Central Banks and the IMF Warm Up to (Centralized) Digital Currencies

Central Banks and the IMF Warm Up to Digital Cryptocurrencies

Sweden’s central bank, the Riksbank, is considering whether the country should introduce a purely digital form of government-backed money, perhaps using distributed ledger technologies (DLTs) similar to the blockchain technology underlying Bitcoin. This move is part of a recent trend: around the world, nations are considering cryptocurrencies issued by central banks; and recently, the managing director of the International Monetary Fund (IMF) gave a speech hinting at its interest in the concept.

A September 2017 report titled “The Riksbank’s e-krona project” outlines a proposal for a digital complement to cash, dubbed e-krona, which would be guaranteed by the state. “This is as revolutionary as the paper note 300 years ago,” Cecilia Skingsley, deputy governor at the Riksbank, told the Financial Times in November 2016. “What does it mean for monetary policy and financial stability? How do we design this: a rechargeable card, an app or another way?” Skingsley added that the type of technology to be used is under discussion.

“With regard to DLT including blockchain technology, this is relatively new and untried technology that does not yet have any applications similar to the e-krona described in the report,” states the new Riksbank report.

“Considerable research and development is being performed in DLT and many central banks are making efforts to research the technology, but there are only a few more significant DLT applications currently in production. This is partly due to the technology being so new and to it having some weaknesses, such as limitations in performance and a lack of standards and regulations. Development in DLT is progressing incredibly rapidly, however, and many major players are taking part in it.”

The report notes that an important difference between cryptocurrencies and fiat currency is that a cryptocurrency that is not backed by a central bank has no inherent value but only speculative value, which implies a high volatility.

According to the Riksbank, a digital central bank currency should work as a means of payment, unit of account and store of value. The proposed e-krona, targeted at the general public, combines these three functions. In particular, since the e-krona is a claim on the Riksbank and guaranteed by the government, it also fulfils the function as a store of value. The report assumes that the e-krona will be broadly available to the general public, but states that “it will not necessarily be a cryptocurrency, as this will depend on the choice of technology.”

“A cryptocurrency issued by a central bank can either be made available to a broad general public or limited to large and time-critical payments between banks,” continues the Riksbank report. “If anonymity is not a decisive/desirable quality of the currency, the general public can instead be given access to accounts with the central bank to obtain access to cash in digital form.”

Reading between the lines, it seems evident that the Riksbank does not consider anonymous transactions as a desirable feature, and would insist on filtering and managing the citizens’ access to a possible blockchain-based implementation of the e-krona.

Of course, there’s nothing surprising here. The Riksbank’s move is partly motivated by the fact that the use of cash in Sweden is rapidly falling, with more and more people using private and often mobile e-payment means. The e-krona could be an alternative to private e-payment providers, but anonymity is not one of the features of cash that the central bank wants to emulate. On the contrary, the e-krona, especially if blockchain-based, would give the government the means to easily monitor all transactions.

Global Interest in National Digital Currencies

The Riksbank isn’t the only central bank to consider issuing its own digital currency. The central banks of Singapore, Papua New Guinea, Canada and others are considering similar moves. A recent research paper issued by the Bank of Canada, which considers a possible Bitcoin standard similar to the gold standard, is especially interesting. Even China’s central bank is cautiously testing a digital currency.

The Bank for International Settlements (BIS), an international financial organization owned by 60 member central banks, has published a paper titled “Central bank cryptocurrencies” in its BIS Quarterly Review.

The paper makes a distinction between a “retail” central bank cryptocurrency (CBCC) and a “wholesale” one that would be used only by banks, and concludes that all central banks may eventually have to decide whether issuing retail or wholesale CBCCs makes sense in their own context. Here again, anonymity isn’t likely to be considered as a desirable feature, unless the citizens really want it.

“The main benefit that a consumer-facing retail CBCC would offer, over the provision of public access to (centralized) central bank accounts, is that the former would have the potential to provide the anonymity of cash,” argues the BIS paper.

Christine Lagarde, managing director of the International Monetary Fund (IMF), gave a speech at a Bank of England conference titled “Central Banking and Fintech — A Brave New World?

Lagarde uses the term “virtual currency” essentially as a synonym of “cryptocurrency.” According to Lagarde, virtual currencies such as bitcoin pose little or no challenge to the existing order because they are too volatile, too risky, too energy intensive and because the underlying technologies are not yet scalable. “Many are too opaque for regulators; and some have been hacked,” she added.

On the other hand, continued Lagarde, current technical challenges could be solved and the use of virtual currencies could grow exponentially, especially in countries with weak institutions and unstable national currencies. Virtual currency could also open the door to better payment services and new models of financial intermediation.

“[Citizens] may one day prefer virtual currencies, since they potentially offer the same cost and convenience as cash — no settlement risks, no clearing delays, no central registration, no intermediary to check accounts and identities,” concluded Lagarde. “If privately issued virtual currencies remain risky and unstable, citizens may even call on central banks to provide digital forms of legal tender.”

The post Central Banks and the IMF Warm Up to (Centralized) Digital Currencies appeared first on Bitcoin Magazine.

Continue reading…

 

How Decentralized Exchanges Make Bitcoin More Resilient (and Us More Free)

How Decentralized Bitcoin Exchanges Make Bitcoin More Resilient

Governments and central banks all over the world are gradually warming up to the idea of leveraging the unique advantages offered by blockchain technology — low-cost transactions permanently recorded in tamper-proof distributed ledgers — to modernize their financial systems.

According to sources familiar with the matter, the Indian government is considering a proposal to introduce its own cryptocurrency similar to Bitcoin, Business Standard reported last week. The new cryptocurrency would be managed by the Reserve Bank of India (RBI) and could be called “Lakshmi.” Other central banks are exploring similar ideas.

Of course, that will take time, and the governments are unlikely to support important features that make Bitcoin and other cryptocurrencies appealing to end users, such as mining and near-anonymous, paperwork-free transactions. Therefore, Bitcoin, Ethereum and at least some altcoins are likely to continue to prosper.

But some governments, such as China’s, don’t seem to like that. After banning Initial Coin Offerings (ICO), the Chinese government is moving to close the cryptocurrency exchanges operating in the country.

It appears that governments love blockchain technology but hate Bitcoin itself, as well as other “crypto-anarchic” digital currencies. Some governments are reacting in a panic because they are starting to realize that they can’t stop Bitcoin from becoming an alternative to their monopoly on currency, both as a means of exchange and a store of value. Centralized cryptocurrency exchanges are especially vulnerable, and other governments could follow China.

