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Garzik Forks UnitedBitcoin Away from "Maximalists" to Support Altcoin Communities

Thu, 12/14/2017 - 16:57

A new project called UnitedBitcoin (warning: the site autoplays audio) promises to add smart contract features using the UTXO model, support for the lightning network and SegWit, and eight-megabyte blocks. Headed up by Jeff Garzik, the lead developer behind the failed SegWit2x hard fork, along with Matthew Roszak and SongXiu Hua, this UnitedBitcoin (UB) hard fork will offer replay protection to prevent people from accidentally spending their coins on both the Bitcoin and the UnitedBitcoin blockchains.

Garzik told Bitcoin Magazine that “10% of the total worldwide SHA-256 hash power” has moved to the new UB network, with much of the support coming from China and older mining equipment that was no longer profitable due to the escalating difficulty in mining bitcoin. He noted that UB is already supported on the ZB and EXX exchanges.

The UB white paper outlines how lost bitcoins have created deflationary pressure that has pushed the price up. Because those bitcoins are out of circulation, the supply is further decreased. One of the issues that UB seeks to address is to find a purpose both for those lost bitcoins and for “inactive” wallets by creating a stable cryptocurrency linked to their addresses.

All active Bitcoin addresses will receive the same balance on the UB chain, much like previous forks. The balances of UB on inactive addresses, however, will be confiscated by the UB Foundation and used to “serve the community.”

Inactive addresses are defined in the white paper as “addresses without activity since block height #494000 (November 11, 2017) and as a result didn’t automatically receive UBTC during phase 1 of the asset allocation procedure.”

UB does not distinguish between an “inactive” address and one which is simply being used by a long-time "hodler."

“There is no difference. An inactive account is an inactive account,” said Garzik. “Like during [the] Ethereum new coin creation, you had to take a proactive step, otherwise you got zero [ether]. This is normal for new token creation — new chain, new ERC20, but different from all other Bitcoin Forks. We are trying to do something new and different.”

Anyone with a prior balance of 0.01 BTC in an “inactive” address at the time of the November 11 fork can still get UB tokens, so long as they are willing to take such a “proactive step”: that is, they make at least one transfer to their own Bitcoin address between Block 498,777 and Block 501,878 (December 12, 2017, to 12:00 GMT on January 3, 2018).

Only the original address can make the transfer to itself, and the receiving address must be used as one of the sending (input) addresses.

One privacy issue to consider is that in order to “proactively” claim BU tokens, the protocol forces users to reuse their Bitcoin addresses; this action puts privacy at risk and, unless it is done carefully, may link many of the users’ coins together.

It's a gold mine for blockchain deanonymization, merging up UTXOs and reusing addresses. Can't help but think such an artificial qualification is deliberate.

— Johnathan Corgan (@jmcorgan) December 13, 2017

User privacy protection is not the only part of the protocol that is drawing criticism, however.

“The code contains a god mode; it’s literally called that,” Blockchain developer Sjors Provoost said to Bitcoin Magazine. He said that it appears as if this “god mode” will create a multisignature address that belongs to a (yet-to-be-defined) UnitedBitcoin Foundation.

“Unlike previous airdrops, the initial coin distribution is not determined by a consensus rule,” he added. “This means that even if you were to run the full UB node software (which you should not), you will have no way of knowing for sure how many coins you get. Conversely, if you already had bitcoin, you won’t know how many of ‘your’ coins will be confiscated. You simply have to trust their promise to take and redistribute coins as their marketing promises.”

According to Provoost, the new consensus rule allows the owner of this foundation address to spend any UTXO they want. “These confiscations will be included in holy blocks, which can be created during the first 500 blocks after the fork. This is how they implement the redistribution as I just described, but they can do much more.”

Furthermore, Provoost is concerned about the quality of the code itself. “Garzik’s previous project SegWit2x tried to keep its changes relative to Core to a bare minimum. Although at the time of the planned fork their code base was about a year behind Bitcoin Core, it didn’t introduce many changes,” he pointed out.

“UnitedBitcoin on the other hand has introduced far more changes, making the task of tracking Bitcoin Core far more difficult. It’s not as many changes as Bitcoin Unlimited and Bitcoin Cash, and the problem is somewhat mitigated by them sunsetting the more complicated consensus changes like god mode. However, even the small change in SegWit2x had a widely publicized serious bug in it and there are rumors of more.”

What Happens to Those “Reclaimed” Tokens?

Garzik has plans to “build a better Tether” by using the UB reserve, funded by coins reclaimed from “inactive” addresses. According to the project, 70 percent of confiscated UB coins will be held as collateral to issue stable tokens pegged to a fiat currency.

“The UB reserve can be used as a backing asset for a stable, non-volatile currency,” said Garzik. “This is auditable and transparent and on the blockchain. It will be over-collateralized, 200–300% to maintain the stability even in the face of a volatile price of the reserve.”

