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.

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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.

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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.

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EOS May Be Live But the Debate with Crypto Critics Continues

EOS May Be Live But the Debate with Crypto Critics Continues

After a messy weeks-long process, CoinDesk broke the news yesterday that the EOS blockchain is officially live.

To some, it’s already an event for the cryptocurrency history books.


Still, if you haven’t been following the event closely, it might beg the question, ‘What is EOS anyway?’

When we talk about EOS, think about a cloud computing service like Amazon Web Service. It’s a platform for the storing or hosting of data, except rather than using a centralized server, EOS is attempting to distribute the data in a distributed system using blockchain technology.

It was created by blockchain startup, Block.one, and was able to gather over $4 billion to develop its open-source software over a year-long initial coin offering (ICO).

Last week, however, Block.one turned its code over to the world, or more specifically, to developers willing to work on the software as well as 21 block producers who will approve its transactions. The idea is that, in order to be more efficient than your average blockchain, EOS reduces the number of individuals or companies that can validate transactions.

Rather than competing in a global open market like bitcoin’s, users who own tokens are constantly voting for block producers.

The votes

Sounds pretty ideal right? Well, the trick is getting a global network no one is supposed to control off the ground.

Some questioned the set-up, as it ensured the voting process went on for some time while all the distributed users of the network struggled to coordinate. In this way, the more damaging criticisms might come from those who were eager to point out this has been done before (with varying results).


Overall, it’s safe to say this voting process looked a bit confusing from the outside, and other market observers were perhaps a bit too quick to cast judgement.

Some even went so far as to blame the plan of action for the token’s poor market performance over the last few weeks.


Education to come

These comments point to a central issue – EOS operates differently than other blockchains.

This means it’s still taking the industry a while to see what EOS is trying to create and that this vision actually adds value to the users it wants to reach.

As long-time industry observers point out, it’s still not really clear who would want a blockchain that’s not that decentralized. After all, blockchain believers cite decentralization as a key advantage of blockchains over the existing financial system.

As these tweets show, some already have their minds made up about how EOS will work.

Some even go so far as to argue past investments are influencing current opinions on the project.

But with EOS is ranked as the number five cryptocurrency on CoinMarketCap, there are those who remain eager to defend its vision.

As the tweet below shows, crypto Twitter might be divided on this view for some time to come.

EOS money 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.

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Token Swaps: What Are They, How They Work & Why They’re Happening Now

Token Swaps: What Are They, How They Work & Why They’re Happening Now

So, your token is being sent to a new blockchain…

Far from an elaborate crypto scam, the decision to carry out this process, known as a “token migration” or “token swap,” has become increasingly popular among blockchain projects. Notably, two of the top 25 cryptocurrencies trading globally – Tron and EOS – are in the midst of such a transition, and at least two more top 30 tokens are expected to soon follow suit.

With millions – even billions – of dollars worth of tokens involved in each migration, the stakes are high. But despite this, the blockchain industry remains largely uninformed on token migrations and their implications. In a sampling of experts, CoinDesk found that even industry leaders were sometimes unable to answer basic questions about the process.

Nonetheless, much about token migrations can be discerned from those pioneering the shifts. For those who have undergone such transitions, they often represent a difficult but necessary step in realizing their project’s vision.

For Shawn Wilkinson, founder of decentralized storage startup Storj, which started its token migration in 2017, the rewards simply outweighed the risks.

He told CoinDesk:

“The idea is that you just need to rip the band aid off and be on a set of tracks that isn’t going to go off a cliff.”

But why would a project need to complete a token migration in the first place?

Often, the shifts are carried out by projects that begin by using the ethereum blockchain to raise money and distribute their tokens. The tokens distributed at this phase typically act as “placeholders” for those that will eventually be used when the project is live.

One benefit of this strategy is that traders don’t have to lock up this capital. Rather, they’re able to exchange these placeholder tokens on exchanges while they develop their technologies.

Therefore, a “token migration” has come to describe the process by which token holders’ balances are transmitted from their ethereum wallets to a given project’s new compatible wallets. After the switch, tokens have effectively “moved” from one blockchain to another.

However, it’s important to note that token migrations are not exclusively linked to live blockchain launches, and also take place when projects merely shift from one protocol to another.

For example, Storj’s token migration was prompted by its decision to move from a bitcoin-based protocol to ethereum due to scalability issues.

“We became increasingly aware that if we didn’t do [the token migration], the consequences would be pretty big,” Wilkinson said.