A Role for Decentralized Exchanges

Decentralized exchanges that use peer-to-peer (P2P) technology to bypass the need for a central exchange provider are an interesting option that could make blockchain-based digital currencies much more resilient.

Decred recently introduced atomic swap support for exchange-free cryptocurrency trading, showing that, at least for crypto-to-crypto trading (for example, exchanging bitcoin for litecoin), it’s perfectly possible to operate without exchanges. However, this doesn’t solve the problem of crypto-to-fiat and fiat-to-crypto trading, which is arguably of top concern for cryptocurrency users.

“Atomic swaps are the first sign in a new wave of decentralization,” Decred project lead Jake Yocom-Piatt told Bitcoin Magazine. “As trustless exchanges between pairs of cryptocurrencies, they offer new efficiencies for users who don’t need the formality of the traditional exchanges. It is going to be interesting to see how the trend develops, since for larger and more complex transactions with fiat currencies, LocalBitcoins and established exchanges are still the place to be.”  

Coinffeine is developing an open-source, P2P Bitcoin exchange platform that will enable users to buy and sell bitcoins securely and anonymously, without having to rely on a centralized exchange. The project seems promising, but it hasn’t shown much activity recently.

Bisq (formerly Bitsquare) provides an open-source desktop application that allows users to buy and sell bitcoins anonymously in exchange for national currencies or alternative crypto currencies. To protect users from fraud, both traders are required to place security deposits into a multisig-based escrow mechanism; the deposits are refunded after a trade completes. To handle disputes, Bisq features a decentralized and open arbitrator system. Bisq is now preparing to launch a decentralized autonomous organization (DAO) and an ICO for its BSQ token, a colored coin on the Bitcoin blockchain.

Decentralization and Freedom

Bitcoin Magazine reached out to Bisq developer Chris Beams for comments on government attacks on cryptocurrency exchanges, likely attack vectors and the impact of decentralized exchanges. Beams also offered a passionate and forceful defense of individual liberty against government over-interference.

“The panic has to set in at some point,” argued Beams. “But it will do so at different times for different governments, and will produce a range of responses from them when it does. I don’t think China’s recent actions — whether they’re the product of panic or something more strategic — will necessarily cascade into similar actions in the U.S. or Europe. Shuttering all exchanges by diktat is the kind of textbook totalitarianism the world has come to expect from China, but a similar attack wouldn’t work as well in the U.S. Even if it would, it would be a blunder for the U.S. to attack Bitcoin with such a blunt instrument. It would be suboptimal, a bad use of available resources. It would strengthen the decentralized exchanges that already exist and it would incentivize the creation of better, even more censorship-resistant ones.”

According to Beams, the U.S. in particular has much more effective tools at its disposal, especially Know Your Customer (KYC). The U.S. government forces nearly every centralized exchange, on day one of operation, to collect personal identity information about their users and to correlate trading activity with those identities.

Beams explained that U.S. corporations tend to take compliance seriously and actually do cooperate with these rules, meaning that U.S. regulatory agencies have, in principle at least, access to enough information to de-anonymize a large and growing percentage of all Bitcoin transactions. And plausible traceability of transactions is all they need to keep the threat of tax collection in force.

“If I were the U.S., I’d be ushering new Bitcoiners through the Coinbase cattle gate just as fast as they can be prodded,” said Beams. “If I were the U.S., I would have long since concluded there’s nothing fundamental I can do to stop Bitcoin itself, so if I can’t beat ’em, I’ll at least make sure I can continue to tax ’em.”

The recent John Doe summons delivered to Coinbase by the IRS shows that KYC is the attack vector of choice for the U.S., which could result in billions in taxes reported by people who fear that their Bitcoin activity can be audited. KYC appears to be a much more effective long-term attack vector than heavy-handed shutdown orders.

“So yes, by all means, let’s bring on the decentralized exchanges,” said Beams. “But they’d better be really and truly decentralized because if a government can stop them, they will — at least once they get big enough to become worth the effort. The attack vector with decentralized exchanges won’t be KYC, though, because any decentralized exchange that implements KYC will instantly be abandoned by its users.”

The attack vector for decentralized exchanges, said Beams, will be “the good ole four horsemen of the infocalypse.” In other words, decentralized exchanges will be vilified as tools for drug dealers, terrorists, pedophiles and money launderers.

“It’s the same script every time a government is interested in talking people out of their own freedoms. This attack vector won’t work for the exchanges that have achieved escape velocity levels of decentralization, but it may stop some and will make life difficult for others.”

Beams suggested that the only way to really stop decentralized crypto-fiat exchanges would be to outlaw Bitcoin trading altogether. “This would force people to think twice about every trade, and to consider whether their counterparty might be an agent, which would result in a profound chilling effect.”

However, he thinks that this sort of heavy-handed attack seems unlikely to be attempted in the U.S. or Europe because there are just too many vested interests in Bitcoin now. It’s more likely that the authorities will continue to insist on KYC, tolerate compliant centralized exchanges and demonize the decentralized ones.

“With all that having been said, I’m actually optimistic,” concluded Beams. “Attacks by state actors — real and threatened — are making every part of this ecosystem stronger. Bitcoin has proven itself anti-fragile as hell thus far, and by the time all the battles have been waged, what will emerge on the other side are alternatives to existing financial institutions — money, banks, exchanges and all the rest — that are actually better in every way than their traditional counterparts.

“We are being forced by the threat of state violence to design crypto-economic systems with the highest degrees of security, privacy and censorship resistance baked in from the protocol level up. That very pressure is what is propelling these solutions forward, I think, into a bright future of genuine financial freedom for people. I wouldn’t be working on this stuff if I thought otherwise.”

The post How Decentralized Exchanges Make Bitcoin More Resilient (and Us More Free) appeared first on Bitcoin Magazine.

Continue reading…

 

SPiCE VC Launches Liquid VC Fund With Tradable Token-Based Digital Securities

SPiCE VC.jpg

Venture capital firm SPiCE VC is announcing today the launch of the first ICO for a “Liquid VC” fund that will use the Bancor protocol to offer immediate liquidity to investors. The fund is open to pre-qualified investors according to specific country regulations. In the U.S., the relevant regulation is Regulation D, Rule 506(c).

“While equity crowdsourcing brought startup investments to the public, we are hoping that SPiCE with its liquidity and inclusivity will bring more people to investing in a venture capital fund, taking the portfolio approach, and avoiding the inherent risk of investing into a single startup or ICO,” said Carlos Domingo, co-founder and managing partner of SPiCE and a former CEO of Telefonica R&D.

