Amid Bitcoin Trading Resurgence,
Chinese Miners Shut Down Without Warning

    

A strange phenomenon is unfolding in China

as Bitcoin miners mysteriously close down or relocate their operations. Mines in the country’s Sichuan province were “reluctant” to discuss the reasons for withdrawal, major news resource People.cn reports. Bitcoin has recently continued its expanding price as Chinese exchanges get the green light to allow Bitcoin withdrawals. As traders delight in the new possibilities for sanctioned exchange use, however, a lack of corresponding regulation for miners is causing problems.

“A local official said the closure of the Bajiaoxi Mining Company aims at cracking down on illegal cash operations and on controlling systemic risks,” People reports, while no party was directly cited giving an explanation for the upset. Sichuan’s hydroelectric power is among the world’s cheapest, but the departure of miners is set to cost one power station $147,000 per month in lost billing. At a time when Bitcoin fees are higher than ever, the effect on miners themselves is also significant. “The southwestern region has abundant hydropower resources,” an “insider” source told fellow publication YiCai Global. “So electricity costs about half the price during the wet season. It’s hard to imagine why any mine would want to relocate now.”

Chuck Reynolds
Contributor
Please click either Link to Learn more about – TCC-Bitcoin.

Alan Zibluk Markethive Founding Member

    

A Greek lawyer has made the Financial Times’ list

of top legal innovators in Europe for his use of Bitcoin during the country’s financial

crisis.

"Panos Giannissis came second on a list of eight finalists shortlisted by the publication, which praised his use of the virtual currency when capital controls appeared in Greece two years ago."

“When capital controls were imposed during the Greek financial crisis last year, Panos Giannissis helped clients to stay in business by converting some of their working capital to Bitcoin, the virtual currency,” it writes. “He also led the development and implementation of the information systems at his firm.”

Giannissis’ triumph is conspicuous for mainstream press’ continued treatment of Bitcoin as a bonafide “innovation.” “…He negotiated a deal with his clients’ suppliers from abroad to accept Bitcoin as collateral to back importation of supplies in case his clients would not be able to make payments in fiat money,” an accompanying press release further explains.

“After the Capital Controls were imposed, the deal was activated and his clients continued to receive their supplies as usually, while their suppliers were covered by the Bitcoin collateral.” The broader international media tone has shifted away from Bitcoin as a highly volatile, insincere investment towards one full of potential with valid use cases. As Cointelegraph reported earlier this week, however, a lot of the latest supportive comments appear tied solely to Bitcoin’s price.

Chuck Reynolds
Contributor
Please click either Link to Learn more about – TCC-Bitcoin.

Alan Zibluk Markethive Founding Member

    

Sberbank CEO Herman Gref has “agreed” on the development of a Russian national cryptocurrency

with the country’s central bank. Sberbank is Russia’s major state-controlled bank. In unofficial reports from local news aggregators, the so-called “Russian Bitcoin” will use Sberbank as its base and will be “the only cryptocurrency freely available for sale and purchase” in the country. “All other [cryptocurrencies] will only be available via exchanges or trading platforms,” the Telegram news channel DeСenter reports Friday.

The news comes amid the ongoing economic forum in St. Petersburg, where the central bank deputy Olga Skorobogatova announced work had “already begun” on developing the national cryptocurrency. Skorobogatova had previously outlined plans to regulate Bitcoin and its like in 2018, on the basis that an outright ban was no longer feasible. On the topic of Blockchain, she told forum members that it “is without a doubt necessary to buy into” such “revolutionary technology,” yet understanding the associated risks was essential.

Fully-controlled integration would require “ seven to 10 years,” she added and continued: “In the coming years we will be concentrating on digital letters of credit, custodian accounting and digital bank guarantees using the Blockchain.” Gref had also been encouraging on Blockchain, estimating initial implementations by 2019. “Two to two-and-a-half years is the timeframe in which we could be talking about seeing Blockchain technology commercially operating,” he said in February.

Chuck Reynolds
Contributor
Please click either Link to Learn more about – TCC-Bitcoin.

Alan Zibluk Markethive Founding Member

Bitcoin Scaling:
Jeff Garzik AsicBoost Comments
Lead to Frustration

    

Bitcoin Core developer

Jeff Garzik has sparked contention with a post asking if further measures were needed to prevent covert AsicBoost. Addressing the work group (WG) on Github, Garzik put forward a selection of next steps aimed at “testing protocol/software changes that ban/disable/render ineffective this hardware optimization.” However, fellow contributor Greg Maxwell responded accusing Garzik of attempting to allow AsicBoost to, in fact, continue under his “modified version” of Segregated Witness with a hard fork.

