed by the hasty creation of a bounty program and the discovery of several more bugs, the market shrugged the problems off.

EOS Has Issues

The enthusiasm for all things EOS can partially be attributed to the need for a fast and scalable blockchain. Even the network’s most ardent supporters will concede that EOS isn’t perfect, but given the alternatives – a sluggish ethereum and a handful of untested and unused blockchains – there seems little choice but to pray Block.one can prevail. With each passing drama, the pro and anti EOS brigades become more firmly entrenched in their positions. No other blockchain in the history of cryptocurrency has proven to be so polarizing. Whatever the future holds for EOS, it certainly won’t be dull.

Do you think EOS can shrug off these early setbacks and overtake ethereum as the number one blockchain for dapps? Let us know in the comments section below.


Images courtesy of Shutterstock, and Twitter.


Need to calculate your bitcoin holdings? Check our tools section.

Article Source

The Reasonable Network

The Reasonable Network

The Reasonable Network

Op-Ed

This article is my advice on how reasonable people can have a public discussion that is strong enough to avoid being derailed by trolls, no matter who they are. I believe the key is the conviction that if there were such a thing as a reasonable public discussion, everyone else would depend on the conclusions that it arrived at. Thus, everyone taking part in the discussion will tend to prefer to follow the rules over anything that might serve a conflicting interest.

Also read: Markets Update: SEC Adds a Brief Market Spike — But Will It Last?

If you are someone who prefers the Reasonable Network, then you are looking for people who also prefer the Reasonable Network. You must look at what they prefer and see that they prefer to be reasonable. You don’t need to bug him or manipulate him. You just have to let him show you that he prefers reason.

I am not going to define precisely what I think reasonableness is because I would want people to develop their reasonableness test based on everything they know rather than just what is in this article. However, I will say that I think that a person’s ability to repeat an intellectual position to his discussion partner is a test that is so easy to administer and evaluate, and simultaneously such a good indicator that I recommend it as the first step in any evaluation of another person’s reasonableness.

You, of course, don’t want to waste people’s time, especially your own, so I think you should be able to find the best one-sentence version of your position and look for people who appear to be capable of reporting your position back to you. He does not have to get everything right, but you should believe that he is interested in getting it right. I think it is good to let a person talk for a bit after you give them your test and see if they say anything on their own that shows that they have understood basic things about it. If they do not do this, I think that there is nothing wrong with asking them to repeat your position back to you, just to make sure they got it. Someone who is good at discussions may do this without being prompted because he knows he can’t possibly have a reasonable discussion without understanding the basics of the other person’s position.

The Reasonable Network
“He does not have to get everything right, but you should believe that he is interested in getting it right.”

No matter who you are and what you think, it is relatively easy to see whether someone can correctly repeat back what someone else said, if such an event were recorded publically. Furthermore, I think it is hard to argue that there is anything unfair about my reasonableness test and it is easy for you to argue publicly that someone has passed it. Remember, we are talking about a public discussion, so everything that is said should be something that can potentially have a lot of attention drawn on it. You want to be able to behave according to rules that you can defend later, in case anything that you do attracts attention. I believe that my reasonableness test is something that people with many divergent viewpoints could agree on, if they all wanted to have a reasonable discussion.

It is easy to show that someone has passed the test, but there are many reasons that someone might fail it. I would say that it is hard to show that someone has genuinely failed the test, or in other words, shown that they are uninterested in a reasonable discussion or unable to have one. Someone who does not pass the test is not necessarily someone who does not want a reasonable discussion. I think it is important to differentiate between people who cannot pass the test and people who simply have not. People can have many reasons to choose not to pass your reasonableness test. You must pass their reasonableness test at the same time as they are passing yours, so if you won’t say anything that demonstrates a grasp of whatever they have said to you, they might not bother to say anything. I think the reasonableness test should be based on what people have actually said in the current conversation and they should not expect one another to be familiar with who they are or their prior work as part of the reasonableness test. This ensures that both people are engaging with one another regardless of who they are.

On the other hand, someone who makes the same mistake several times in a row and who does not correct his version of your position after you have given him feedback about his response is someone who doesn’t want a reasonable discussion. If he failed because he is stupid, then you don’t need to talk to him anymore. If he failed because he is a troll, then you might see some variety and inventiveness in his failures. In that case, he is testing you to see how easily you can tell that he is a troll. I think it is ok, if you feel like it, to engage with trolls who have a sense of humor, but they should be doing at least something that you find entertaining, and if not, you should not let yourself respond to any of their lures.