How do they work?

For users and investors, the degree of their involvement in the token migration process varies – typically according to where they store their tokens.

For those who store their tokens on exchanges, it is unlikely that they will have to take any steps to participate in the migration. Major exchange Binance, for example, says it handles “all technical requirements” of the process for the EOS, Tron, ICON and Ontology migrations.

San Francisco-based exchange Kraken also aims to reduce the difficulty of the process.

“We pause funding ahead of the transition, swap all the old coins for new and when we resume funding, all the old balances are for the new coins,” Kraken co-founder and CEO Jesse Powell explained. “It’s really as simple as that.”

However, users who store their tokens in wallets may need to initiate the process manually.

More specifically, they must undergo token registration, also called “mapping,” in order to send their tokens from the previous blockchain to the new network.

In practice, this process typically entails generating a project-specific key (for example, an EOS key) and sending tokens to it from the key address where the tokens were initially stored after purchase, prior to the mainnet launch (for example, an ethereum key).

Projects typically implement cut-off periods by which users must swap their tokens. In projects such as EOS, these are ‘hard’ deadlines after which tokens on the old blockchain will be “frozen” and inaccessible to users.

Other projects allow for open-ended migration.

What are the risks?

But despite exchanges’ efforts to simplify token migrations, risk is not entirely diminished.

“I don’t think there’s any perfect way to do a token migration,” Wilkinson said. “It’s always a pain, it’s always miserable, and there’s always, not a small chance, a very hefty chance, that you could screw things up.”

Dialogue with their communities is one way projects can mitigate a (thus far) common problem: a lack of awareness amongst token holders.

According to Wilkinson, despite initiating Storj’s token migration in 2017, users are still migrating their tokens one year on. Storj has continued to support its token migration, but for projects with hard token freeze deadlines, token holders stand to lose their money if they are unaware of the migration process.

Perhaps the most significant risk associated with token migrations is that they are not “trustless” processes.

Instead, users must place their trust in those in charge of the project to implement the shift according to plan. However, because token migrations are relatively novel, there is often no blueprint for their execution.

For this reason, Wilkinson said, “A lot of the stuff around the [Storj] migration we built from scratch.”

Though these risks are no small matter, they are not unexpected for such “bleeding edge” technologies, he added.

As for what projects currently undertaking token migrations should keep in mind, Wilkinson concluded:

“You have to make a bunch of correct assumptions to get it just right. What I found that worked for us is, we knew where we wanted to go, and we had to have a healthy bit of communication with our community to get them on board with the concept.”

Seagulls 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.

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Bank of International Settlements to Publish New Crypto Research

Bank of International Settlements to Publish New Crypto Research

The Bank of International Settlements (BIS) is dedicating two chapters of its forthcoming annual economic report to cryptocurrencies.

BIS – considered to be the central bank’s central bank – will publish those two chapters this weekend on June 17, the institution announced this week. The full report will be published on June 24.

The upcoming report will follow the bank’s most recent quarterly review, which warned that “many cryptocurrencies are ultimately get-rich-quick schemes.”

The review stated:

“What makes currencies credible is trust in the issuing institution, and successful central banks have a proven record of earning this public trust. The short experience of cryptocurrencies shows that technology, however sophisticated, is a poor substitute for hard-earned trust in sound institutions. “

Similarly, BIS touched on the topic in an opinion piece written in part by Markets Committee chair Jackqueline Loh in March. The piece claimed that public cryptocurrencies are not feasible options for a cashless society, as previously reported by CoinDesk.

By the same token, the bank has claimed that digital currencies issued by central banks could carry unwelcome side-effects, such as making periods of financial instability worse by helping banks’ clients funnel their money from their accounts more quickly.

“A general purpose CBDC could give rise to higher instability of commercial bank deposit funding. Even if designed primarily with payment purposes in mind, in periods of stress a flight towards the central bank may occur on a fast and large-scale, challenging commercial banks and the central bank to manage such situations,” BIS stated at the time.

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.

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Quantstamp Defends QSP, Says Dollars, Ether Accepted Out of ‘Necessity’

Quantstamp Defends QSP, Says Dollars, Ether Accepted Out of ‘Necessity’

A week after Quantstamp community members began accusing the smart contracts auditing startup of undermining the value of its $65 million token, the company responded with a statement on Thursday.