SPiCE wants to leverage blockchain technology to disrupt the venture capital industry with regulatory-compliant, tradable securities tokens that entitle holders to 100 percent of net exit revenues. The Ethereum-based SPiCE token will act as a digital security, assuring that token holders get their share of the exits when they occur, and a tradable asset.

SPiCE advisers include Brendan Eich, inventor of JavaScript and co-founder of Mozilla and Brave, which launched the Basic Attention Token ICO; Eyal Hertzog, co-founder of Metacafe and co-founder and architect of Bancor; and entrepreneur Loïc Le Meur, co-founder of LeWeb. SPiCE is also partnering with the Aragon Network, a digital jurisdictional platform for decentralized organizations based on digital tokens.

“We are excited about SPiCE’s decision to utilize the Bancor protocol to add liquidity to its security token,” said Hertzog. “The extreme efficiency that blockchain and smart contracts technologies enable resulted in a volume of ICO crowdfunding for blockchain companies that has surpassed traditional early stage VC investment, and now with SPiCE VC, this revolution is coming for the funding of VCs themselves.”

“For me joining SPiCE VC was a no-brainer, after being in the tech industry for more than twenty years, this is the most exciting project with the best team that I have been working in my entire career,” Domingo told Bitcoin Magazine.

In March of 2017, Blockchain Capital launched a similar liquidity-enhanced venture capital fund called Blockchain Capital III: a combination of a traditional limited partnership and the Ethereum-based BCAP digital token. According to Brock Pierce, the fund provides “the investor base across the globe with the opportunity to invest into a leading venture fund via a liquid, tradable, digital token.”

“SPiCE is building on the pioneering work of Brock Pierce for Blockchain Capital and taking it to the next level by providing a mechanism for our token holders to have a direct economic interest in our fund rather, than an indirect one as in the Blockchain Capital case,” said Domingo.

“In their case, Blockchain Capital uses part of the exit proceedings to buy tokens on the open market to raise their price so token holders can sell them, while SPiCE transfers the money of the proceedings from exiting startups directly to our token holders via buybacks from them directly and not the open market. This way, we have less dependency on the liquidity level of tokens for the token holders to benefit. Also, to increase liquidity from the beginning, we are implementing the Bancor smart reserve.”

Domingo also said that whereas Blockchain Capital is an evergreen fund that reinvests up to 100 percent of all exit proceedings back into the fund, SPiCE is a closed ended fund that will be returning 100 percent of the proceedings form the exits to the token holders.

“We are very excited about how advances in blockchain technology can actually solve one of the major problems of investing in VC funds, having your investment tied into the fund for 7–10 years before you can see any returns,” Domingo said. “We also believe that this increased liquidity will bring inclusivity as well, and will open up the option to invest in VC funds to a new breed of investors that have been left out of this asset class till SPiCE VC appeared.”

The SPiCE fund will invest in promising pre-series-A and pre-ICO technology startups, bridging the gap between seed funding from angels or incubators, and the first-series-A or ICO funding round. “SPiCE VC will focus on companies in that gap, either pre-series-A or pre-ICO, because once a company crosses the chasm, it achieves the fastest growth in valuation, which SPiCE investors may benefit from via its liquidity,” notes the announcement.

The SPiCE token ICO is scheduled for late November.

The post SPiCE VC Launches Liquid VC Fund With Tradable Token-Based Digital Securities appeared first on Bitcoin Magazine.

Continue reading…

 

Decred Adds Atomic Swap Support for Exchange-Free Cryptocurrency Trading

Decred Adds Support for Atomic Swaps for Direct Cryptocurrency Trading Without Exchanges

Decred is announcing support for on-chain atomic swaps, which will allow cryptocurrency holders to trade directly, without having to rely on external exchanges. The cryptocurrencies initially supported are Decred (DCR), Bitcoin (BTC) and Litecoin (LTC).

“Support for on-chain atomic swaps is extremely useful,”Jake Yocom-Piatt, Decred Project Lead said in a statement. “Thanks to the foresight of the Lightning Network authors and developers, and the dedication of our own developers, it is our pleasure to deliver an important capability that has been discussed since the concept of cross-chain atomic transfers was proposed in 2013.”

Users can already begin performing exchanges between DCR, BTC and LTC using tools that the Decred developers have created. The tools are text-based at the moment, but will be integrated into the Decrediton GUI wallet in a future release.

According to the Decred team, this advancement disintermediates the exchange process, allowing for greater market fluency. It also delivers on the market desire for improved interoperability between currencies and the demand for new efficiencies that drive investor value.

“This is the first step in a progression toward high-utility, non-Turing complete smart contracts,” Yocom-Piatt told Bitcoin Magazine. “We look forward to a new generation of greater fluency between projects. It was a pleasure collaborating with the dev teams at Litecoin and Lighting Labs.”

The concept of atomic swaps (or atomic cross-chain trading) were first described by Tier Nolan back in 2013. A previous Bitcoin Magazine article provides a step-by-step explanation of a simple example where two users agree to swap agreed amounts of BTC and LTC and use the multisig and time lock features available in both Bitcoin and Litecoin basic scripting to synchronize two transactions on two independent blockchains without having to trust each other.

It’s worth noting that Lightning Network payment channels, now enabled by SegWit, make atomic swaps more powerful and easier to implement, and permit adding support for off-chain swaps.

“The addition of LN support allows for both on-chain and off-chain atomic swaps, meaning that trustless cross chain exchanges can occur,” noted Yocom-Piatt. “Since supporting LN does not break any existing functionality and only adds to Decred’s capabilities as a system of value storage and transmission, it is a very attractive target for addition to Decred.”

“On-chain atomic swaps are an important step towards enabling peer-to-peer cryptocurrency trading,” said Laolu Osuntokun, Lightning Network Daemon (LND) lead developer. “We are excited for this process to continue with off-chain atomic swaps over the Lightning Network in the near future. By taking this process off-chain, substantial latency and privacy improvements can occur.”

Decred (DCR) describes itself as “digital currency for the people,” completely independent, community funded and community owned. The project wants to build an open and progressive cryptocurrency with a system of community-based governance integrated into its blockchain,  including a hybrid consensus system to ensure that no group can control the flow of transactions or make changes to the currency without the input of the community.

“Decred is Bitcoin as it should have been,” noted crypto-investor Jon Creasy. “Bitcoin would be of the people, for the people. As great an idea as this was, however, Bitcoin soon became controlled by an ‘oligarchy,’ so to speak.”