The Reasonable Network
“It may be necessary to prove that you are a troll before you can begin to assess another person’s reasonableness.”

A troll who is failing your test in a way that is a very obvious joke is telling you that there is something wrong with your reasonableness test. For example, let’s say that some ideology or religion has taken over your brain to the degree that you have forgotten how to evaluate other people for reasonableness, then a joke may be a way of drawing your attention to some way that you are excluding thinking people from your network. For example, perhaps your reasonableness test is too big. I think that you should not expect people to have to repeat more than a one-sentence version of your position, and if you are in an ideology or religion, it is often impossible to explain your position in one sentence.

On the other hand, in the event of an environment in which there is a lot of thought-control, in other words, there is social punishment for expressing certain ideas, then it may be necessary to prove that you are a troll before you can begin to assess another person’s reasonableness. You want to be talking to someone first who is able to play with social conventions and who is creative with the way that he expresses forbidden thoughts as jokes or in terms that are cryptic so that few will notice.

Someone who deliberately fails your test in a way that is not an obvious joke is a suspicious person.

There is a bootstrapping problem with the reasonableness network because you cannot reliably pick out reasonable people from a crowd. In a good network where people were genuinely reasonable, you would expect the most prominent people to be reasonable. Unfortunately, you cannot depend on this. I believe it is necessary to be able to pick out reasonable people from a crowd, independent of whether they are prominent.

In public, anyone can transmit anything and there can be very loud signals that do not contain a high originality. You must have something that filters people based on what you can see about them publicly, even if it is not a direct test of reasonableness. You, conversely, should want to be someone who is easily identified as someone who wants to have a reasonable discussion. So you need to transmit a signal that will attract reasonable people to you.

Since reasonable people cannot depend on having any shared ideas that will always stand out in a crowd, I think the best signal of reasonableness is the ability to stand out itself. You should be someone who can stand out in any crowd, not just the one you’re in. In other words, just be some kind of individual. In an environment in which there is a lot of ‘group-think’ and in which individuality is punished, it is easy to design a signal that goes against the crowd. You may have to endure some social punishment to transmit it, but you can try to come up with something that goes over most people’s heads. I think that you just need to believe that having a reasonable discussion is more important than the disapproval of people who don’t want one. I think it is ok if you just want to play some goofy character and you don’t show yourself directly. You just have to be an individual.

I would argue that the ability to go against the crowd is the purest signal of intelligence because it involves identifying a class of behaviors and abstracting something about it. If you are looking at a crowd that’s very unfamiliar to you, then someone who is going against the crowd is the signal that an intelligent person could make which would most easily stand out to you. If you are looking at a crowd and it appears that there are many individuals and you can’t tell who the best contrarian is, then that is a sign that you are looking at a crowd of intelligent people who are able to have a reasonable discussion. If a crowd appears to be many people moving together, then a contrarian among them should be easy to identify.

The Reasonable Network
“If you are looking at a crowd that’s very unfamiliar to you, then someone who is going against the crowd is the signal that an intelligent person could make which would most easily stand out to you.”

A connection in the reasonable network is valuable because once it exists, it is not easy to replace. Thus, you must be someone who can identify signals of reasonableness and maintain good relationships with such signals, no matter where you see them. The only thing that keeps you in the reasonable network is your ability to be reasonable. You have to learn to prefer rational discussions to feeling like you have won the argument or to feeling like you want to be a celebrity, or from whatever other motivation you might have for engaging in the discussion.

In the reasonable network, there is nothing wrong with the existence of celebrities or with wanting to be a celebrity or any kind of important person that you want. It is necessary to withhold judgment somewhat about celebrities whom you have not interacted with. If you do talk to any, you need to get your own sense of how reasonable they really are. The best way to become a celebrity in the reasonable network is to show people that you prefer reasonableness over being personally important.

I think that someone who were to think about the problem that I have attempted to solve here would come up with a roughly similar solution. Therefore, I think that the reasonable network exists already. In fact, it exists everywhere, throughout all ages in history. You just have to find it.