As previously reported by CoinDesk, for at least the past week, Quantstamp token holders have been alleging that the company misled them by accepting U.S. dollars and ether, rather than its token, QSP, as payment for its auditing services.

According to the company’s published materials, customers are meant to trade QSP to pay for, receive and improve verification services within the Quantstamp network.

The company told CoinDesk that the community’s concerns stem from a lack of clarity regarding the difference between two of its projects and admitted that the community’s frustration has indicated that Quantstamp “need[s] to do more” to clarify the distinction.

The products in question are, on the one hand, an auditing protocol outlined in its white paper and under development. The other one is a “web product” which it currently uses for audits.

“The Quantstamp web product is separate from our protocol that adheres to the vision outlined in our white paper and is still under development,” the company said.

The startup added that its move to accept ETH and USD for its services doesn’t diverge from its white paper, and said the alternative payments were also necessary due to restrictions on its token sale. Namely, because U.S. and Chinese buyers were excluded from participating.

“While Quantstamp has accepted QSP, USD, and Ether, the latter two are only accepted for our current offerings and out of client and customer necessity, as not everyone is currently capable of acquiring and using our token,” Quantstamp said.

The company declined to comment on CoinDesk’s inquiries pertaining to the percentage of audit reports they completed in exchange for USD or ETH.

Questions over audits

Community members also raised concerns last week over the company’s use of open-source technology in the 489 audits it claims to have completed to date.

The company told CoinDesk it is using a combination of “proprietary and open-source software” in its web product “with the sole purpose of increasing accessibility for non-technical users” such that it can target both the crypto community and the financial services industry.

Quantstamp co-founder and CTO Steven Stewart took to Medium on Thursday where he sought to clear up investors’ confusion over the functions of the company’s web product and its protocol.

“The web product is a proof-of-concept user-interface for requesting security audits of smart contracts and viewing descriptive reports. … that permits small payments of QSP,” Stewart explained. “Under the hood, the web product is intended to include and build upon smart contract analyzers such as Oyente (an open-source tool).”

The protocol, in contrast, will make use of a decentralized network of computers to verify smart contracts, and Oyente is one of the options the company is considering using as an analyzer for it.

Quantstamp intends to connect the web product with the next iteration of its protocol, scheduled to be completed by the end of August, according to Stewart’s post.

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Proposed Ethereum Roadmap Would Activate Its Biggest Upgrades Together

Proposed Ethereum Roadmap Would Activate Its Biggest Upgrades Together

The developer team behind ethereum is considering possible changes to a planned rollout of new technology upgrades.

Addressing rumors that such plans are now under review, ethereum creator Vitalik Buterin told a meeting of the platform’s open-source developers Friday that the idea is that the team might seek to alter the sequence in which Casper and sharding, perhaps its two most-anticipated updates, are activated.

Rather than releasing sharding and Casper separately, Buterin said, new advancements in research might enable both upgrades to activate together. (The idea is Casper might be released on a sidechain, or shard, rather than as a smart contract, as previously proposed).

“This is a substantial reworking of the intermediary steps in the roadmap, but of not the final product,” Buterin said.

Casper, ethereum’s long-planned consensus algorithm proof-of-stake, promises to be more energy efficient and egalitarian than its current proof-of-work system, while sharding could hold the keys to scaling the system to a massive number of transactions. In this way, Buterin stressed that, if enacted, the technologies would combine to create a version of the protocol that could be orders of magnitudes more efficient.

Buterin said:

“This design can basically scale up to the theoretical maximum.”

As detailed by CoinDesk, the current version of Casper (Casper FFG) is being tested in the form of a smart contract, named EIP 1011, on ethereum software clients. However, a result of today’s meeting, such development could cease in favor of the new design.

“As someone who has been working on this, it took a second to digest and to be comfortable moving forward with, but I am totally okay with this, and think it gets us where we want to be sooner rather than later,” author of EIP 1011 Danny Ryan said in the meeting.

In light of the news, ethereum developers also appeared open to the idea the platform’s next hard fork, named Constantinople, might not include any Casper-related changes.

Rather, a hard fork will likely occur within the next five months, that focuses on “improvements that we have smoothed out and ready to go, unrelated to that,” ethereum developer Nick Johnson said.

Key advantages

According to Buterin, combining the shift with sharding would come with several advantages.

“The development of the one system will be much more directionally en route to what we expect the final later stage sharding system to look like,” Buterin said.