It’s important to note that some countries, such as China, are attacking cryptocurrency exchanges as the weakest links in the crypto ecosystem. The Decred move shows that, at least for crypto-to-crypto trading (for example, exchanging bitcoin for litecoin), it’s perfectly possible to operate without exchanges. However, it doesn’t solve the problem of crypto-to-fiat and fiat-to-crypto trading, which is arguably of top concern for cryptocurrency users.

The post Decred Adds Atomic Swap Support for Exchange-Free Cryptocurrency Trading appeared first on Bitcoin Magazine.

Continue reading…

 

Blockchain Technology Plays a Critical Role in U.S. and International Open Government Initiatives

tech open door.jpg

On September 8, the U.S. government’s General Services Administration (GSA)’s program “Emerging Citizen Technology” hosted a workshop titled “Emerging Technology and Open Data for a More Open Government.” The participants in the workshop were directed to draft proposals that specifically use Artificial Intelligence (AI), blockchain technology and open data.

“Open data and emerging technologies — including artificial intelligence and distributed ledgers, such as blockchain — hold vast potential to transform public services held back by bureaucracy and outdated IT systems,” said Emerging Citizen Technology program manager Justin Herman. “We are opening the doors to bold, fresh ideas for government accountability, transparency and citizen participation by working with U.S. businesses, civil society groups and others to shape national goals for emerging technologies and open data in public services.”

At the workshop, several government agencies have indicated a strong government backing behind the development of blockchain technology. In particular, a representative of the White House Office of Management and Budget (OMB) stated that the Trump administration was serious about and committed to this technology, and would not be deterred.

The initiative is related to the fourth National Action Plan (NAP 4), which the U.S. government is releasing this year in the the framework of the multinational Open Government Partnership (OGP) and its Open Government Declaration. It is aimed at empowering citizens and advancing the ideals of an open and participatory government.

The September 8 workshop follows the first U.S. Federal Blockchain Forum, organized by the Emerging Citizen Technology program on July 18 to discuss blockchain use cases, limitations and solutions. Financial management, procurement, IT asset and supply chain management, smart contracts, patents, trademarks, copyrights, royalties, government-issued credentials, federal personnel workforce data, appropriated funds, federal assistance, and foreign aid delivery were among the government blockchain use cases discussed at the July 18 workshop. Participation was restricted to federal agencies’ managers.

The Government Blockchain Association participated in the September 8 workshop and shared details, reported by ETHNews, on the topics discussed. In particular, three priority areas were examined: a national identity system based on blockchain and biometric technologies and interoperable across different agencies; an open government innovation initiative aimed at improving the internal operations of government agencies through blockchain technology; and a blockchain open-interface framework to connect government blockchain pilots with external data systems.

The Government Blockchain Association, open to all interested individual, corporate and institutional members, was formed to explore blockchain-based solutions to problems typically faced by government entities.

“We are currently seeing deep and informed interest in blockchain [technology] across many levels of the public sector,” said Gerard Daché, Founder and President of the Government Blockchain Association. “This time next year, I would not be surprised to see dozens of pilots, legislative resolutions, and even funding spread across the various states and high up in the U.S. Federal Government specifically for piloting blockchain based innovation.”

The Association believes that blockchain technology, Bitcoin, distributed ledgers and cryptocurrencies will fundamentally transform how the government interacts with its constituents.

“We don’t believe blockchain adoption in the public sector needs to take over ten years as some suggest it might,” Daché added. “There is an excitement that is palpable so, our goal is to harness this enthusiasm and direct it into working groups that actually influence national, state and large city governmental policies.”

The post Blockchain Technology Plays a Critical Role in U.S. and International Open Government Initiatives appeared first on Bitcoin Magazine.

Continue reading…

 

Japanese Company Will Launch New Bitcoin Mining Operation With 7 nm Chips

GMO Internet Group Launches Massive Bitcoin Mining Operation With 7 nm Chips

GMO Internet Group, a Japanese provider of a full spectrum of internet services for both the consumer and enterprise markets, is launching a new Bitcoin mining business utilizing next-generation 7 nanometer (7 nm) semiconductor chips. “[We] believe this new business has high potential for increasing corporate value in the future,” states the company.

Headquartered in Tokyo, GMO IG comprises more than 60 companies in 10 countries. GMO IG’s size and financial muscle, as well as the novel technologies it wants to leverage, will make it a serious entrant in the Bitcoin mining industry, and one that could have a disruptive impact.

“We will operate a next-generation mining center utilizing renewable energy and cutting-edge semiconductor chips in Northern Europe,” GMO stated, emphasizing that they will invest in R&D and manufacturing of hardware including the next-generation mining chip. “We will use cutting-edge 7 nm process technology for chips to be used in the mining process, and jointly work on its research and development and manufacturing with our alliance partner having semiconductor design technology.”

The International Technology Roadmap for Semiconductors defines 7 nm semiconductor chip technology as the next technology iteration following 10 nm technology, which, in turn, follows the 14-16 nm technology that currently represents the state-of the-art hardware in the Bitcoin mining industry. Commercial production of 7 nm chips is still in the development stage with GlobalFoundries, IBM, Intel, Samsung and Taiwan Semiconductor Manufacturing Company (TSMC) competing for market leadership.

According to a recent article in Android Authority, TSMC seems to be in the pole position in this race, having already showcased a preliminary 7 nm SRAM chip — not yet a full system on a chip (SoC) but an important milestone. Intel is said to be planning the upgrade of a manufacturing plant in Arizona to start building 7 nm SoCs. Samsung and GlobalFoundries are also striving to catch up.

According to Quartz, 7 nm technology would be four times more energy efficient than the current Bitcoin mining industry standard. Therefore, once 7 nm chips are in use, all other miners will have to upgrade to stay in the game.

“It’s clearly the next generation of miners,” Diego Gutierrez, CEO of mining software developer RSK Labs, told Quartz. “The other [mining chip makers] will surely follow and create their own 7 nm chips if they are not already doing it. As [chip manufacturers] get the new technology, everybody can access it.”

“We believe that cryptocurrencies will develop into ‘new universal currencies’ available for use by anyone from any country or region to freely exchange ‘value,’ creating a new borderless economic zone,” notes GMO IG. “[Bitcoin] can be regarded as a distributed system whose credibility is secured by mutual monitoring by network participants, as opposed to legal currencies which are a centralized system whose credibility is secured by the issuer. And management of a distributed system such as [Bitcoin] requires a mining process.”

