Category Archives: Blockchain Cryptocurrency

YouTube Crypto Purge Appears to Be a Simple Error Rather Than an Evil Powerplay

YouTube Crypto Purge Appears to Be a Simple Error Rather Than an Evil Powerplay

The crypto community has been gripped over the past several days with news of a potential anti-crypto crusade by video sharing platform YouTube, who has been removing hundreds of crypto-related videos from popular channels over the past week.

Now, an exclusive report from Decrypt elucidates that the recent purge of crypto related videos did not mark the start of a war against crypto and was simply a mistake that is in the process of being rectified.

No, YouTube is Not Out to Purge Crypto-Related Content

The recent content purge came about after multiple popular cryptocurrency YouTube channels saw a significant amount of their content removed from the platform.

For these YouTubers, the revenue they receive from these videos can comprise a large piece of their livelihood, so naturally it was a disturbing sight to see their videos being removed for violating the platform’s terms and services.

Interestingly, videos about blockchain and cryptocurrency from non-crypto centric channels – like CNBC and Business Insider – avoided the purge, with videos from cryptocurrency-focused channels being the only ones impacted.

This sparked a litany of theories from members of the cryptocurrency community as to why the platform may have taken such actions so suddenly, with some promoting the theory that it may signal that YouTube or their parent company – Google – are doing it in preparation of entering the blockchain industry themselves.

In spite of this, a recent exclusive report from Decrypt shows that the purge appears to simply be a mistake that the platform is currently in the process of rectifying.

“With the massive volume of videos on our site, sometimes we make the wrong call… When it’s brought to our attention that a video has been removed mistakenly, we act quickly to reinstate it,” a YouTube spokesperson told the outlet, further adding that they have not altered their policies and that all the removed videos have since been reinstated.

Although this imbroglio may have resulted in a positive outcome this time around, it does highlight the importance of bourgeoning decentralized platforms, as the centralization of platforms like YouTube can prove to be dangerous for content creators dealing in nascent technologies that are perceived by many as risky or scam-like.

Original article posted on the EthereumWorldNews.com site, by Cole Petersen.

Article re-posted on Markethive by Jeffrey Sloe

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Coinbase CEO Brian Armstrong Wins Patent For Transacting Bitcoin Via Email

Coinbase CEO Brian Armstrong Wins Patent For Transacting Bitcoin Via Email

By RTTNews Staff Writer | Published: 12/23/2019 9:46 AM ET

Brian Armstrong, CEO of US-based crypto exchange Coinbase, has been awarded the patent for a system and method for transacting Bitcoin or BTC via email to an email address owner.

The U.S. Patent and Trademark Office or USPTO officially granted the patent for sending cryptographic currency to an email address to Armstrong on December 17, nearly five years after he applied for it in March 2015.

According to the patented process, a bitcoin exchange allows for users to set prices that they are willing to sell or buy bitcoin and execute such trades. The instant exchange allows for merchants and customers to lock in a local currency price. No miner's fee is paid by a host computer system.

The patent refers to a system for processing a request to perform a Bitcoin transaction using a bitcoin address.

A hot wallet functionality is provided that transfers values of some Bitcoin addresses to a vault for purposes of security. A private key of a Bitcoin address of the vault is split and distributed to keep the vault secure.

For comments and feedback contact: editorial@rttnews.com

Article written by an RTT News Staff Writer, and posted on the RTT News.com website.

Article reposted on Markethive by Jeffrey Sloe

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Merry Christmas? Youtube Continues Cruel Crypto Crackdown

Merry Christmas? Youtube Continues Cruel Crypto Crackdown

If you’ve been on Crypto Twitter at all over the past 48 hours, you’ve likely heard the plight of many Youtubers covering the Bitcoin and cryptocurrency spaces. Countless influencers and content creators in the industry — of which many have tens of thousands of followers and subscribers apiece — have reported that a number of their videos covering developments in the cryptocurrency space have been taken down, with Youtube citing the existence of “harmful and dangerous” content.