Maxwell wrote:

“So to be clear about what you've written between the lines: you have decided that impeding covert asicboost would be a violation of the "SegWit2x charter" and so you will assure that covert asicboost continues to function in your modified version of segwit and HF as people have been alleging you would do? This will require further departure and incompatibility with the segwit proposal.”

Infighting among Core members has continued on the topic of Bitcoin’s future following Barry Silbert’s attempt to ratify an agreement which would see SegWit introduction in September followed by a cooling-off period for a block size increase to 2 MB. Reactions have been mixed, while practicality problems on the Bitcoin network are resulting in greater user calls than ever to initiate a binding solution. Garzik, meanwhile, faced pressure to state whether he intends to have AsicBoost disabled. “Anything that was not discussed is, by definition, A New Issue To Raise And Discuss. Which is what was done here,” he wrote.

Chuck Reynolds
Contributor
Please click either Link to Learn more about – TCC-Bitcoin.

Alan Zibluk Markethive Founding Member

    

A New Zealand lawyer has called suspected pyramid scheme

We Grow Bitcoins a “simple scam” after a news investigation. In an article by local platform Newshub, consumer law specialist Prajna Moodley concluded that investors funneling money into the scheme, which promises 62 BTC ($148,300) monthly returns, would never see their cash again.

“I would go as so far as to say it's a simple scam, from what I can work this involves people investing money and never hearing from the company again," she told the publication. The investigation focuses on the story of a New Zealand investor by the name of Daniel Tepania, who sent the so-called “crowdfunding community” the required NZ$30 minimum entry fee and is awaiting payouts. "It's only been here about a month so I thought I would give it a go, sounded quite good," he told Newshub.

New Zealand’s Commerce Commission pointed journalists to its legislation on pyramid schemes when approached about We Grow Bitcoins, such schemes being illegal under local law. “WeGrowBitcoins is a member to member donation platform,” the website states. “Members pay a monthly subscription to have access to the platform. Platform access allows members to receive donations directly into their bitcoin wallet from other members.” Cointelegraph would like to remind readers that investing in projects purporting to deliver unproven profits in return for direct payment should be avoided.

Chuck Reynolds
Contributor
Please click either Link to Learn more about – TCC-Bitcoin.

Alan Zibluk Markethive Founding Member

Walmart Wants to Track Delivery Drones With Blockchain Tech

Retail giant Walmart is seeking to patent a system

that uses blockchain technology to track packages delivered by unmanned drones. The US Patent and Trademark Office (USPTO) published the application, innocuously titled "Unmanned Aerial Delivery to Secure Location", on 25th May, and while that title may not give away much of Walmart's plans, the application itself reveals further details. As outlined, the retailer is looking at blockchain tech as a way to track shipments that involve flying drones.

The patent application explains:

"In some embodiments, the delivery box may also include a delivery encryption system comprising a blockchain for package tracking and authentication. Package tracking by blockchain may include elements including but not limited to location, supply chain transition, authentication of the courier and customer, ambient temperature of the container, temperature of the product if available, acceptable thresholds for ambient temperature of the product, package contents placed in the container system (products & goods), or a combination thereof."

It's a notable release from the global retailer, which has revealed some of its work with blockchain in the past. For example, last October, Walmart announced that it was working with IBM to develop a supply chain solution focused on China’s pork market, the largest in the world.

At the time, the retailer indicated that it was looking to apply the tech to other supply chains. And while it provided no hint that it was looking at blockchain as an underlying mechanism for aerial drones, Walmart told CoinDesk that it wanted to leverage blockchain to facilitate "fresher and faster deliveries". The application also details how the tech could be used to establish identity within the package system. "Authentication and access may be restricted to specific blockchain keys to access the contents of a parcel's payload, and may include specific times and locations," the authors write. "Access to the contents may be determined at the scheduling and purchase of a delivery or products."

Chuck Reynolds
Contributor
Please click either Link to Learn more about – TCC-Bitcoin.

Alan Zibluk Markethive Founding Member

The recent ransomware saga is a potent reminder

of just how vulnerable our information and data is to cyber-threats. But it’s not just our information that’s vulnerable; these threats extend into the physical world of electricity as well. In fact, today’s electrical grid is incredibly insecure against cybersecurity threats; for example, the massive 2015 cyberattack on the Ukranian power grid that left 230,000 people in the dark and the intrinsic level of insecurity presented by smart meters used all over the world. And with billions of energy-using, Internet-connected devices expected to come online over the next decade (PDF), the grid is about to experience a several-orders-of-magnitude increase in the number of vulnerabilities to

cyber-threats.

As … billions of energy-using devices are integrated into the electricity system, malicious actors will see the potential to exploit these systems and attempt to usurp this new reality.