The entry in the Bitcoin mining sector of these new Japanese players with relatively deep pockets is likely to be welcomed by those concerned about China’s dominance of the mining industry. For example, Chinese mining operator and hardware manufacturer Bitmain plays a dominant role in the $70 billion Bitcoin economy. Its mining pools, Antpool, BTC.com and ConnectBTC, account for around 30 percent of all the processing power on the global Bitcoin network, while the company is also the market leader for specialized mining hardware, including ASIC chips.

In related news, another large Japanese company, DMM, announced the launch of its own Virtual Currency Division, scheduled to begin operation of a virtual currency mining business “DMM Mining Farm” in October 2017. According to the company, which hasn’t released further information, DMM will operate one of the 10 largest mining farms in the world before the end of 2018.

The post Japanese Company Will Launch New Bitcoin Mining Operation With 7 nm Chips appeared first on Bitcoin Magazine.

Continue reading…

 

Second Life Creator Uses Blockchain Tech to Enhance New VR Gaming Experience

Second Life Creator Uses Blockchain Tech to Enhance New VR Gaming Experience

High Fidelity, a next-generation platform for virtual worlds currently in open beta, is the brainchild of Philip Rosedale, the creator of Second Life. Readers who don’t know what Second Life is are excused because it’s not on the media’s radar these days. But 10 years ago Second Life was often hailed as the Next Big Thing in social media.

In Second Life, players can create an avatar and explore a huge 3D virtual world created by the users themselves. The expectation was that the “Metaverse” imagined by science fiction writer Neal Stephenson in his cult novel Snow Crash (1992) would soon materialize and billions of users would flock to Second Life.

Therefore, a strong presence on Second Life would be a strategic need for all sorts of businesses and organizations, from online retailers and advertisers to universities and government agencies. This perception created a thriving Second Life development and consulting sector, and some companies (this writer owned one) made good money for a couple of years.

Then, Second Life faded into oblivion, sort of. In hindsight, the problem was that Second Life isn’t immersive enough (users don’t really have the impression of “being there”) and it is too difficult to master.

High Fidelity wants to change that by supporting highly immersive Virtual Reality (VR) interfaces, including VR headsets like the Oculus Rift, sensors for hand and body motion, and 3D audio. Rosedale hopes that a fully immersive 3D world, like the OASIS world described in a more recent cult novel (Ernest Cline’s Ready Player One, 2011), will be both more appealing and easier to use than Second Life. For example, if you want to shake another avatar’s hand, you just do it, instead of having to remember a Ctrl-Alt-Something command.

Another important difference is that High Fidelity is much less centralized than Second Life, and it allows creators to host independent virtual worlds using their own equipment and infrastructure.

As for Second Life, it’s still there and business hasn’t entirely disappeared. While the big corporations and organizations are mostly gone or inactive, there’s a thriving virtual retail market for things like design avatars, virtual clothes, gadgets and prefabs. It’s small business, but some developers earn a living on the Second Life Marketplace. Of course, counterfeited and pirated virtual goods represent a problem.

Second Life virtual goods are priced in Linden dollars, a virtual currency fully integrated with the Second Life platform. Introduced long before 2009, the Linden dollar is not a blockchain-based cryptocurrency.

Now, Rosedale has a cryptocurrency in the works dubbed HFC for the High Fidelity Marketplace and a whole ecosystem including externally-operated servers. Contrary to the Linden dollar, which is only a payment means, the HFC will leverage blockchain technology’s ability to track transactions and ownership.

“We are getting ready to deploy blockchain software to create a new currency for virtual worlds, called HFC,” says Rosedale. “In addition to providing the basis for in-world transactions, the HFC blockchain will also be used to store information about the ownership of digital assets in virtual worlds. We plan to use this aspect of the blockchain to provide an open way to protect intellectual property by embedding certification, affirming item ownership into the blockchain.”

In another post, Rosedale provides more details on the intellectual property protection mechanisms envisioned for High Fidelity. “This system will work across an open network of many different servers, does not need to use ineffective DRM systems, and is not dependent on or controlled by any central agency (other than the initial first registration of unique assets),” he explains.

According to High Fidelity, the open, permissionless nature of the Bitcoin and Ethereum blockchains cause limited throughput (transactions per second) and high transaction fees, which makes them unsuitable for HFC. Therefore, Rosedale’s team is developing a public but “permissioned” blockchain, where only a subset of trusted participants can verify transactions. It could be argued, however, that High Fidelity is being too quick in dismissing new scaling solutions that could lead to higher throughput and lower fees in the Bitcoin and Ethereum blockchains.

Rosedale notes that the Linden dollar, not based on a blockchain, shows remarkable stability in price, with much less volatility than blockchain-based cryptocurrencies. High Fidelity plans to achieve a similar stability “through active management […] voting, smart contracts and other mechanisms to regulate the monetary policy.”

The High Fidelity community is encouraged to provide feedback on HFC. “We’ve been discussing and getting feedback on these designs in our ongoing community meetings in High Fidelity,” says Rosedale.

More information is available on related discussion threads in the High Fidelity Forums.

The post Second Life Creator Uses Blockchain Tech to Enhance New VR Gaming Experience appeared first on Bitcoin Magazine.

Continue reading…

 

Op Ed: Beware the Perils of Over-Regulation for ICOs

Op Ed: Beware the Perils of Over-Regulation

Last week, the U.S. Food and Drug Administration (FDA) approved the gene drug Kymriah for certain types of cancer. However, Kymriah costs $475,000 for one single treatment, Bloomberg reports, which is well beyond being affordable for average patients.

In the U.S., the FDA approval process itself adds billions of dollars to drug development costs, which pharmaceutical companies must then recover, and also adds years to the drug availability timeline. The impression that suffering U.S. patients are required to pay exorbitant drug prices to support over-regulation is difficult to escape.

To operate beyond the reach of FDA regulations, Peter Thiel and other libertarian investors are funding an offshore human clinical trial of a herpes vaccine, TechCrunch reports. Thiel’s move has caused a stormy debate with clashes between opposite positions. See, for example, the opposite takes of DailyBeast and Reason.

There are many other examples of the harmful effects of over-regulation in the health sector, but these matters of life and death are too serious to be used for a political point. However, other sectors can illustrate the ethical and economical problems of over-regulation.

Take, for example, internet gambling, which is illegal in many jurisdictions including the U.S.

It’s worth noting that internet gambling is hugely popular, and the sector moves a lot of money. The ethical objection to making internet gambling illegal is easy to formulate: The adult citizens who want to gamble their own money online should be free to do so.