Over the past few hours, more information about the context of Youtube’s sudden crackdown has been revealed. Apparently, a majority of the crypto-centric videos that have been taken down by Youtube were promoting “certain regulated goods and services” — a list that includes items like alcohol, explosives, human organs, nicotine, firearms, and much more.

This is notable as “cryptocurrency” is not mentioned on the list, though “counterfeit documents or currency” and “online gambling casinos” are. The latest strikes could imply that Google does not recognize digital assets as real money and that it sees exchanges and other Bitcoin services, many of which are promoted by the affected Youtubers, as “online gambling casinos” or sites that offer “regulated goods.”

What’s crazy about all this is that it comes on Christmas, when these content creators, some of which make a fair portion of their income off Youtube and other social platforms, should be out celebrating the holidays with their family and friends but are instead languishing about a potentially lost source of income on their go-to video platform.

Just look to this tweet from The Crypto Lark below, in which he wrote:

Nice Christmas present from Youtube, 37 videos pulled and a strike. Ouch.

All things considered, it should come as no surprise that the cryptocurrency community is outraged. Entirely outraged.

Mati Greenspan, the founder of QuantumEconomics, remarked that to protest “Google’s new, unexpected, and unexplained censorship of crypto content, I will be boycotting Youtube until further notice.” Others seem to be following Greenspan’s lead.

Ran NeuNer, a cryptocurrency and blockchain investor and host of CNBC’s “Crypto Trader” show, echoed the outrage, writing:

YouTube deleting all Crypto content is a MASSIVE blow to the industry. YouTube is the go to place for educational video and the first port of call for new people entering the eco system to learn the basics. As a community we should challenge this formally.

Youtube hasn’t commented on this recent debacle, nor can this writer find any content updates or guidelines that mention cryptocurrency or related technologies by name.

Original article posted on the EthereumWorldNews.com site, by Nick Chong.

Article re-posted on Markethive by Jeffrey Sloe

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Can Bitcoin BTC Price Rally 3400 in 36 Months? CNBC Analysts Break Down Prediction

Can Bitcoin (BTC) Price Rally 3,400% in 36 Months? CNBC Analysts Break Down Prediction

For years now, prominent investors in and out of the Bitcoin and cryptocurrency community have been making predictions, predictions about the crypto market’s future — often deemed uncertainty by many skeptics.

One of the most prominent of these predictions has been one from Tim Draper, one of Silicon Valley’s most prominent venture capitalists, having made early investments in companies from Skype and SpaceX to Tesla. Draper, notably, bought his first Bitcoin over five years ago, buying millions of dollars worth of the leading digital asset in an auction held by the U.S. government.

Draper, for over a year now, has been saying that the price of BTC will easily hit $250,000 — over 3,400% higher than the current price of $7,200 — by the end of 2022 or by early 2023.

Per previous reports from this very outlet, the legendary investor backed this prediction in a recent yahoo finance interview by reasoning that using fiat monies, which he calls “poor” (referring to their quality), are illogical, citing their controllability, lack of transparency, and subjectivity to political and social whims on the day-to-day. And as the American investor argues that most of the brightest developers, engineers, and academics are working on digital assets, Draper opines that there could be a large capital flight from fiat to crypto over time. He elaborates:

“My belief is that over some period of time, the cryptocurrencies will eclipse the fiat currencies. That would be a 1,000 times higher than what we have now.”

But do others agree with his assessment?

CNBC Assesses $250,000 by 2022 Bitcoin Sentiment

CNBC’s “Fast Money” segment, which has long hosted crypto investors and discussion surrounding the industry, recently broke down Draper’s $250,000 calling, in a seeming attempt to determine whether or not what the long-time venture capitalist’s prediction is at all feasible.

Interestingly, the consensus was a tentative yes. More on that now.

Brian Kelly, an investor that focuses on crypto assets and blockchain investments, noted that if you look at BTC’s long-term logarithmic growth channel, the upper bound of that channel, which the asset has been trading in for eight years now, is somewhere in the $200,000 range by 2022-2023. Considering the importance of this channel and the fact that Bitcoin has interacted with it for years implies that technically speaking, the prediction has a fair likelihood of becoming reality.