Fortunately, blockchain technology is inherently robust against cyber-threats, and many energy companies are considering how blockchains may bolster the grid’s cybersecurity. This is because blockchains are built for:

• Tamperproofing data (PDF): 
  Blockchains make it very difficult to change data after it has been written. This eliminates a number of risks, including man-in-the-middle attacks, in which a hacker modifies data that’s en route to its destination. With a proper blockchain implementation, all computation is "hashed" and made tamperproof at the point of origin, so there is no risk of data being modified while in transit.
• Disintermediation (PDF): 
  With blockchains, intermediaries (escrow corporations) often are no longer necessary, significantly reducing transaction costs.
• Complete data availability (PDF): 
  Blockchains can store data in a decentralized fashion across many nodes. With this architecture, even if some nodes or servers are compromised, users still can access a complete dataset.
• Redundancy (PDF): 
  Blockchains operate without a central point of failure, so reliability through redundancy is intrinsic to this architecture.
• Privacy and control: 
  Users of a blockchain can choose which data to make immutably transparent and which data to keep encrypted so only the intended recipients can view the contents.
• Outsourcing computation (PDF): 
  Encrypted data can be sent for processing to a third party, without the contents of the data being revealed.

As the world of energy becomes more digitized and decentralized, the need for solid defense against cybersecurity threats increases drastically. When a blockchain is implemented properly, it offers a strong defense against external and internal threats by mitigating internet-connected and data communications vulnerabilities, and increasing data confidentiality and privacy.

Mitigating vulnerabilities

Internet-connected energy-using devices have the most room for improvement when it comes to cybersecurity. Between January and April, the research found that over 2 million Internet of Things (IoT) devices in homes were hacked into and rendered useless (bricked). This attack was to protest manufacturers’ poor cybersecurity policies for the devices, chiefly, thousands of devices set by default to use basic login and authentication credentials (username=user and password=password). In this case, hackers could have been much more malicious than simply bricking devices, but they wanted to prove their point: Unsecured IoT devices are unsafe, and should not be allowed to operate in a real-world environment where people’s lives and property are at risk.

Blockchain technology and those working on making it more usable for everyone are paving the way toward a new user-authentication paradigm. The current system of username/password combinations has been obsolete for many years. A much more secure mode of authentication is that of the public–private key pair (also called public key cryptography), the default in systems such as Bitcoin and Ethereum. As these blockchain implementations become more user-friendly, we will see a natural evolution of all login systems toward this more modern and secure method.

With a properly integrated cryptographic key login system for blockchain-based applications, IoT device owners will bear a significantly reduced risk of loss of power, theft of data and threats to privacy. What's more, integrating pricing and settlement on wholesale electricity markets into a secure blockchain significantly minimizes the risk of false data injection and pricing manipulation. This is largely because of the tamperproof characteristic of blockchains, which ensures immutability of a given dataset or series of communications between transacting parties.

The blockchain is also relevant for addressing data privacy and security issues. As more data is collected and transported over the internet, the risk of data exploitation and breach increases, as evidenced by the release of confidential information from hacks of LinkedIn, Yahoo, Target and other large organizations. Blockchains allow for the encrypted transportation of private data, ensuring that data is readable only by the intended recipient.

Introducing a new risk: Key mismanagement

Blockchains are great at mitigating several cybersecurity risks, but they also introduce a new risk that is often overlooked: key mismanagement. Key management is the secure storage of digital keys in a fashion that prevents unauthorized access — something of significance for distributed energy resources, which eventually will be connected to the web and authenticated mostly through asymmetric cryptography (the method used for all blockchain-based transaction and authentication). Many early adopters of blockchain technology that don’t have a background in IT have lost their private keys, rendering their blockchain assets or devices inaccessible.

However, key management is getting some much-needed attention, and innovators are creating new ways to store and recover private keys securely. One innovative way to tackle this problem is to integrate key pairs in actual, physical devices (think key fobs for your car) and use them to activate devices. This minimizes, or in some implementations renders impossible, the risk of hackers accessing private keys that confirm the identity and authority of a signing entity. Keys that exist on a personal device enforce secure signing on, for example, an energy-using internet-connected device (an electric vehicle). For a malicious actor, if all signing must be on a device, then the physical device must be compromised in a way that allows a hacker to remotely execute commands on the device instead of just reading data, which is much more difficult for the hacker and therefore a more secure implementation.

As digitized and distributed systems in energy become more common and billions of energy-using devices are integrated into the electricity system, malicious actors will see the potential to exploit these systems and attempt to usurp this new reality. Therefore, it is paramount that we ditch the "build-then-patch" approach, and build systems integrated with holistic security. Fortunately, much of this security is inherent in a properly implemented blockchain.

Chuck Reynolds
Contributor
Please click either Link to Learn more about – TCC-Bitcoin.