Steps for finding the reasonable network:

  • Express individuality (may require trolling)
  • Prefer other people who are expressing individuality when you open discussions.
  • Prefer what you learn from other people you know who have passed your reasonableness test to what you learn from anyone who transmits information without interacting with you.  
  • People you have not met but who appear to be able to pass the reasonableness test publicly should be preferred as sources of information over those who do not.

What do you think about having a public conversation strong enough to derail trolls? Let us know what you think about this subject in the comment section below.

This is an Op-ed article. The opinions expressed in this article are the author’s own. Bitcoin.com does not endorse nor support views, opinions or conclusions drawn in this post. Bitcoin.com is not responsible for or liable for any content, accuracy or quality within the Op-ed article. Readers should do their own due diligence before taking any actions related to the content. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any information in this Op-ed article.


Images via Shutterstock, and Pixabay.


Why not keep track of the price with one of Bitcoin.com’s widget services.

Article Source

Six Fake Crypto Exchange Sites Busted by Ukraine’s Cyberpolice

Six Fake Crypto Exchange Sites Busted by Ukraine’s Cyberpolice

Six Fake Crypto Exchange Sites Busted by Ukraine’s Cyberpolice

News

The cybercrime combating unit of the Ukrainian police has uncovered a network of fraudulent crypto trading websites. Four people are suspected of offering the fake online exchange services. They have maintained at least six platforms luring cryptocurrency traders with deceptive messages.

Also read: Survey: 13% of Net-Savvy Ukrainians Own Cryptocurrencies

Police on the Lookout for More Fake Exchangers

Officers from Ukraine’s Cyberpolice have exposed an organized group of scammers who created a network of fake online exchangers offering conversion of cryptocurrencies. According to a press release issued by the National Police, a number of sites have been used to deceive and defraud unsuspecting citizens who wanted to trade their cryptos.

“The criminal group consisted of four people […] possessing specialized knowledge and skills in programming,” the NPU’s press service said. They had set up their own CMS-system to manage the websites’ content. The platforms imitated the activities of legitimate online cryptocurrency exchangers, supporting multicurrency conversion, and even displayed fictitious positive ratings and reviews.

The victims were invited to transfer their money to digital wallets registered with forged identification documents under false names of foreign citizens. After receiving some funds through a particular platform, the scammers would close it and open a new one, law enforcement officials explained.

Six Fake Crypto Exchange Sites Busted by Ukraine’s Cyberpolice

So far, Ukrainian police have found at least six fake websites: moneycraft.info, swapex.net, myexchanger.lv, iconvex.net, likechange.biz, and wowex.online, Financial Club reports. Most have been taken down already, with one now redirecting to sites with pornographic content. Investigators believe there are more undiscovered websites and have asked the public to report suspicious platforms to [email protected]

Six Fake Crypto Exchange Sites Busted by Ukraine’s Cyberpolice

Three of the suspects, aged between 20 and 26 years, have been implicated directly in the six established fraud schemes. They are all residents of the city of Dnepropetrovsk. The police have opened criminal proceedings against them under Section 3 of Article 190 (Fraud) of Ukraine’s Criminal Code.

Officers have already conducted authorized searches at the addresses of the suspects. They have seized computer equipment, including flash drives, as well as bank cards and mobile phones that were used by the scammers. The Cyberpolice unit is currently studying the identified websites to determine the size of the fraud.

Six Fake Crypto Exchange Sites Busted by Ukraine’s Cyberpolice

Ukraine’s Booming Crypto Trade

In the last couple of years, Ukraine has been experiencing a growing interest in cryptocurrencies with a rising trend in crypto trading volume. According to the latest reports, the estimated daily crypto-hryvnia turnover on the three major Ukrainian exchanges, Exmo, Kuna and BTC Trade UA, reaches $1.9 – $2 million USD (~$700 million, yearly). The total is likely to be even higher, as at least eighteen other trading platforms and more than 4,000 individual traders are believed to provide exchange services, both online and offline.

A recently conducted survey found that 72 percent of Internet-savvy Ukrainians know what cryptocurrency is and another 23 percent have heard about it. At least 13 percent of those using the world wide web possess digital coins, the poll confirmed. A number of Ukrainian officials have declared owning digital assets on their tax returns.

According to a new report titled “Green Book: Cryptocurrency Market Regulation”, Ukraine is among the top 10 countries in the world in terms of number of cryptocurrency users, while local companies have created 25 new digital coins, raising $132 million in less than two years.