As for the fundamentals and the historical trends, the CNBC analysts also argued that the case is there for a $250,000 Bitcoin by 2022, looking to the fact that the cryptocurrency is known for its outsized volatility.

Original article posted on the EthereumWorldNews.com site, by Nick Chong.

Article re-posted on Markethive by Jeffrey Sloe

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UN Agency To Use Blockchain To Prevent Illegal Fees Charging

UN Agency To Use Blockchain To Prevent Illegal Fees Charging

By RTTNews Staff Writer | Published: 12/17/2019 9:31 AM ET

International Organization for Migration or IOM, the United Nations Migration Agency, decided to use blockchain technology to prevent the exploitation of migrant domestic workers in Hong Kong SAR, China.

The agency developed and launched a blockchain-based tool called IRIS-SAFER in partnership with blockchain solutions company Diginex. IRIS-SAFER is an acronym for the International Recruitment Integrity System (IRIS)- Self-Assessment for Ethical Recruitment (SAFER).

The tool is being initially designed for use by representatives from the about 1,500 Hong Kong-based migrant domestic worker recruitment agencies, as well as select associated agencies in worker-sending countries.

IOM will initially invite recruitment agencies to use the tool to assess the current level of adherence to global ethical recruitment principles as set forth by the IRIS Standard.

"Ethical recruitment practices are essential to improve protection of workers, employers and recruitment intermediaries," said Giuseppe Crocetti, Chief of Mission, IOM China.

The use of blockchain technology will strengthen data management and enforce data integrity, which allows for a higher level of transparency and visibility.

According to the Hong Kong Census and Statistics Department, there are almost 390,000 migrant domestic workers in Hong Kong, nearly 1 in 10 of all workers in the city, with almost 98 percent of these being women.

More than half or 56 percent of domestic migrant workers were charged illegal fees by recruitment agencies, a recent survey by the International Labor Organization (ILO) shows.

Hong Kong-based Diginex said the tool can help to eradicate these unethical practices of charging illegal fees . In Hong Kong, foreign domestic workers are forced to pay about HK$700,000,000 each year in placement/recruitment fees as they are some of the most economically vulnerable people.

Diginex and IOM plan to launch IRIS-SAFER to recruitment agencies in other jurisdictions globally after the successful roll-out of the tool in Hong Kong SAR and select countries of origin for migrant domestic workers.

For comments and feedback contact: editorial@rttnews.com

Article written by an RTT News Staff Writer, and posted on the RTT News.com website.

Article reposted on Markethive by Jeffrey Sloe

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Your Guide to Avoiding Bitcoin Fraud

Your Guide to Avoiding Bitcoin Fraud

“Bitcoin is a remarkable cryptographic achievement. The ability to create something which is not duplicable in the digital world has enormous value. The Bitcoin architecture, literally the ability to having these ledgers that can’t be replicated is an amazing advancement.” – Eric Schmidt, Executive Chairman of Google,March 2014.

With Bitcoin price increasing over the years and reaching billions of dollars in market capitalization, all kinds of people see its value and appeal. This brings out both the good and bad in human nature.

Unfortunately, with the bad comes scammers. The bottom line is scammers also want to profit somehow from Bitcoin, but through nefarious means. This typically involves targeting unprepared victims, who end up losing their Bitcoin as a result.

In this guide we will walk you through the most common Bitcoin scams. We’ll show you how to spot them, and make sure you don’t become the next victim.

Fake Bitcoin Exchanges

Fake Bitcoin Exchange

Often on social media you’ll see a link saying something like “Buy bitcoin for 5% under market value. Save big!” This is a marketing trick to get you to visit and use their fake exchange.

If you visit any exchange site the very first thing you want to do is make sure it’s HTTPS secured and not HTTP. This means that the web traffic is encrypted and secured; if it’s just HTTP without the “S” that is a big red flag and means stay away.