The economical objection is also easy to formulate: Adult citizens who want to gamble their own money online will find ways to do so, by using offshore service providers if there’s none at home or by going through Tor or a VPN if needed. But, if online gambling providers are forced to move offshore, they’ll take a lot of jobs and a lot of money with them.

This is exactly what has happened in the online gambling sector, with many U.S. providers migrating to more gambling-friendly jurisdictions such as the U.K. Similarly, the Isle of Man government recognized internet gambling as a potential strategic growth sector and established a suitable legal and fiscal framework to attract online gambling and sports betting businesses. As a result, leading operators flocked to the island.

Since those U.S. residents who want to gamble online will do so anyway, the only effect of over-regulating the industry is to take money, jobs and technology offshore.

Actually, this is not entirely correct: Besides moving offshore, the less scrupulous operators also have the option of moving underground. In that case, it would force those who want to engage in totally harmless gambling to deal with a shady or even criminal underworld, which can be dangerous. This same point, which seems perfectly logical, is often made in support of drug liberalization.

Crypto Innovation Takes the Path of Least Resistance

After having introduced light and relatively permissive regulations to attract internet gambling operators, the Isle of Man adopted the same strategy for cryptocurrencies and digital fintech. Switzerland is following on the same path, with the “Crypto Valley” near Zug attracting more and more crypto-fintech operators.

Initial Coin Offerings (ICOs) and token sales are a relatively new crypto-fintech phenomenon that is attracting lots of attention from the press, from old and new businesses, and now from the regulators.

In July, the U.S. Securities and Exchange Commission (SEC) issued a first ruling which outlined that some tokens are to be considered as securities and subjected to rather strict SEC regulations. Other regulatory authorities, such as the Canadian Securities Administrators, are considering plans to follow suit.

On Monday, the People’s Bank of China (PBoC) and Chinese regulatory bodies banned and deemed illegal the practice of raising funds through crypto-token ICOs, as reported by Reuters. This seems to conflict with recent, much more reasonable statements from the Director of PBoC’s Digital Currency Research Institute, which could indicate internal disagreement.

The regulators are mainly concerned with protecting gullible citizens from scams, which are inevitably common in the ICO scene. Perhaps the Chinese regulators are just temporarily freezing ICOs until they have a chance to put a sound regulatory framework in place. But it can be argued that, if their intention truly is to ban ICOs outright, then regulators are overreacting in ways that deny useful options to businesses and citizens alike.

According to the SEC and the CSA, only tokens with an underlying utility rather than a speculative investment value alone can escape being considered as securities. But, as always, the devil is in the details. If a token is really useful, its market value will go up, and speculative investors will profit. The question that comes to mind is, at which point does a useful token become a speculative investment? According to specialized lawyers, “the SEC has not provided a clear answer.”

“Obviously not everything that appreciates in value is a security,” notes crypto investor and CEO of 21.co, Balaji Srinivasan, in an insightful CNBC interview. “For example, a house can appreciate in value, but you can (and many people do) buy it for the use value.” But regulators could be tempted to follow China’s lead and consider all useful tokens as securities, which seems to be dangerous overkill.

The SEC regulations restrict investing in privately offered securities to “accredited investors.” But less than 10 percent of households in the U.S. are wealthy enough to qualify as such, and there are other strict requirements as well.

Therefore, if all useful tokens are considered as securities, the ability for creators of value to raise funds is significantly hampered, and average citizens are denied the opportunity to bet on innovative projects that could offer significant returns.

It’s now to be expected that Chinese crypto-token initiatives, including those that are not scams but are really innovative and promising projects, will move offshore and take jobs and money with them. Similarly, should U.S. crypto regulations become more restrictive, many U.S. companies could be tempted to follow the example of Xapo and relocate to Switzerland. Last week, blockchain company ShapeShift announced its decision to leave the State of Washington due to local over-regulation.

Srinivasan’s well-argued thesis is that crypto-tokens will democratize investment, open new fundraising options to businesses and new investment options to the public — including small businesses and average citizens — and turn the internet into the world’s largest “stock” market.

“The regulatory framework will likely eventually accommodate this,” concludes Srinivasan. “Only a few countries need to allow it, and the consequent creation of wealth will be so large that it’ll push many of the rest to have a liberal tokenization regime as well.”

The regulators should take this wise advice into account in formulating reasonable policies for the crypto-token sector, as well as the other sectors mentioned above.

The post Op Ed: Beware the Perils of Over-Regulation for ICOs appeared first on Bitcoin Magazine.

Continue reading…

 

SONM: A Universal ‘Fog Supercomputer’ Powered by the Ethereum Blockchain

SONM: Universal ‘Fog Supercomputer’ Powered by the Ethereum Blockchain

A frequently heard critique of blockchain technology is that mining is a power-intensive process that consumes energy, generates heat and damages the environment for the sole purpose of maintaining the blockchain. On one hand, maintaining an open and secure blockchain is important and, therefore, worth the energy it costs to maintain it. On the other hand, perhaps the energy spent can be partly redirected toward other important applications.

SONM (Supercomputer Organized by Network Mining) is an ambitious project that wants to turn mining computers into nodes of a worldwide supercomputer able to tackle demanding, resource-intensive computing tasks of any nature. And it is betting on the second approach.

According to the SONM white paper, “SONM is a decentralized worldwide fog supercomputer for general purpose computing from site hosting to scientific calculations.” Fog computing can be seen as a distributed form of cloud computing where computing tasks are not sent to large remote data centers but farmed to more localized networks of end-user devices.

“From a technical point of view, SONM is a top layer of underlying P2P technologies: BTSync for data transfer, Cocaine open source PaaS technology as a decentralized computing platform, and Ethereum Smart Contracts as a consensus system,” notes the white paper.

The SONM platform uses a token of the same name — SONM (ticker SNM) — on the Ethereum blockchain. An SNM presale launched on the 15th of April and was successfully completed in less than 12 hours, raising 10,000 ETH. On June 18, SONM announced that the SNM crowdsale had reached its $42 million cap, closing just four days into the sale. SNM tokens are now listed on exchanges including HitBTC and EtherDelta.

The SONM business model is based on the fact that the computing market has enjoyed double-digit growth every year for the past several years and, according to the SONM team, fog computing is more cost efficient and faster than cloud services.

SONM wants to be an aggregator, providing a P2P marketplace to connect end users to fog computing service providers. “Mining” is considered to be any computing work that fog computing service providers — or “miners” —  do to execute a task. In return for their work, miners are rewarded with SONM tokens which they can use to pay for other services on the platform or cash out on exchanges. Thus, end users can save time and money using the SONM network to run their tasks and miners can lend their unused computing power and generate revenue through running tasks on their machines.