Plus, by bringing the first version of Casper onto a shard, the deposit required to participate in securing the network will be reduced significantly, from 1,500 ETH, Buterin’s most recent estimate, to 32 ETH.

Due to this lowered figure, Buterin said, “regular individuals participating in staking directly becomes much more viable.” Buterin also said that the new model would allow Casper to go live without disturbing the ethereum blockchain itself.

“The Casper component is somewhat more separate from the main chain. That means it can be developed less intrusively in some ways, it can be developed as a separate chain and can have its own rules,” Buterin said. “There’s a much clearer wall between those systems.”

Sharding developer Justin Drake echoed these points.

“It allows to unlock new functionality which radically changes the performance properties of the design,” Drake said.

Drake also mentioned that there are security advantages for the new system. For example, such a system would allow for an “animosity” between nodes on Casper and sharding, increasing the security of both systems. “You can’t be a casper validator without also being a sharding validator,” Drake said.

The developer continued to state that there are advantages to bridging the Casper research team and the sharding team together.

He said in the meeting:

“In general, there will be more unity between Casper and sharding, and the teams lobbying these projects. I think that’s good, there will be more networks effects there.”

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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.

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Kurt Russell Is Going to Be in a Cryptocurrency Movie

Kurt Russell Is Going to Be in a Cryptocurrency Movie

Hollywood star Kurt Russell is one of a number of performers set to star in an upcoming indie film about cryptocurrencies.

The film, entitled Crypto, will feature Russell as well as Alexis Bledel, Jeremie Harris and Luke Hemsworth, among others. The Hollywood Reporter notes that the film focuses on a young anti-money laundering agent, played by Beau Knapp, who returns to his hometown in New York to investigate a case of corruption and fraud. Russell is playing the father of Knapp’s character, according to press materials.

Crypto’s producers are calling it “a thriller in the vein of The Firm and The Girl With the Dragon Tattoo” – but with a decidedly cryptocurrency-focused twist. The film was written by Carlyle Eubank and David Frigerio.

“Cryptocurrency has captured the attention and imagination of consumers and entrepreneurs all over the world but has never been explored in film in such a nuanced and exciting way,” Jordan Yale Levine, one of the producers for Crypto, was quoted as saying.

The independent film is currently shooting in New York with a release date not yet announced.

Crypto may be one of the most high-profile films to date to center on the world of cryptocurrencies. Last year, it was reported that the Coen brothers – the filmmakers behind movies like The Big Lebowski and No Country For Old Men – were working on a movie about the Silk Road, the now-defunct dark market that used bitcoin as its central currency.

Yet Crypto is far from the first movie to hone in on a cryptocurrency theme. One of the more notable – and, at the same time, unusual – forays in this area was Bitcoin Heist, a Vietnamese movie that involved an international, high-stakes manhunt.

Kurt Russell photo 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.

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Sweden’s Land Registry Demos Live Transaction on a Blockchain

Sweden’s Land Registry Demos Live Transaction on a Blockchain

Sweden’s land registry authority and a group of participating banks, businesses and startups have completed the third phase of an ongoing blockchain pilot.

It was announced Friday that the Lantmäteriet has passed the testing checkpoint with the aid of a number of partners. These include financial firms SBAB Bank and Landshypotek, blockchain startup ChromaWay, tech consultancy Kairos Future, real estate search portal Svensk Fastighetsförmedling, telecom Telai Sverige and IT firm Evry.

The group of companies, in sum, provided different elements that, combined, formed the components of the blockchain pilot. For example, Telia and Evry helped verify a live transaction between a buyer and a seller, according to statements. A live demonstration conducted this week included client-side verification of government-approved digital signatures and the final exporting of necessary legal contracts.

Those involved with the initiative said that the smart contract which facilitated the transaction is compliant with European Union laws and regulations, including the GDPR privacy rules.

ChromaWay chief executive Henrik Hjelte said in a statement that “in a distributed environment such as a blockchain, you cannot have a central server for verifying identities, it all has to be based on signatures and verified by the user.”

Project lead Jörgen Modin added:

“Although the project uses centralized ID services, that is those approved by the government, in a blockchain environment these signatures must be put under the same scrutiny as everything else, and hence we do verify in each and every client all the way up to the root certificate.”

The project began early last year, when the Lantmäteriet authorized the partnership with ChromaWay and other firms to explore how private blockchains can carry out property transactions, as previously reported by CoinDesk.

Photo of demonstration courtesy of ChromaWay

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.

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