Another red flag to look out for are fake exchanges that offer selling Bitcoin for PayPal. On these sites you’ll see a web form to enter your PayPal email and amount to sell. After submitting, you will be presented with a QR code to send your bitcoin to. But the money never arrives.

Most of these fake exchanges are here one day and gone the next. You will see them pop up but will quickly disappear, and then re-emerge with a different domain name later.

To be sure you are going to a real Bitcoin exchange, visit our exchange portal on Bitcoin.com to ensure you aren’t being scammed.

Fake Bitcoin Wallets

Spotting fake Bitcoin wallets is a bit tougher, because wallets primarily are about storing bitcoin and not buying or selling it. It has less to do with money than it does with the software you may use. Typically, fake Bitcoin wallets are just scams for malware to infect your machine in order to steal your passwords or private keys.

Just like with fake Bitcoin exchange sites, you should trust your instincts and look for red flags. Does the wallet site use HTTPS? Is the name of the wallet site trying to resemble another reputable Bitcoin wallet by impersonating it? Outside of the obvious, it may be hard to tell if a wallet is fake. A good practice is to ask your peers if someone has used the wallet before. You can do this on the Bitcoin Forum or Bitcoin Reddit.

If the wallet is a downloadable client, another good practice is to check the site for malware. Sites like VirusTotal are a great resource for checking executables to see if they contain viruses.

To be sure you are going to a real Bitcoin wallet, visit our wallet portal on Bitcoin.com to ensure you aren’t being scammed.

Phishing Scams

This is a very common scam. Phishing is when someone tries to trick you into thinking they are a trusted company or website by having you visit a fake site.

Typically, phishers contact you via email or through a fake web advertisement. The end result is you go to their website by mistake and either get malware, or lose your bitcoin through a fake sale.

With emails you have to be careful to not take the bait. You may receive an email from a wallet or exchange you already use, either by coincidence or through past database hacks. Maybe hackers obtained your email address on the black market; for example from a Yahoo! or other service hack.

Best practice is to not click on any hyperlinks in an email or open attachments. Go directly to the website if you have to do business there. A common tactic is to make a hyperlink look real, but if you hover over it you will see the fake website URL. Always check the sender email to see where it’s coming from (although this is not 100% reliable as emails can be spoofed).

With fake web advertisements, you have to be careful on the site you are visiting. This usually happens when searching on the web for things like “blockchain.” The top result could actually be an advert via Google for example, but may end up being a fake Bitcoin wallet. Best practice is to not visit sponsored ad content in search results, and just manually type the real website address directly into your browser.

To be sure you are going to a real Bitcoin wallet, visit our wallet portal on Bitcoin.com to ensure you aren’t being scammed.

Ponzi Scams

Bitcoin Ponzi Scams

Ponzi scams are promises from websites that you will “double your bitcoin” overnight, or some similar outlandish claim. Ponzi sites may be harder to spot, but they’re easy to figure out once you understand this: the only way to double your money is to first send it to them.

Ponzi sites also typically have referral programs, so if you get others to sign up for the site by visiting your affiliate link, you may make a few cents. This is another red flag, as many times you will see on social media shared links with referrals within the URL. Usually it will look something like this (referral link is in bold): domain.com/ponzi/?ref=12345

If you’re unsure whether this Bitcoin site is a scam, visit our Scam thread on the Bitcoin Forum to see if others have used it before.

Cloud Mining Scams

This can be a bit tricky because not all cloud mining operations are scams. Some are completely legitimate, however many are scams, so it’s best to warn people (especially newcomers) to be careful when looking into cloud mining.

Cloud mining is shared mining hashpower, where people pool their funds together to rent Bitcoin mining machines. For legitimate operations, this works and can be profitable. For scams, returns may be low or non-existent. As we’ve established above, it’s best to trust your instincts and look for red flags.

Does the site use HTTPS? Did you find the site from a referral link on social media? Does the cloud mining operation not give any insight into what pool they use to mine, or let you select the pool you want to direct your hashrate to? These are just a few things to look for; you can read some other tips here.

