Wednesday, July 26, 2017

Richard Branson's Private Blockchain Summit Begins on Necker Island - Bitcoin News (press release)


Bitcoin News (press release)

Richard Branson's Private Blockchain Summit Begins on Necker Island
Bitcoin News (press release)
This week Sir Richard Branson and the Bitfury Group are hosting another 'exclusive' bitcoin and blockchain retreat on Branson's private Necker Island. The third annual Blockchain Summit will feature a host of cryptocurrency and blockchain industry ...

and more »


from blockchain - Google News

SEC Weighs In on ICO Tokens as Securities; Ether Still Labeled “Currency”

SEC vs ICO tokens

It was only a matter of time before the U.S. Securities and Exchange Commission (SEC) moved in on the “Wild West” world of Initial Coin Offerings (ICOs), which has sent the blockchain world reeling. Yesterday, it finally did with its announcement that virtual tokens like the ones sold by the DAO are securities and now subject to federal securities laws.

The SEC statements reads in part: “federal securities laws apply to those who offer and sell securities in the United States, regardless whether the issuing entity is a traditional company or a decentralized autonomous organization, regardless whether those securities are purchased using U.S. dollars or virtual currencies, and regardless whether they are distributed in certificated form or through distributed ledger technology.”

The SEC is cautioning investors not only to be aware of the risks but also to ensure that those looking to get involved do their own due diligence as well.

One important distinction that seems to have emerged in the report, however, is that while DAO tokens are securities, Ether itself is still in the clear.

The Report seems to distinguish between Ether, labeled a virtual currency, and DAO Tokens, labeled a security. Market participants may take comfort in this distinction, as it supports the view that not all blockchain tokens are securities under the U.S. Federal Securities Laws. - Devebois & Plimpton LLC

The announcement, nevertheless, is expected to have an impact on token sales. As a result of this recent development, it is important to note that any company looking to raise capital through ICOs in the U.S. will have to take this SEC decision into consideration.

On the legal side, Mark Radcliffe of DLA Piper told Bitcoin Magazine: “Those considering a token offering would be well served to reconsider their plans and ensure compliance in all of these areas, from tip to tail.”

Radcliffe said: “The SEC’s release is most notable on its survey of many of the corollary issues which can be triggered under the federal securities laws when a token is deemed a security, from registration or exemption, whether general solicitation is permissible, to crowdfunding, to after-market trading and even addressed compliance issues under the 1940 Act.”

What Is “The Howey Test”?

The Howey test is the leading definition of an investment contract, referring to the U.S. Supreme Court case SEC v. W.J. Howey Co. Under the Howey test, an investment contract is “a contract, transaction or scheme whereby a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party.”

According to Jaron Lukasiewicz, CEO of stealth blockchain project WORKFLOW and former investment banker, “The standard test is an investment in a business where the buyer has a reasonable expectation of profits based on the efforts of others. It should come as no surprise that the SEC found that buyers of the DAO Token purchased a security.”

He explained that the key feature of the DAO token was indeed an expectation of profit if the investments made by the DAO were successful, and so DAO tokens were expressly sold as an investment.  

Lukasiewicz added: “Unlike a token such as Ether, the DAO token had no other utility.  Many people in the industry at the time were concerned about the DAO for the reasons stated by SEC.”

Marco Santori, partner at Cooley LLP and legal ambassador for the Delaware Blockchain Initiative, shared an excellent summary of the report's key points on Twitter, touching chiefly on the distinction between tokens that are and are not securities.

santori screenshot

Arnold Spencer acts as general counsel for the Coinsource network of Bitcoin ATMs. He summed up the distinction in a succinct analogy:

If you buy an interest in a golf course to make money from the business, it is a financial investment and therefore a security. If you join a golf club to play golf, it is not a financial investment and not a security.

Important — but Not Surprising

Ron Chernesky, CEO of social trading platform investFeed, said that he welcomes the SEC announcement, although he also noted that “before yesterday’s announcement, it was common knowledge that ICOs have been enveloped in a regulatory [gray] area.”

It would appear that that gray area has now shrunk somewhat.

The post SEC Weighs In on ICO Tokens as Securities; Ether Still Labeled “Currency” appeared first on Bitcoin Magazine.



from Bitcoin Magazine

Using a blockchain doesn't exempt you from securities regulations - Ars Technica


Ars Technica

Using a blockchain doesn't exempt you from securities regulations
Ars Technica
The DAO, a blockchain-based organization created last year, was supposed to demonstrate the potential of Bitcoin competitor Ethereum. Investors pumped $150 million of virtual currency into the project. But then in June 2016, hackers found a bug in the ...
Chinese Blockchain Association Issues Protocol to Regulate ICOsCryptoCoinsNews
Spoiler Alert: Blockchain is About Far More Than Just CryptoFuturism
SEC to blockchain community: You are now regulatedVentureBeat
Fortune -CoinDesk -American Banker -SEC.gov
all 84 news articles »


from blockchain - Google News

The Blockchain Interface Company Riddle&Code, Together With Innogy Innovation Innovation Hub, Developed The ... - CoinDesk