Paolo Tasca, a digital economist and blockchain expert, recently joined the SONM Advisory Board. Tasca is the Executive Director of the Centre for Blockchain Technologies at University College London, as well as a blockchain consultant to the United Nations and EU Parliament, and the co-editor of “Banking Beyond Banks and Money: A Guide to Banking Services in the Twenty-First Century.”

“We have reached the Fourth Industrial Revolution, which will fundamentally alter the way we live, work, and relate to one another,” said Tasca. “New technologies are dramatically transforming our society into something very different from what we were used to thinking about over the last few decades. The possibilities that have been unlocked by billions of people and smart devices collectively connected  — with unprecedented processing power, storage capacity, and access to knowledge  — are vast.”

“By 2025, most of Earth’s population, will be online and by 2030, the Internet of Things will comprise 100 billion connected devices,” continued Tasca. “Under this extraordinary wave of connectivity and digital transformation, SONM distributed cloud technology will allow processing a nearly infinite amount of data streamed from a world of sensors and connected devices that will envelop our business and private lives, changing products and habits.”

According to Tasca, while cloud computing offers several advantages such as ubiquitous on-demand or metered and self-service access to computing resources, it presents shortcomings as well including:

  1. limited bandwidth and service outages,

  2. security and privacy,

  3. vulnerability to attacks,

  4. limited control and flexibility,

  5. cloud computing platform dependencies, and

  6. comparatively higher costs.

“Fog computing, also sometimes called edge computing, aims to solve most of the cloud computing disadvantages by keeping data closer ‘to the ground,’ in local computers and devices, rather than routing everything through a central data center in the cloud,” Tasca told Bitcoin Magazine. “Fog computing allows for data to be processed more rapidly and accessed more efficiently from the most logical location, which reduces the risk of data latency.”

While cloud technologies require trusted infrastructure, centralized governance and orchestration, fog technologies work independently of centralized authority. According to Tasca, SONM fog technologies could become an integral part of the future Internet of Things (IoT), with multiple SONM nodes automatically downloading and executing tasks from the market place.

A “killer” feature of SONM is its ability to “provide IaaS [Infrastructure as a Service] for almost any current cryptocurrency startup or ICO project,” said Tasca. “We can host Ethereum miners or even full nodes, or Storj clients, or whatever. All those startups are competing for users’ computers. SONM can be a platform for all of them. From a user perspective, this gives the ability to swiftly switch between multiple projects with a click of a mouse. Install SONM and turn your computer or mining rig into a test polygon to run different apps.”

According to Tasca, there are several key features of SONM including the ability to buy and sell general purpose computing power on the open market and to make these payments with cryptocurrency. Global IaaS allows users to acquire sizeable pools of resources at will for a desired time period without obligations to renew.

At the moment, the SONM computing power marketplace supports only simple bid/ask orders but more sophisticated features are planned. “Next steps are derivative instruments, such as options and futures,” said Tasca.

It also allows for the development of truly decentralized, scalable, general purpose applications in a PaaS [Platform as a Service] environment. For miners, SONM gives them the ability to use mining equipment to accept and execute the computing tasks for which there is more demand.

SONM vs iExec

iExec (I Execute) is a distributed GRID computing platform somewhat similar to SONM. GRID computing distributes demanding High Performance Computing (HPC) applications across participating computing nodes. The Worldwide LHC Computing Grid, is a high-profile example of this sort of HPC project. It is led by CERN, the European Organization for Nuclear Research, and is dedicated to processing data produced by Large Hadron Collider (LHC) experiments at CERN.

According to Tasca, SONM’s fog computing concept is more flexible.

“The key difference is that iExec is for GRID [computing], while SONM is for general computing,” explained Tasca. “SONM can run both deterministic and non-deterministic tasks. A non-deterministic algorithm is an algorithm that exhibits different behaviors on different runs, even on the same input, as opposed to a deterministic algorithm. The non-deterministic algorithm, then, can be used to process non-deterministic tasks that need continuously different behavior patterns, like video streaming, while deterministic algorithms suit deterministic tasks that need precise scientific calculations, like bioinformatics.”

The concept of a non-deterministic algorithm could sound self-contradictory and even oxymoronic, but Tasca went on to explain how it is used in the SONM context. A deterministic task will produce the same output if it is launched on different machines, possibly at different times. If two machines running a deterministic task produce results that don’t match, then one machine may be malfunctioning or its owner may be cheating.

Under the SONM paradigm, a non-deterministic task is a task wherein its definition and input is not completely defined by its owner. “It means that, while execution will take place, the task will look for or accept additional information from an outer scope. For example, if a task internally makes use of random numbers, or it is serving external requests (not defined by the task owner), then the task results may differ. If you launch such a task on two machines, the results may vary.”

For example, a web server produces results that depend on the HTTP requests received, and those requests are not part of the task definition. Similarly, a game server can use light tracing simulations driven by random numbers.

“The SONM network not only processes scientific calculations for projects like drug development, bioinformatics and aerodynamics,” concluded Tasca, “the system can also deal with non-deterministic projects, from site hosting to game servers. This latter aspect makes the SONM network a universal tool for running computing tasks of whatever difficulty.”

The post SONM: A Universal ‘Fog Supercomputer’ Powered by the Ethereum Blockchain appeared first on Bitcoin Magazine.

Continue reading…

 

Banking on Bitcoin Available on Netflix: A Good Intro to Bitcoin in Need of a Sequel

Banking on Bitcoin Available on Netflix: A Good Intro to Bitcoin in Need of a Sequel

The independent film Banking on Bitcoin, covering Bitcoin’s roots, its possible futures and its underlying technology, is now on Netflix. “Bitcoin is the most disruptive invention since the internet, and now an ideological battle is underway between fringe utopists and mainstream capitalism,” reads the Netflix news release. “The film shows the players who are defining how this technology will shape our lives.”

Banking on Bitcoin is a good film, professionally produced. On the hugely popular Netflix platform, the film will give many newcomers an understandable first introduction.

The overall impression is that this a good historic and ideological overview of Bitcoin’s first development phase but it’s in need of a sequel. From its cypherpunk roots and days of early adoption, the film focuses on the digital currency’s rocky relationship with the banks and regulatory bodies, setbacks like the fall of MtGox and the Silk Road, as well as some figures who were “first through the door,” like Charlie Shrem, Erik Voorhees and Gavin Andresen.