The remaining 30 percent of the confiscated coins will support another new feature: owners of QTUM, H-shares and ether will receive a share of the remaining redistributed UB.  

UB is experimenting with a new model: engage multiple communities — ETH, Qtum — rather than following the tired model of rewarding Bitcoin maximalists with a coin they dislike and will just dump on day 1.

According to Garzik, the specific claim process for the redistribution of UB has yet to be determined. “The UB board is still being put in place — things are moving very fast — and this will include more specifics on governance and community allocations.”

The scheduled timeline of what has been released and what is coming breaks down as follows:

December 12, 2017:

Fork of Bitcoin to UnitedBitcoin (at block height #498,777) with support for:

  • Increased block size to 8 MB

  • SegWit support

  • Replay Protection

  • Asset Allocation

January 3, 2018:
  • End of Asset Allocation phase #2

  • Pegged currency based on color currency

February 28, 2018:
  • Launch of smart contract support

April 28, 2018:
  • Launch of lightning network support



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South Korea Moves to Regulate Domestic Bitcoin Trading, Exchanges

Thu, 12/14/2017 - 14:15

Since late November 2017, South Korea has looked to regulate cryptocurrency trading in domestic exchanges, including Bithumb, Coinone and Korbit,  The Korea Herald reports. Now, trying to tame the wave of wild cryptocurrency speculation in the country, South Korea is imposing trade bans for minors and looking for ways to impose taxes on investment returns.

South Korea is the world’s third largest market in bitcoin trading, after Japan and the U.S., and the largest exchange market for ether, accounting for more than 33 percent of its market share, according to a recent MIT Technology Review report. The country is also home to two of the top 15 global digital-currency exchanges (Bithumb and Coinone) and believed to have about one million registered daily traders in virtual currencies, which is equivalent to about one out of every 50 citizens.

This is worrying the South Korean government. In September 2017, the country’s Financial Services Commission (FSC) ordered a ban on Initial Coin Offerings (ICOs). In November 2017, the head of South Korea’s Financial Supervisory Service said that the agency was monitoring cryptocurrency trading inside the country, and the country’s National Tax Agency revealed that it was considering a value-added tax, a capital gains tax or both on cryptocurrency trades. If the plan is implemented, South Korea will become one of the few countries to tax cryptocurrency-to-cash exchanges.

The government’s concern is also motivated by the risk of cyberattacks from the country’s rogue neighbor, North Korea. According to South Korea’s National Police Agency, North Korean hackers could be targeting South Korean bitcoin exchanges.

With these newest measures, North Korean banks that offer accounts for cryptocurrency trading will have to verify the identification of new account holders and prohibit minors from opening accounts. Woori Bank and Korea Development Bank will shut down virtual accounts offered to cryptocurrency exchanges before year-end, according to the banks.

The regulators will also bar financial institutions from investing in or obtaining cryptocurrencies, and is considering ways to oblige cryptocurrency exchange operators to verify users’ real names, strengthen storage security of encryption keys, and disclose purchase price and order volumes. The authorities will also take strong-handed punitive actions against the perpetrators of cryptocurrency-related scams.

In a press release, the government said that the new regulations were necessary “to prevent a general public without expertise from suffering losses by participating in virtual currency investments that have massive fluctuations.”

These issues were discussed on Wednesday, December 13, 2017, in a meeting presided over by Hong Nam-ki, minister of the Office for Government Policy coordination, and attended by officials from the ministries of justice, finance, and science and ICT, as well as from the Financial Services Commission, the Korea Communications Commission, the Fair Trade Commission and the National Tax Service.

While some news headlines are presenting this as a catastrophic development that will shut down the cryptocurrency industry in South Korea, the initiative of the South Korean authorities is in line with current trends toward stronger cryptocurrency regulations in China, Europe and the U.S.

“A right set of regulations will rather nurture the (virtual currency) market, and we would welcome that,” Bithumb representatives told Reuters, adding that such a code of conduct could add legitimacy to the market.

The post South Korea Moves to Regulate Domestic Bitcoin Trading, Exchanges appeared first on Bitcoin Magazine.

Japan's GMO Internet Group Will Pay Thousands of Workers in Bitcoin

Thu, 12/14/2017 - 11:14

Blockchain development companies and the cryptocurrency press have been paying their workers in cryptocurrencies for years, but one realizes that the times are truly changing when mainstream companies start paying their workers in bitcoin.

GMO Internet Group, a Japanese provider of a full spectrum of internet services for both the consumer and enterprise markets, is introducing a system for employees to receive part of their salary in bitcoin.