Six Fake Crypto Exchange Sites Busted by Ukraine’s Cyberpolice

Cryptocurrencies, however, and the fintech industry as a whole, remain largely unregulated. Three draft laws have been introduced in the Rada since October, with no real progress so far. These are the bill “On the Circulation of Cryptocurrency in Ukraine”, the law “On Stimulating the Market of Cryptocurrencies and Their Derivatives”, and a supplementary draft amending the tax code to cover crypto incomes and profits.

Multiple government officials and institutions have insisted on adopting proper crypto regulations, and Ukraine’s Cyberpolice is one of them. In January, the cybercrime combating department shared its concerns about cryptocurrencies and called on the government to either ban them or legalize them “as soon as possible.”

Do you think regulations can effectively ban fraudulent platforms and support legitimate exchanges? Share your thoughts on the subject in the comments section below.


Images courtesy of Shutterstock, Financial Club, National Police of Ukraine.


Verify and track bitcoin cash transactions on our BCH Block Explorer, the best of its kind anywhere in the world. Also, keep up with your holdings, BCH and other coins, on our market charts at Satoshi’s Pulse, another original and free service from Bitcoin.com

Article Source

This Week in Bitcoin: An End to 51% Attacks and Who Controls Bitcoin?

This Week in Bitcoin: An End to 51% Attacks and Who Controls Bitcoin?

This Week in Bitcoin: An End to 51% Attacks and Who Controls Bitcoin?

The Weekly

This week we reported about a suggested solution to 51% attacks, a hacked exchange that was blamed for tanking the market and a cannabis-themed cryptocurrency bringing peace to the world. We also learned, in this week’s most commented-on article, who really controls Bitcoin and why it won’t become a global currency, according to the CEO of Ripple.

Also Read: Get Them While You Can Gamers, Graphics Cards Prices Have Crashed

Hack Takes a Toll on Crypto Markets

The big news on Monday was another hacked South Korean crypto exchange. While the figures stolen were much smaller than past events and the trading venue involved much lesser known, the incident was widely blamed for the drops across the markets due to its timing. The alleged hacker stole $19.5 million in NPXS, $13.8 million of Aston X, $5.8 million in tokens of Dent, over $1.1 million of Tron, and at least five other tokens, all from Coinrail exchange users. Other subjects covered include a hospital where you can pay with tokens and a “blockchain” based cultural center established by a gangster.

POT Prevents Nuclear Armageddon

This Week in Bitcoin: An End to 51% Attacks and Who Controls Bitcoin?The main topic on Tuesday was Potcoin getting global exposure on the back of the nuclear summit in Singapore. The cryptocurrency has been sponsoring the trips of Dennis Rodman to North Korea for a while now and as two of the basketball star’s friends, Donald Trump and Kim Jong-un, met to discuss peace, POT was able to get into the limelight of this histrionic event. Additional stories covered in Tuesday’s edition of Bitcoin in Brief included Coinbase’s plans for adding support for Ethereum Classic (ETC) and the intentions of Binance to enable euro transactions later this year.

Explosive Vote in Crypto Valley

On Wednesday, we reported that authorities in the Swiss city of Zug will ask local residents to participate in a non-binding “blockchain-based” vote later this month. The experiment will be held between June 25 and July 1, when residents will be able to vote via their smartphones. They will be asked if they are in favor of fireworks during a festival, and whether they think digital IDs should be used to borrow books from the library, pay parking fees, and more. In other serious news from the country, representatives of Switzerland’s financial, technological, academic and legal sectors have formed the Capital Markets and Technology Association (CMTA) to facilitate the use of blockchain in financial markets.

Thomson Reuters Expands Crypto Tracking

This Week in Bitcoin: An End to 51% Attacks and Who Controls Bitcoin?On Thursday, it was reported that Thomson Reuters had expanded the market data for the top 100 cryptocurrencies in its sentiment data offerings. The service is provided in cooperation with Marketpsych Data LLC, a leader in quantitative behavioral science. The new Marketpsych Indices package uses machine learning and natural language processing to measure emotional and topical items across news and social media sites that may drive market participant behavior in cryptocurrency markets. It monitors more than 2,000 global news and 800 social media platforms in real-time.

An End to 51% Attacks?