The Blockchain Interface Company Riddle&Code, Together With Innogy Innovation Innovation Hub, Developed The ...
CoinDesk
Essen, Vienna - July 18th, 2017 - The Blockchain Interface Company RIDDLE&CODE has partnered on a Proof of Concept ("PoC") with innogy Innovation Hub to develop an innovative solution for giving objects a unique and immutable identity through the ...



from blockchain - Google News

This Chinese Company Is Trying To Build The World's Leading Blockchain Platform - Forbes


Forbes

This Chinese Company Is Trying To Build The World's Leading Blockchain Platform
Forbes
China is increasingly becoming a fintech Blockchain innovator, competing with other Blockchain platforms the world over for better security and easier usability. Originally developed for using Bitcoin, Blockchains now go beyond digital currencies ...



from blockchain - Google News

An Airline Just Started Using Ethereum Blockchain to Issue Tickets - Futurism


Futurism

An Airline Just Started Using Ethereum Blockchain to Issue Tickets
Futurism
Russian magazine Kommersant has reported that the airline S7 began selling tickets using an Ethereum blockchain on Monday. The country's largest private financial institution, Alfa-Bank, is supporting the move, which was made to simplify payments and ...

and more »


from blockchain - Google News

Four Visions for Scaling Bitcoin: A State of Digital Money Panel

Four Visions for Scaling Bitcoin: A State of Digital Money Panel

At the recent State of Digital Money event in Los Angeles, Bitcoin scaling was the topic of conversation for a panel consisting of Airbitz CEO Paul Puey, derivatives trader Tone Vays, Yours CEO Ryan X. Charles and Bitcoin Core contributor Eric Lombrozo. During the panel discussion, each participant was able to share his vision for how Bitcoin should be scaled to handle a much larger userbase.

Ciphrex CEO and Bitcoin Core Contributor Eric Lombrozo

For Lombrozo, scaling Bitcoin is about getting the greatest gains in terms of throughput increases while also limiting the amount of risk and security vulnerabilities involved in those improvements.

“Obviously, if you have just a few entities that are validating the transactions for everyone, then that creates a point of attack or a single point of failure,” said Lombrozo. “Part of the whole philosophy of Bitcoin is you should be able to validate your own transactions.”

Lombrozo added that scaling Bitcoin means users are able to validate their own transactions without necessarily being forced to validate everyone else’s transactions as well.

“That’s the trick,” said Lombrozo.

An example of this method of scaling Bitcoin is the Lightning Network, in addition to other Layer 2 protocols.

From Lombrozo’s perspective, using a blockchain for every transaction is like going to court every time a deal is made with a counterparty. The Lightning Network allows users to interact directly rather than dealing with the blockchain as a third party of sorts to process the transaction.

In the past, Joseph Poon, who is a co-author of the original Lightning Network white paper, has shared similar comments related to the use of Bitcoin’s underlying blockchain as a court for smart contracts.

“Instead of viewing [the blockchain] as simply a payment system, if you view it as a smart contracting system, which enables the blockchain to act as a dispute mediation system, viewing the blockchain as a judge is a lot more understandable and a lot more powerful,” said Poon at the 2016 MIT Bitcoin Expo.

Lombrozo added that second-layer protocols like the Lightning Network act as a sort of paper IOU to bitcoin’s gold — except in the case of the Lightning Network, the user knows they will always be able to redeem the paper for gold.

In addition to Layer 2 protocols, Lombrozo would also like to see different signature schemes implemented in Bitcoin to lower the resource requirements of operating a full node. Schnorr signatures are an example of such an improvement that has been in development for Bitcoin.

Another key point made by Lombrozo during the panel discussion was that different players in the Bitcoin ecosystem desire different features in the protocol; for example, long-term holders may not care as much about $10 on-chain transaction fees as those who have built businesses around the use of the blockchain for coffee purchases or other low-value transactions.

In summary, Lombrozo referred to a user’s ability to only need to validate their own transactions (while still remaining secure) as the “low-hanging fruit” of scaling Bitcoin.

Yours CEO Ryan X. Charles

While Charles claimed he was happy to see progress made on the eventual activation of Segregated Witness (SegWit) via the activation of BIP 91, he also added, “SegWit doesn’t go far enough.”

From Charles’s perspective, SegWit will not sufficiently lower on-chain transaction fees, which he sees as the key issue for users at this time. In his view, much lower on-chain transaction fees are needed for mainstream adoption of Bitcoin to occur.

According to Charles, the main disagreement between various parties when it comes to the best way to scale Bitcoin has to do with how much transactional activity should happen on the blockchain, as opposed to secondary layers of the network.

“I am very much in favor of radical increases to the block size,” said Charles.

Charles added that it would take 30 years to send every person in the world a bitcoin transaction with the current 1MB block size limit.

“That just doesn’t work from the point of view of mainstream adoption of bitcoin,” said Charles.

Charles also noted that the Lightning Network white paper stated that a 130MB block size limit would be necessary for mainstream adoption to be possible, even with various Layer 2 scaling options.