Alan Zibluk Markethive Founding Member

A state-owned development bank in Russia

has revealed its plans for launching products built around blockchain. Vnesheconombank, an institution backed by the Russian government, is focusing its efforts on the areas of project management and supply chain finance, according to a report by Sputnik International. The publication quoted Vnesheconombank's chairman, Sergey Gorkov, who appeared this week at the St Petersburg International Economic Forum.

What they're doing: 
Gorkov's comments, as quoted, reveal a kind of two-prong approach: developing institutional knowledge and pursuing applications — trade finance in particular — that have captured the attention of a wide range of financial firms worldwide.

Here's how Gorkov framed the bank's project management initiative, according to Sputnik:

"When we started to think about how to manage projects efficiently, we realized that there is no platform. Everything that we had became obsolete. We realized that the blockchain is a good fundamental and qualitative platform for the future."

He said that the bank had since pursued a pilot project centered around the use case, with further iterations to follow. "We are launching the first prototype in terms of project management this fall," he told the publication.

Why it matters: 
That a state-backed bank in Russia is moving to launch services around the tech is a notable one — but perhaps not an altogether surprising one given the pace of blockchain development in the country's finance sector.

The unveiling comes months after Russia's prime minister, Dmitry Medvedev, called for more research into the tech by a pair of government agencies. Government officials also said earlier this year that they expect to develop blockchain-specific regulations, looking to an introduction by 2019. That work comes as Russia's central bank drafts new rules around bitcoin and digital currencies, with an eye to regulate them as kinds of digital goods.

Chuck Reynolds
Contributor
Please click either Link to Learn more about – TCC-Bitcoin.

Alan Zibluk Markethive Founding Member

Blockchain consortium R3 raises
$107 million

People may well remember 2017 as the year that blockchain broke.

After years of development and flickering just outside of mainstream consciousness and acceptance, record high prices for the most popular blockchain-based cryptocurrencies Bitcoin and newcomer Ethereum and an embrace of the technology’s core principles by some of the world’s largest institutions may mean that blockchain technology is ready for its close up. Nothing illustrates this more clearly than the just-announced $107 million financing for R3, the blockchain consortium that includes some of the largest financial services firms and technology companies in the world.

Leading investors included SBI Group, Bank of America Merrill Lynch, HSBC, Intel and Temasek, the company said in a statement. R3 represents the largest consortium of global financial institutions working on developing commercial applications for the distributed ledger technology that’s at the heart of blockchain technology. In addition to the big names that committed the most capital, R3 pulled in additional commitments from ING, Banco Bradesco, Itaü Unibanco, Natixis, Barclays, UBS and Wells Fargo.

R3, which opened the first tranches of the company’s planned $200 million financing exclusively to members of the consortium, is one standard-bearer for the mainstreaming of blockchain technology. Indeed, the company already counts among its customers the government of Singapore, the Bank of Canada and other national financial institutions. The company said it will use the funds to accelerate technology development and grow strategic partnerships for project deployment. R3 has its own proprietary ledger that can be used to develop applications, and it also supports an infrastructure network for financial services firms and technology companies to build their own ledger-based applications and services.

“While still in its infancy stages, the emergence of distributed ledger technology comes at a time when the financial services industry is poised to further embrace technological change and efficiencies,” said C. Thomas Richardson, the managing director and head of market structure and electronic trading services at Wells Fargo Securities, in a statement.  That sentiment was echoed by other financial services executives whose firms were members of the R3 consortium. “Innovation in digital technologies is reshaping the banking industry, and this investment is reflective of our belief that distributed ledger technology and smart contracts have the potential to significantly enhance capital markets infrastructure. R3’s collaborative approach is key to the progress of this technology,” said Andrew Challis, managing director of strategic investments at Barclays.

Not all big banks and financial services firms have embraced R3. Goldman Sachs and Santander both dropped out of the consortium, perhaps figuring they’d be better off going their own way. Where R3 has really shined has been in getting governments comfortable blockchain-based applications. Their approach of enlisting banks and financial services companies for projects is light years from the more subversive mindset of some of the developers of the original and the largest blockchain protocol, Bitcoin.

As some investors and entrepreneurs see it, there’s room in the market for both the private blockchains developed by communities around Bitcoin and Ethereum, and the sanctioned corporate ledgers that companies like R3 are developing. For now, the technology that R3 is developing is focused on business applications like verifying transactions between banks, or automating the things like the establishment of the London Interbank Offer Rates. In the future, the company’s technologies could touch consumers more directly — through the creation of a digital fiat currency. While that may be somewhere far off down the horizon, with the company’s connections to the banking industry and to national governments, it’s not beyond the pale.

Chuck Reynolds
Contributor
Please click either Link to Learn more about – TCC-Bitcoin.

Alan Zibluk Markethive Founding Member