An important story, which has implications for all Proof of Work coins, was covered on Friday. In a new whitepaper, the Zencash team proposes changing Satoshi Consensus, also known as the longest chain rule, to a method that makes it “both technically infeasible and economically disastrous to attempt double spending.” ZEN aims to achieve this by introducing a penalty “in the form of a block acceptance delay in the amount of time the block has been hidden from the public network.” The team now hopes that other PoW coins will adopt this proposal with a view to mitigating further 51% attacks.

Crypto Behind Bars

An interesting story published on Saturday talked about a new cryptocurrency designed to be used by prison inmates. Prisoners will be able to use the crypto through kiosks that will be installed in the prisons as part of the project. This will allow them to spend their coins in the prison commissary, cover court costs and fees, pay other inmates, and receive money from friends and family. Each user will have a digital wallet to store their funds. Transactions will be made in real time and at minimal fees, Cellblocks claimed.

Bitcoin Controlled by China?

This Week in Bitcoin: An End to 51% Attacks and Who Controls Bitcoin?The most commented-on article during the week covered the claims by Ripple CEO, Brad Garlinghouse, that BTC has no hope of being a world currency and is controlled by China. “A number of prominent people,” he said, “even Steve Wozniak, has said that he sees a world where Bitcoin is the primary currency. I think that’s absurd. I don’t think that any major economy will allow that to happen. By the way, it doesn’t make sense.”

Garlinghouse added: “I’ll tell you another story that is underreported, but worth paying attention to. Bitcoin is really controlled by China. There are four miners in China that control over 50% of Bitcoin. How do we know that China won’t intervene? How many countries want to use a Chinese-controlled currency? It’s just not going to happen.” Has the Ripple CEO given an impartial analysis? Add your say to the discussion.

This Week in Bitcoin Podcast

Catch the rest of this week’s news in the This Week in Bitcoin podcast with host Matt Aaron.

What other stories in the Bitcoin world caught your attention this week? Share your thoughts in the comments section below. 


Images courtesy of Shutterstock.


Verify and track bitcoin cash transactions on our BCH Block Explorer, the best of its kind anywhere in the world. Also, keep up with your holdings, BCH and other coins, on our market charts at Satoshi Pulse, another original and free service from Bitcoin.com.

Article Source

How to Explain Crypto Collectibles to Your Banker

How to Explain Crypto Collectibles to Your Banker

Courtney Brock manages business operations for Blockade Games in Austin, Texas.


Its May 11, 2018 and I receive a surprise in the mail: an overnight package from FedEx. It’s addressed to my company, Blockade Games.

Another surprise: Our bank, Wells Fargo, thinks we may be a money services business (MSB) and has a stack of paperwork for me to fill out. Thank you, traditional banking system. It’s not like we didn’t spend two hours answering all of these questions when we set up the account or anything.

The document is from Wells Fargo’s “Enhanced Due Diligence Center.” Yeah, you’re probably rolling your eyes like I am. Even better, if they don’t receive the requested information by the deadline, they’ll close our account. Fantastic.

Our contact’s name is Alex, and he’s actually pretty cool. He knows a little bit about cryptocurrency, but I have to do a lot of talking to explain how a video game company uses blockchain. He agrees we are not a money services business and instructs me on how to fill out the paperwork online.

I’m sure there are lots of other small companies utilizing blockchain technology that are going through similar situations, so this post is dedicated to them. A special dedication goes out to everyone building and innovating in the cryptogames space.

We formed Blockade Games in January to work on our first game, Neon District. The game hinges on a single concept: Almost every item is represented by a non-fungible token that has the ability to become rare and unique through game play.

The things we’re doing are new, and finding the right words to describe them can be difficult. But I’ll give it a go.

Talking to noobs about bitcoin

Stepping back, when talking to people about cryptocurrency I find most have at least heard about bitcoin. If they’re a little savvier, they might know about ethereum or litecoin. Some folks might have even heard about Ripple and XRP, but you can tell them that’s a story for another day.

Outside bitcoin, cryptocurrencies can be called altcoins or tokens (there is also an unflattering term that rhymes with “bitcoin”). Each of these designations has a different definition based on how the coin’s blockchain is developed.

Countries all over the world have different ways of classifying them for regulation and taxation. In Singapore, they’re considered a product until invested and then they get treated more like a stock. They’re a taxable asset in Israel and private money (whatever that means) in Germany.