If you’re unsure whether a certain Bitcoin site is a scam or not, visit our Bitcoin Mining Forum and ask someone for help and/or their opinion to ensure you aren’t being scammed. 

Original article posted on the Bitcoin.com site.

Article re-posted on Markethive by Jeffrey Sloe

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Pennsylvania Man Charged With Stealing Cryptos Through SIM Swapping

Pennsylvania Man Charged With Stealing Cryptos Through SIM Swapping

By RTTNews Staff Writer | Published: 12/16/2019 8:28 AM ET

A Pennsylvania man was charged by a federal grand jury for conspiring to commit wire fraud and extortion, according to a statement by the U.S. Department of Justice (DoJ). He engaged in a "SIM swapping" scheme to obtain cryptocurrencies and other money and property by fraud and extortion.

23-year-old Anthony Francis Faulk was indicted with one count of conspiracy to commit wire fraud and one count of interstate communications with intent to extort. He was arrested and released on a $250,000 bond.

The indictment also alleges that Faulk used the proceeds of the SIM swapping scheme to obtain real and personal property for his own use and benefit, including a house, a Ferrari and three other cars, jewelry, a Rolex watch, and royalty rights in twenty songs.

The property obtained with the proceeds of the SIM swapping scheme is subject to criminal forfeiture.

Faulk is charged for targeting crypto-related company executives and others who possibly held or invested in significant amounts of cryptocurrency through a SIM swapping scheme. They also allegedly extorted victims of the SIM swapping scheme.

"SIM swapping" or "SIM hijacking" can be done with little more than a persuasive plea for assistance, a willing telecommunications carrier representative, and an electronic impersonation of the victim.

Faulk and others used "fraud, deception, and social engineering techniques" to persuade telecom representatives to transfer or port cellphone numbers from the victims SIM cards to the conspirators. They gained control of the victims' cellphone numbers and used deceptive techniques to access email, electronic storage, other accounts as well as cryptocurrency accounts of victims.

If convicted, Faulk faces a sentence of up to 20 years in prison and a fine of $250,000 for the conspiracy to commit wire fraud charge. For the extortion charge, Faulk faces a maximum sentence of 2 years in prison and a fine in the amount of $250,000.

According to a report on krebsonsecurity.com, the U.S. State of California is said to be the hub of unauthorized "SIM swaps." The report says kids aged particularly between 19 and 22 are found to be stealing millions of dollars in cryptocurrencies.

SIM swapping attacks primarily target individuals who are visibly active in the cryptocurrency space, such as people working at cryptocurrency-focused companies, speakers at public conferences on blockchain and cryptocurrency technologies, and those openly talk on their crypto investments on social media.

For comments and feedback contact: editorial@rttnews.com

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Article written by an RTT News Staff Writer, and posted on the RTT News.com website.

Article reposted on Markethive by Jeffrey Sloe

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Boost for Ethereum: Financial Giant Fidelity May Support ETH in 2020

Boost for Ethereum: Financial Giant Fidelity May Support ETH in 2020

Financial Giant May Soon Support Ethereum

According to a recent report from The Block, which cited a podcast interview with Fidelity Investments’ crypto chief, Tom Jessop, Fidelity Digital Assets intends on adding support for Ethereum in 2020.

Jessop, a Wall Street veteran that is looking to bring his experience to the relatively-new crypto services branch of Fidelity (Fidelity being the financial services giant with over $2 trillion under management at this moment), claimed in the interview that his team has “done a lot of work on Ethereum.”

As to why Ethereum support has not been launched yet, Jessop cited a strong institutional appetite for Bitcoin, the cryptocurrency market’s de-facto king, and a relative lack of demand for the custody and/or trade execution for something like ETH or, say, Litecoin. The Fidelity executive elaborated:

How do I know that if I buy this thing, it’s gonna be around tomorrow? Like what indication of durability or longevity do I have based on the fact that the history of this asset is 10 years old?

Earlier this year, Jessop claimed that hard forks and consistent changes in the Ethereum protocol may delay Fidelity Digital Assets’ attempts to get support for ETH online.