According to Charles, the key question to answer is: How does Bitcoin get from 1MB to 10GB blocks?

“Computers get faster and cheaper,” said Charles. “It doesn’t just have to be technical software and cryptographic optimizations.”

Derivatives Trader Tone Vays

When Vays spoke about his vision for scaling Bitcoin, he first noted that the digital cash system may not be able to do all of the things that were promised in the early days. He specifically mentioned privacy, security, instant transactions and cheap payments as examples of features that were promised by Bitcoin enthusiasts back in 2013.

“In reality, having all of those things at once is almost impossible,” said Vays. “There’s a chance Bitcoin can’t do all that.”

Vays reiterated Lombrozo’s point about different users wanting different features in Bitcoin. In his view, the censorship-resistant properties of the system should be viewed with the highest level of priority.

“The reality is a censorship-resistant payment method is way more important,” said Vays. “You have so many other ways to pay for your cup of coffee, but you don’t have a lot of ways to donate to Wikileaks. You don’t have a lot of ways to buy “other” things...”

Last year, Vays published a post on his blog where he examined some of these use cases involving censorship resistance.

Vays added that he trusts the current group of contributors to Bitcoin Core, the reference implementation of the Bitcoin protocol, to focus on this priority of censorship-resistant digital cash.

For Vays, the next area of focus for developers after the activation of SegWit should be privacy-focused improvements, such as MimbleWimble and Confidential Transactions.

Airbitz CEO Paul Puey

Before talking about anything else, Puey stated that he is very much for the activation of SegWit. However, he then shared his belief that much more on-chain capacity is needed on the Bitcoin network, as Charles had previously stated.

“We’re not going to be able to live with a 1MB block, and it was an arbitrary number,” said Puey.

Puey added that computers are now four to five times more powerful than when the block size limit was originally added to Bitcoin by the system’s creator. He also indicated that the correct “magical number” to define the block size limit is hard to figure out, which is why he believes the free market should decide.

“I don’t think the developers should make that decision,” said Puey.

Puey did not elaborate on how the free market would be able to make this decision. It’s unclear if he was talking about Bitcoin Unlimited’s concept of emergent consensus or simply users choosing between different blockchains with different block size limits.

The Airbitz CEO then prefaced the rest of his comments with the fact that he still has a tremendous amount of respect for the people who have been contributing to Bitcoin Core over the years as they’re trying to solve an incredibly hard problem.

Puey noted that he, as a developer, knows his limitations when it comes to developing a proper user experience for software applications.

“How many of you people want the developers designing the user experience of your protocol, your application [or] your website?” Puey asked the audience.

In Puey’s view, the idea that every Bitcoin user is going to run their own full node, even at a 1MB block size limit, creates a flawed user experience and will prevent the technology from being adopted by the masses.

“Every party in this debate wants decentralization, but they all define it differently,” Puey added.

While Puey suggested that more users running their own full nodes is helpful, he also shared his belief that having greater adoption of bitcoin as a currency would also help the system become more resilient to attackers.

“The more people that are using it, the more that the economy is dependent on it, the harder it is to stomp out a technology,” said Puey.

Puey concluded his response to the scaling question by stating that he was happy to see BIP 91 help end the stagnation in the adoption of protocol improvements.

The full panel discussion was streamed on Periscope by Civic Business Development Manager Vivek Kasarabada and can be viewed in its entirety here.

The post Four Visions for Scaling Bitcoin: A State of Digital Money Panel appeared first on Bitcoin Magazine.



from Bitcoin Magazine

Blockchain Startup Receives US Government Grant for Blockchain Key Management System - CoinTelegraph


CoinTelegraph

Blockchain Startup Receives US Government Grant for Blockchain Key Management System
CoinTelegraph
Blockchain technology startup Evernym has secured a grant worth $794,000 from the US Department of Homeland Security's (DHS) Small Business Innovation Program (SBIR) for the development of Blockchain key management solutions. The project is ...



from blockchain - Google News

Voices Is audit ready for blockchain? - Accounting Today


Accounting Today

Voices Is audit ready for blockchain?
Accounting Today
With capital markets and investors constantly demanding more information about businesses, it's no surprise that the audit profession is looking at blockchain with interest. It could fundamentally change the nature of auditing by revolutionizing supply ...



from blockchain - Google News

Leading IBM engineer to reveal blockchain application in energetics at Blockchain & Bitcoin Conference Stockholm

On September 7, Stockholm will host Sweden’s first major conference dedicated to cryptocurrencies and blockchain technologies: Blockchain & Bitcoin Conference Stockholm. The event is a part of the greatest network of events held by Smile-Expo in St. Petersburg, Moscow, Prague, Tallinn, and Kyiv.    Stockholm will bring together foreign experts and representatives of Swedish cryptocurrency community … Continue reading Leading IBM engineer to reveal blockchain application in energetics at Blockchain & Bitcoin Conference Stockholm

The post Leading IBM engineer to reveal blockchain application in energetics at Blockchain & Bitcoin Conference Stockholm appeared first on NEWSBTC.



from NEWSBTC