Rounding up the ranks as the most progressive jurisdictions, Japan and Australia recognize bitcoin as currency, though the internet seems to be in disagreement as to whether either has brought it into full legal tender status. In the U.S., bitcoin and all other cryptocurrencies are regulated as commodities.

So, what makes bitcoin or any other cryptocurrency a commodity? A 2017 article from the Economist explains it pretty well:

“In economic terms, commodities are vital components of commerce that are standardized and hence easy to exchange for goods of the same type, and have a fairly uniform price around the world.”

In other words, they’re fungible. Every ounce of gold or oil will cost the same amount as any other ounce of gold or oil. One satoshi of a bitcoin will always be worth the same amount as all other satoshis in a bitcoin, just like pennies in a dollar.

That’s why it’s so easy to trade cryptocurrency like stocks. They’re fungible and interchangeable so no matter how much of a bitcoin you buy (and you can buy less than one bitcoin), variables like where the bitcoin came from should not change its market value. You’ll get exactly what you ordered. Unless you get bitcoin cash, but that’s also a story for another day. (Yes, my commentary brings all the trolls to the yard.)

In fact, the permanent public ledgers of these cryptocurrencies are so secure, it’s plausible we’ll see all forms of stocks and bonds tokenized in the coming decades.

Fun fact: Diamonds are not considered fungible nor are they traded on a commodity market. As anyone who’s shopped for an engagement ring knows, each part of a diamond is different in cut and clarity, so much so that the price of diamonds as a whole cannot be standardized. Each diamond must be individually inspected to determine its value.

Just like bitcoin is frequently called digital gold, non-fungible tokens (NFTs) could be called digital diamonds. The value of each token comes from a combination of rarity and identified desirable features.

Talking to noobs about NFTs

In the fall of 2017, teams from Decentraland and Cryptokitties attended the ETHWaterloo hackathon in Canada with a new protocol to play with.

Called ERC721, it was a departure from ethereum’s ERC20 standard for smart contracts, which are both programmable and fungible. The features of ERC-20s make them the perfect vehicle for the ICO. But ERC-721s were designed for something different.

The ERC-721 protocol makes each token unique. They may operate on the same smart contract, but each token has its own cryptographic signature.

For example, each Cryptokitty has a unique genetic code that assigns a kitty with physical “cattributes.” These kitties can then be bred to produce a new tokenized kitty with its own genetic signature reflective of the genetic signatures of both parents. A player can’t counterfeit a CryptoKitty as each kitty’s authenticity is recorded on the blockchain.

If being able to be able to distinguish a digital original from a digital copy weren’t revolutionary enough, CryptoKitties presented another new reality for digital games.

For the first time ever, a player could truly own the digital assets they acquire within a game. When an asset is purchased, owned, or gifted, it belongs to the player and not the game. If the game servers shut down, the assets don’t go with it. If a player wants to sell an asset, that’s up to them. And one day when enough game developers are using this technology together, players may be able to transfer beloved assets from one game into another.

On the surface, CryptoKitties can be seen as a silly game that briefly possessed people’s senses, causing them to spend over $20 million in ether on digital cats. In reality, CryptoKitties is a proof of concept for a technology with a mind-blowing range of potential use cases.

In November of 2017, bitcoin had broken $10,000 for the first time, thousands of altcoins and tokens had been launched, billions of dollars raised by ICOs … and digital cats became the first widely adopted commercial use case of blockchain technology. It shouldn’t come as a surprise, though: games are always a testing ground for revolutionary technologies.

Within a month, at least two to three blockchain games were being announced every day. It’s important to note that this wasn’t the first time blockchain technology had been incorporated into games or online collectibles. Several projects had already been paving the way, utilizing Counterparty tokens (fungible tokens created on the bitcoin blockchain.) However, the development of a non-fungible token standard was the spark of creativity needed to move crypto-gaming into the mainstream consciousness.

Still not an MSB

It’s May 31, and I receive a second identical package from FedEx. I open it with a lot more side-eye than curiosity this time.

Of course, it’s another money services packet from Wells Fargo. This time the letter informs me that that the bank has not received the requested information. At this point, I’m pretty confused because I know I sent back everything they needed the first time around.

Fortunately, there is an email waiting for me from Alex stating that they had the original document and just needed to clarify a couple more items.