At the same time, Bitcoin and crypto enthusiasts are likely to find two shortcomings: First, the film dedicates too much time to stale old news like Silk Road and BitLicense, and not enough to new developments. Second, because it was first begun in late 2013 and wrapped up in the fall of 2016, the coverage of recent developments is very limited: The film essentially stops at the end of 2015.

Bitcoin Magazine reached out to the film’s director/writer/producer Christopher Cannucciari and associate producer Phillip Galinsky to find out more about the film’s background and their future plans.

What is your background, and what has been your role in the film?

Christopher Cannucciari: I had become interested in digital currency while I was producing a 2009 documentary in Kenya and some locals had introduced me to what would become mpesa. Kenya had just had a major crisis due to post-election violence of 2008. The banks had shut down and Kenyans came up with the novel idea of texting phone credits which could be used as money to pay for goods and services. Upon my return the thought of new ways to used technology as money stuck with me. Fast forward to 2013 and my interest in Bitcoin became so strong that I decided to bring my abilities as a filmmaker to it.

Phillip Galinsky: I’ve been involved in the film since the beginning when it was just Chris working in the role of Director and myself working in the role of Producer. Chris and I were working together on an unrelated project over a three-day shoot and I kept noticing (and occasionally mentioning to other members of the production team) that the price of bitcoin was skyrocketing. 

Others working on the project seemed skeptical at first, but as the weekend drew on and the price nearly doubled, people became more interested. Chris and a number of other team members asked me to explain what bitcoin was and how it worked. 

I was (and am) primarily interested in Bitcoin from a technological and moral consequentialist perspective, so I walked through the basic functions of blockchain technology, and attempted to explain how the capacity of blockchain technology to enable distributed, decentralized, censorship-resistant databases is a crucial enabling factor for development and implementation of the next generation of free and open global societies. My technical and somewhat arcane explanation turned out not to be the most effective way introduce the technology to the crew, and a number of people expressed interest in a gentler and easier to digest source of information about Bitcoin.

Chris in particular wanted to know more about Bitcoin due to previous experiences that showed him the power of technology as currency, and took note of the fact that, although Bitcoin had been around for about half a decade by then, most people still hadn’t heard of it and there were few high quality resources to be found that were targeted toward informing a general audience about the technology. 

I introduced Chris to the NYC bitcoin community and we worked together on the many components of documentary film production.

What is the main message that viewers should take away?

Christopher Cannucciari: Before the public passes judgement on Bitcoin, they deserve to know where it came from, how it works and how it fits into society.

Bitcoin didn’t come from nothing, it came [off] the shoulders of the Cypherpunks. Bitcoin is a technology, and technologies are neither good nor evil, but rather [they’re] accelerants. Society can use it as a tool however they see fit, and our hope is that those who wish to learn about Bitcoin will understand that it is there for them to participate as much as anyone.

The film doesn’t cover developments after the end of 2015 (price increases in 2017, investments, DAOs, spectacular ICOs, sidechains, Lightning Networks…). I guess you had to take a long time for post processing and marketing (probably for lack of funds) between the end of shooting and the first release?

The story of Bitcoin is just too big to fit in a single film. Banking on Bitcoin is a primer for what Bitcoin is, where it came from and how it survived its initial challenges. As a primer, the audience can then dig in deeper and discover the many more complex stories.

We certainly could have tried to fit in many more stories, subjects and details, but the film would have lost its focus rather quickly. It was essential for us to honor the initiated while holding the attention of those who wanted an entry point to this amazing subject.

Vitalik Buterin appears in a couple of scenes but is never mentioned, and Ethereum is never mentioned. Why?

Christopher Cannucciari: I held interviews with Vitalik in Toronto, Wences Casares in Silicon Valley and even traveled to the Bitcoin Bowl in Florida. As much as I wish I could have kept these stories in the film, we had to keep focus on what was unfolding before us in New York.

Ethereum deserves its own story and perhaps we can find a way to tell that story in the future.

You often mention the tension between the original libertarian, crypto-anarchist spirit of Bitcoin and its new “sanitized” mainstream aspects, Ben Lawsky’s regulations and Blythe Masters’ Wall Street blockchains. What’s your own take?

Christopher Cannucciari: The Crypto scene in New York was amazingly vibrant and the state had a golden opportunity to foster it and give New York the same innovative energy Silicon Valley had in the 1980s. What happened instead is Bitcoin was eyed with suspicion and the regulations around it made it difficult for “garage” entrepreneurs to participate. It is now left to those who can afford to work with the regulators.

Phillip Galinsky: There are both positive and negative consequences of the adoption of blockchain technology by “Wall Street.” All blockchain development, both open and closed source, has the positive consequence of informing developers about the limitations and capacities of the technology. Open source endeavors produce the most accessible and immediately useful technologies to facilitate further blockchain invention and innovation. However, even closed-source development produces valuable knowledge about the possible uses of blockchain technology; for example, this white paper released by Blythe Masters’ firm Digital Asset Holdings which goes into great depth about one of the many possible uses of blockchain technology.

This is not to say that all blockchain based systems will be positive or bear normative value from a moral consequentialist perspective. Blockchain technology is incredibly powerful and will shape the future of human interaction and societal system architectures, for better or worse, and it is largely on the shoulder of developers to ensure that the blockchain is used to increase well-being in the world. 

Is the end meant to suggest that Craig Wright is Satoshi? What is your own bet? Who is Satoshi?

Christopher Cannucciari: It’s very interesting how this is a sensitive issue. Craig Wright was presented in the same way as Dorian [Nakamoto] was. The carousel of Satoshi’s identity will continue; Wright will not be the last to come forward.

While Wright is most certainly not Satoshi, some have suggested that he was a drop for the real Satoshi. The timing was interesting, Wright was in need of capital to settle some big debts and all of a sudden he was in possession of some valuable, early Satoshi-era Bitcoins. For those who want to play the Satoshi game, I added this breadcrumb to keep the search on.

The Bitcoin/blockchain story is far from over. Are you working on a sequel to the film, and what role does blockchain technology play in your future work?

Phillip Galinsky: There will certainly be an ever-increasing wealth of material for filmmakers to cover in the blockchain space in coming years, as many of the most exciting developments in blockchain technology — self-executing contracts, oracles, distributed autonomous organizations, and most fascinating to me, blockchain-based societal control systems — are still in the nascent stages of development and implementation. Chris and I have discussed the possibility of making a sequel; however, we haven’t made any specific plans to do so at this point in time.

The post Banking on Bitcoin Available on Netflix: A Good Intro to Bitcoin in Need of a Sequel appeared first on Bitcoin Magazine.

Continue reading…