These latest comments come hot on the heels of news that the New York State Department of Financial Services (NYDFS) granted Fidelity Digital Asset Services a trust license. In layman’s terms, this new license will give Fidelity’s cryptocurrency branch the permission to launch a cryptocurrency custody and trade execution platform for institutions and individual investors for New York residents — which is notable as this is where much of American wealth is managed and traded.

Why is Fidelity Important for Crypto?

So why is Fidelity so important for Bitcoin and the broader cryptocurrency space?

Well, it can act as an alternative on-ramp for fiat into the digital asset markets, replacing something like a Bitcoin ETF.

Speaking on a CNBC “Fast Money” segment earlier this year, Brian Kelly of BKCM argued that a Bitcoin ETF isn’t essential for continued development and growth in this budding space. While many may take this statement as blasphemous, Kelly went on to back up his comment, drawing attention to the fact that there are other up-and-coming on-ramps.

The industry investor looked to Fidelity and TD Ameritrade — two giants in the American finance realm — adding that “ultimately you’re going to be able to buy Bitcoin in a regular brokerage account, or it’s going to look like a regular brokerage account. So I’m less concerned that you need a bitcoin ETF at this point in time.”

Original article posted on the EthereumWorldNews.com site, by Nick Chong.

Article re-posted on Markethive by Jeffrey Sloe

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How Blockchain Is Changing Banking and Financial Services

How Blockchain Is Changing Banking and Financial Services

It won't just "disrupt," it will transform

BY JUSTIN PRITCHARD Updated December 02, 2019


Dong Wenjie / Getty Images

Blockchain technology makes transactions fast and easy, and it can do more than just support Bitcoin. Blockchain is already transforming payments, and you may see more mainstream banking services that rely on blockchain soon.

What Is Blockchain?

Blockchain is a technology that facilitates trust between trading partners. If you’re familiar with Bitcoin, blockchain is the underlying technology that makes it possible to transfer currency and have confidence that transactions are successfully completed. But banking and other industries are using blockchain (with or without Bitcoin) in a variety of ways.

A blockchain is a secure “ledger” or a list of transactions. The benefits of blockchain come from two key features:

Distributed

There are numerous copies of the ledger. A public blockchain, like the Bitcoin blockchain, gets published and copied in multiple places. New transactions get broadcast to a broad network of participants, who add those transactions to the ledger. Nobody controls the ledger, but the system is designed so that everybody’s ledger contains identical information.

Immutable

A blockchain should maintain an accurate history of transactions. Because there are multiple copies of the ledger, it’s hard to alter or delete transactions (or add new information that’s false). To do so, you’d need to change every copy of the ledger in every location. That would require successfully hacking thousands (or more) of computers simultaneously—which is believed to be impossible.

So, how will this affect you? Most people don’t care about the technical details—but you should expect a transformation in banking and other financial services.

Money Transfers

Sending money to another country is an area ripe for improvement, and banks are already using blockchain for remittances. Consumers and businesses transmit hundreds of billions of dollars internationally every year, and the process has traditionally been cumbersome and expensive.

Bitcoin provided an “alternative” way to move money, but mainstream banks and service providers are also using blockchain technology to improve remittances and minimize exposure to cryptocurrency. For example, several major banks have partnered with Ripple to facilitate cross-border payments using blockchain technology, and other service providers are busy developing solutions.

Blockchain-based transfers save banks time and money, but consumers can also benefit. For example, assume a worker in the U.S. wants to send funds to her home country. In the past, she’d have to travel to a money transfer office, wait in line for an agent, pay cash, and pay fees of 7 to 10 percent to complete a transfer. The recipient might follow a similar process. But with blockchain technology, both parties can complete an electronic transfer with mobile phones—and pay far less.

Inexpensive Direct Payments

When you send or receive a payment, the funds typically move through banks, credit card processing networks, and other intermediaries. Each step adds complexity, and every service provider expects to earn a fee for the part they play in your payment.

Merchants can benefit from blockchain technology in several ways:

Swipe fees

When customers pay with plastic, merchants pay processing fees, and those fees eat into profits. Less-expensive blockchain payment networks may be an option for some merchants. If nothing else, more competition should lower prices.