I’m realizing that a large part of my job now involves educating professionals in other fields how to interface with a blockchain business. Especially banks.

Despite the fact that we can accept crypto as a currency and will occasionally pay for business operating expenses with crypto as a currency, our blockchain product is not a currency. I can see why this is confusing as all get-out to them.

Comparing NFTs to baseball cards is helpful. You can’t use a baseball card as money, but someone may pay money for a baseball card based on its unique and rare attributes.

Alex thanked me for my help in understanding this new and crazy world. I’m sure it’s not the last time I’ll be explaining how this works.

Explaining crypto image via Shutterstock.

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Article Source

In the Scramble to Fix Digital Identity, uPort Is a Project to Watch

In the Scramble to Fix Digital Identity, uPort Is a Project to Watch

Talk to any three blockchain entrepreneurs, and at least one of them will pitch a way for internet users to own their own data.

Recent privacy debacles at Yahoo, Equifax and Facebook have driven home the realization that anyone with a smartphone is walking, talking, searching, eating, posting, browsing fodder for advertisers, machine learning algorithms and thieves. And users neither control this data nor receive any compensation for giving it up.

Yet, blockchain fever – entering the mainstream at the same time as this data sobriety – appears to provide an antidote, and a rash of decentralized applications has appeared to help users monetize their data.

Using cryptographic technology such as public-private key pairs, such projects aim to let users of digital services control the data they produce, many times offering a marketplace where users can do things like selling their Yelp bookmarks to an advertiser for a few bucks’ worth of cryptocurrency.

But the team at uPort, an ethereum-based identity protocol, is going after a bigger prize.

Rather than ask, “How can I get paid for my data?” uPort aims to answer, “Who am I in the digital age?”

For Reuven Heck, co-founder and project lead at uPort, this isn’t the kind of problem that can be answered with just another app. Because the internet wasn’t built with an identity layer embedded, Heck said, tweaking the top of the internet – the application layer – just isn’t cutting it.

Rather, the internet needs to be rebuilt at a deeper level, and according to Heck, uPort aims to do just that:

“We believe we now have technology that allows us to build this as a horizontal layer across the internet … without being owned and controlled from an individual company.”

That ambition has led uPort – among the oldest projects under the umbrella of ethereum startup and incubator ConsenSys – to be regarded as one of the most exciting blockchain-based approaches to rationalizing users’ scattered, insecure digital identities.

The internet of identity

It’s notable that uPort has managed to attract a significant amount of interest despite not being focused on the end users.

According to Danny Zuckerman, uPort’s head of strategy and operations, the project emerged from persistent calls across the ethereum developer community for an identity system – preferably a decentralized one, given ethereum’s fundamental mission.

With that background, uPort decided the best approach was to give developers with a way to delegate the task of storing user-specific data on the blockchain by, Heck said, “integrating a few lines of code into your application.”

And yet, it’s not necessarily safe to assume that uPort will only be buried in decentralized applications’ innards, hidden from end users.

“There will be a lot of different ways that users interact,” said Zuckerman, because “it’s really this identity layer for the internet, and there’s not one way you interact with the internet.”

To explain what was meant by an identity layer for the internet, Zuckerman began with the “top-down mechanism” of the analog world, in which the government defines an individual’s identity in a limited number of ways: a passport number, a national identification number, a Social Security number, a driver’s license number. The specifics depend on the jurisdiction, but most people have one or two primary, officially sanctioned identifiers.

The web, by contrast, is a free-for-all.

“With the internet there started to be all kinds of other identity systems, typical username and password – basically anything where you identify who you are and create an account – and so there was this proliferation of many, many identities,” Zuckerman said. “And that started having user data captured in lots of different places, not under their control.”

And for many blockchain enthusiasts, that just doesn’t make sense. On the one hand, these multiple identities are challenging for everyone to juggle (without being subject to security slip-ups). On the other hand, allowing a single, centralized party take over digital identity is not ideal either.

Rather, uPort’s idea is to put users in charge of holding and, if they choose, sharing the data associated with their identity, using the same cryptographic protocols that allow them to control cryptocurrency without the need for a third party. And this goal is frequently called “self-sovereign identity.”

A crowded space

UPort is far from the only project working towards the goal of self-sovereign identity using blockchain technology.