Insufficient funds

Customers who pay by check may bounce checks, causing losses and fees for merchants. Electronic payments from customer checking accounts may also fail. But blockchain-based payments can provide merchants with certainty within a few minutes (or less).

Individuals also enjoy receiving payments with confidence. Online “buyers” may try to scam you, but blockchain-based payments should be quick and irreversible. Plus, they’ll likely be easier and less expensive than bank products. For example, if you’re selling a high-priced item like a vehicle, it’s critical to receive payment before handing over the keys. The safest ways to get paid currently include cash, wire transfers, or cashier’s checks. But cash is dangerous, wire transfers are labor-intensive, and cashier’s checks can be faked.

Transaction Details

Banks can use blockchain for more than moving money. The technology is excellent for keeping track of transactions, and that may be useful in several areas.

Title details

Because ledgers are hard to tamper with, they can make it easier and more efficient to track ownership. Each transfer of ownership (as well as liens and other events) can go in the ledger, resulting in a trustworthy source of information about almost any type of property.

Smart Contracts

It may be possible to automate activities that previously added cost, complexity, and delays to transactions. One such method is with the creation of smart contracts. These computer protocol contracts can monitor when a buyer makes a payment, when a seller delivers on her end of the deal, and handle a variety of problems that may arise. Plus, they don’t take vacations or make mistakes—assuming they are programmed correctly. Smart contracts can be as simple as an indifferent third-party between a buyer and seller (like the escrow providers we know today), and they can get substantially more complicated. Combined with open banking, encrypted smart contracts could lead to faster, automated lending decisions in a marketplace of bidders.

Financial Inclusion

By keeping costs low and allowing startups to compete against big banks, blockchain, and other technologies can promote financial inclusion. Blockchain-based solutions may better serve those who avoid bank accounts because of high fees, minimum balance requirements, and lack of access. Instead of needing assets and regular income for banks, they need a mobile device. In situations where it’s traditionally hard to identify individuals, digital IDs can provide a large-scale solution.

Reduced Fraud

Blockchain technology resists hacking, DDOS attacks, and other forms of fraud. It can also help banks and others identify individuals quickly and accurately through a blockchain-enabled digital ID. With less fraud, the costs of doing business decrease, and presumably, the savings benefit everybody.

What We Don’t Know

Blockchain is still relatively new, although banks and other industries are already innovating with blockchain technology. At this point, the technology is probably ahead of regulations, and it’s not always clear what to expect in terms of protection, privacy, potential risks, and dispute resolution. Those issues can all be solved, but it’s critical to research and understand what problems may arise before using blockchain for significant transactions.

Original article written by Justin Pritchard, and posted on the TheBalance.com website.

Article reposted on Markethive by Jeffrey Sloe

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This Alleged Bitcoin Scam Looked a Lot Like a Pyramid Scheme

This Alleged Bitcoin Scam Looked a Lot Like a Pyramid Scheme

Five men face federal charges of bilking investors of $722 million by inviting them to buy shares in bitcoin mining pools.

Written by GREGORY BARBERBUSINESS – 12.10.2019 07:48 PM


In emails, the operators of BitClub Network allegedly referred to potential investors as “sheep.”
PHOTOGRAPH: ANDREY RUDAKOV/BLOOMBERG/GETTY IMAGES

The world of cryptocurrency has no shortage of imaginary investment products. Fake coins. Fake blockchain services. Fake cryptocurrency exchanges. Now five men behind a company called BitClub Network are accused of a $722 million scam that allegedly preyed on victims who thought they were investing in a pool of bitcoin mining equipment.

Federal prosecutors call the case a “high-tech” plot in the “complex world of cryptocurrency.” But it has all the hallmarks of a classic pyramid scheme, albeit with a crypto-centric conceit. Investors were invited to send BitClub Network cash, which would allow the company to buy mining equipment—machines that produce bitcoin through a process called hashing. When those machines were turned on, all would (in theory) enjoy the spoils. The company also allegedly gave rewards to existing investors in exchange for recruiting others to join. According to the complaint, the scheme began in April 2014 and continued until earlier this month.

Matthew Brent Goettsche, Jobadiah Sinclair Weeks, and Silviu Catalin Balaci are accused of conspiracy to commit wire fraud and conspiracy to offer and sell unregistered securities. A fourth defendant, Joseph Frank Abel, faces only the latter charge. Another unnamed defendant remains at large. Balaci’s name was redacted from one public version of the indictment, but appeared on another.

The scheme appears to have started as a relatively modest scam and spiraled dramatically in ambition. Internal messages between the conspirators give the impression of growing glee at the ease of taking advantage of investors, referring to “building this whole model on the backs of idiots.” The men allegedly described their victims as “dumb” investors and “sheep.”

“They were not wrong,” Emin Gun Sirer, the CEO of blockchain startup Ava Labs, quipped on Twitter.

In October 2014, a few months after BitClub Network was founded, Goettsche allegedly posted about the need to “fak[e] it for the first 30 days while we get going,” instructing a co-conspirator to do some “magic” on the company’s revenue numbers. They allegedly agreed on a method of cooking the numbers that would include inconsistencies to make sure they appeared real. The tricks swiftly became more daring. Later, Goettsche allegedly suggested the company “bump up the daily mining earnings starting today by 60%.”

“That is not sustainable, that is ponzi teritori [sic] and fast cash-out ponzi . . . but sure,” Balaci responded, according to messages included in the indictment. A September 2017 email from Goettsche allegedly suggested the company “[d]rop mining earnings significantly starting now” so that he could “retire RAF!!! (rich as f&*#).”

The defendants also allegedly sold shares of the company in violation of securities law, traveling around the world with marketing materials that touted the company as “transparent” and “too big to fail.” (The BitClub website now has a disclaimer saying investments are not available to investors in the US or the Philippines.) At one point, one of the defendants appeared to express remorse, referring to selling shares in BitClub without using the money to purchase mining equipment as “not right.”

The identities of the alleged victims are unclear, but there are hints in still-online videos and advertisements that the company had wide reach. In one ad, appearing on the website of Ben Franklin Technology Partners, a nonprofit investment firm affiliated with the Pennsylvania Department of Community and Economic Development, a company calling itself BitClub Network promotes (comment added: page has recently been taken down) “Founder” status for people who agree to purchase shares in four purported mining pools. The going rate was $1,000 per “GPU share,” a unit of measure that isn’t illuminated in the marketing materials. (Ben Franklin did not respond to an after-hours request for comment).

In 2018, a large number of Facebook posts about BitClub Network caught the eye of Japhet Mesa in Zambia. In a Medium post, he described what he saw as signs of a scam. Despite BitClub’s claims of radical transparency, the location of the purported mining rigs appeared to be a mystery, and the individuals behind the company were hard to identify. “Going by the hype around BCN, I was amazed to see the number of people getting into it,” he wrote at the time. “This could be seen by the number of people posting about it on social media, facebook especially.”

Facebook pages based around BitClub Network communities in countries including Malaysia and South Africa remain active, with tens of thousands of members.

The crypto world is rife with scams. The grift reached a fever pitch in 2017, when bitcoin prices spiked and scammers lured victims to invest millions in cryptocoins or blockchain-based products that would never come to exist. Schemes around participation in mining pools are also popular to scammers who sell customers on the narrative of participating in business ventures that effectively amount to printing money. That’s become all the more tantalizing now that mining is mostly out of reach for many stay-at-home miners. (The selling point is that large mining “pools” enjoy greater efficiencies—and thus returns.) In January, a man in Hong Kong was accused of a similar mining pool scam that allegedly included an advertising stunt that involved throwing money off of a skyscraper.

The wire fraud charges carry a maximum of 20 years in prison, while the securities violation allows five. The defendants’ lawyers could not immediately be reached for comment.

The original article written by Gregory Barberand posted on Wired.com.

Article reposted on Markethive by Jeffrey Sloe

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