The Sovrin Foundation is one of the most prominent examples of uPort’s competition.

The foundation is behind Project Indy, a set of identity tools launched last year by the Hyperledger consortium. In contrast to public, permissionless uPort, Indy is a hybrid: anyone can view the ledger, but writing to it requires permission. Also in contrast to uPort, Project Indy is planning an ICO.

Civic, which plans to fully roll out its identity platform later this year on RSK, a layer-two bitcoin smart contracts platform, recently raised $30 million in an ICO.

Microsoft and Accenture have unveiled an identity prototype that uses a private, permissioned version of ethereum.

Meanwhile, developers on the public ethereum network are working on a standard for tokenized identity. Called ERC-725, the standard is being spearheaded by Fabian Vogelsteller, the creator of the ERC-20 standard that powered a boom in the crowdsale of crypto tokens.

Finally, the team at Digital Bazaar – which has been working with the World Wide Web Consortium, a standards body – has launched an experimental “testnet” version of a blockchain-based identity solution called Veres One. Like uPort, it is public, permissionless and lacks a token of its own. Unlike ethereum-based uPort, however, it is a freestanding blockchain.

The risk of having all of these divergent, competing standards for blockchain-based identity is that they will recreate the current system: fragmented and siloed.

But most of these projects’ teams, including uPort’s, are aware of the risk and working with different standards bodies to try and build an interoperable system. UPort, for instance, joined the Decentralized Identity Foundation – which includes big names like Microsoft and Accenture, among others –  in order to develop a standard for everyone.

Heck underscored the importance of interoperability by citing the examples of WeChat, WhatsApp and Facebook Messenger. As impressive as these messaging apps’ userbases are, he said, “nothing really has replaced email.”

The reason, he continued, is that:

“Email’s the only universal thing which works across the world. You can send emails from anywhere to anyone. Everybody has something that’s compatible.”

Trying to go it alone is just bad business, he added, saying, “No solution that thinks they are winning now because they were earlier will win if they’re not on a joint standard.”

Momentum and roadblocks

And while all these solutions have made significant progress over the past year, uPort has a whole group of potential partners and clients in the various other “spokes” of ConsenSys. One of these spokes, Viant, is currently integrating uPort, while others – including OpenLaw, Meridio and Civil – are planning to do so.

Tyler Mulvihill, the co-founder of Viant, which plans to go live with its ethereum-based supply chain platform this year, told CoinDesk that using uPort as its identity solution was “a really easy decision,” not only because of the ConsenSys connection, but because “they’re leading the space in self-sovereign identity.”

Gnosis, a prediction market that was spun out of ConsenSys, used uPort to verify that each user was only submitting one entry to its Olympia tournament.

Outside of ConsenSys, Melonport, a decentralized asset manager based in Zug, Switzerland, is using uPort to perform know-your-customer and anti-money laundering (KYC/AML) checks.

But uPort’s most notable partnership is with the government of Zug itself, which is conducting a pilot program to register citizens’ IDs on ethereum. The first registry was completed in November, and the total is now over 200. The city government then announced a voting pilot using uPort last week.

Another pilot, in which uPort and Microsoft partnered with Brazil’s Ministry of Planning to verify notarized documents, began in June 2017. According to Heck, more such partnerships could follow.

“We are talking to other cities and governments at the moment – none of them we can talk about at this point,” he told CoinDesk.

In many respects, though, uPort has a long way to go.

The same questions that nag the ethereum ecosystem as a whole can make the way forward uncertain for uPort. How to scale the network to enable faster and cheaper transactions is a major hurdle.

Also important – arguably more so, given uPort’s focus on identity – is the question of how to protect users’ privacy when using a blockchain like ethereum, which is visible to anyone.

“Transparency in blockchain is obviously a feature,” said Zukerman, “but when it comes to personal data and identity data it’s a liability.”

Finally, there’s the question of what happens to a user who loses their private key, and with it, presumably, control over their digital lives. UPort has explored different solutions to this problem, starting with designating friends who can collectively vouch for a person and transfer the lost ID’s data over to a new public key. That was an ethereum-specific solution, though; the team is now working on a blockchain-agnostic one.

But still, even with these roadblocks, uPort has had no problem with its main goal, convincing developers to use its platform in their applications. Heck concluded:

“People come to us.”

Mirrors image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Article Source