Headquartered in Tokyo, GMO Internet Group comprises more than 60 companies in 10 countries. In view of the group’s size and financial muscle, this initiative is likely to boost the mainstream adoption of the practice of paying salaries in cryptocurrencies.

The move is partly motivated by the desire to promote the adoption of Bitcoin, which is a strategic priority for GMO. In fact, the group is vigorously active in bitcoin trading and mining services, as well as mining hardware development. Therefore, anything that is good for Bitcoin is also good for GMO.

In May 2017, GMO launched a cryptocurrency exchange, initially dubbed Z.com Coin and later rebranded as GMO Coin, which features cryptocurrency FX and trading on both computers and smartphones. The exchange offers two types of services: cryptocurrency FX, which is an over-the-counter (OTC) bitcoin margin trading and cryptocurrency trading, which enables buying and selling of virtual currency in JPY in addition to basic features allowing customers to send and receive bitcoins.

In September 2017, GMO announced the upcoming launch of a new bitcoin mining business. “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 mining business is scheduled to start in January 2018.

GMO expressed its belief that cryptocurrencies will develop into “new universal currencies” available to anyone from any country or region who wants to freely exchange value, “creating a new borderless economic zone.”

The option to receive part of the salary in bitcoin will initially only be available to employees of one GMO company — GMO Internet Co. Ltd. — starting in March 2018, but it will be gradually extended to more than 4,000 employees in other GMO companies based in Japan.

The minimum bitcoin payment will initially be 10,000 yen (~$88) and the upper limit will be 100,000 yen (~$881). Each salary payment in yen will be reduced by the amount of bitcoin paid, using the exchange rate at the GMO Coin exchange.

Mainichi Japan notes that Japan's labor code stipulates that businesses must pay employees in a recognized currency such as the yen, but, according to GMO, the move is in accordance with the law because any payments in bitcoin would be consensual, with a chosen amount to be deducted from paychecks and put toward purchasing bitcoin. The cryptocurrency is rising in popularity in Japan with an increasing number of retailers accepting it as a form of payment.

GMO Internet Group wants to contribute to the development of cryptocurrencies in the world by promoting cryptocurrency-related initiatives throughout the group. In particular, GMO wants to promote ownership of bitcoin among its employees — who can be the best evangelists for the group’s products and services related to the digital currency — to improve the employees’ exposure to and understanding of Bitcoin.

“Employers can now pay employees a portion of their net earnings in bitcoin by collaborating with niche payroll solution providers such as Bitwage, Wagepoint, or Bitpay, who manage the back-end mechanics, eliminate exposure to price volatility, and reduce compliance and governance risks,” noted Deloitte principal Eric Piscini.

A recent overview of cryptocurrency payroll processors and early adopting clients notes that offering salaries in bitcoin could make it easier for companies to retain and attract talent. Besides compensating current employees, “[cryptocurrencies] could help businesses more effectively tap into the open talent economy, where individual contributors may be drawn to business partners that offer payout features only cryptocurrency makes possible: fast peer-to-peer payments across country borders with minimal friction (or total freedom) from traditional banking systems,” said Piscini.

For now, the GMO press release is available only in Japanese.


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Bitcoin Price Analysis: Bitcoin Rests at Tipping Point Before Deciding Next Move

Wed, 12/13/2017 - 16:38

Bitcoin prices have currently stalled out in the $16,000s as the market decides if it wants to continue the ravenous bull trend or go through a more corrective phase. In the last 30 days, the price of bitcoin has doubled — entering into what most traditional market analysts would deem “bubble territory.” Bitcoin’s growth has been so rapid, it has managed to break north out of a parabolic trend to form an even more aggressive parabolic shape known as a “hypodermic trend.” Let’s take a look at the macro view of bitcoin and see if this trend is sustainable or ripe for a correction:

Figure 1: BTC-USD, 1-Day Candles, Macro Trend

The image above shows a multi-year, parabolic envelope that, until recently, has guided the bitcoin bull market. Within the parabolic envelope we see a strong linear channel (shown in purple) that has provided very strong support and resistance through much of the bitcoin price growth. At the end of November 2017, however, bitcoin price growth was so strong, it managed to break out of both the linear and parabolic trends and form a more aggressive price trend: a hypodermic trend.

Figure 2: BTC-USD, 60-Minute Candles, Hypodermic Trendline

The solid red line represents an aggressive support line that has guided this new, aggressive price growth out of the parabolic envelope. As of the time of this article, I am monitoring a trading range very closely as it nears this hypodermic trend. A breakdown below this hypodermic trend represents a diminished trend of demand in the bitcoin market, and it could ultimately lead to a local top on for BTC-USD. Paired with this hypodermic breakdown is a breakdown of the trading range (shown in blue) that has a span of approximately $5,000. A breakdown of a trading range that large would have quite a meaningful market reaction and is likely to see a profound correction before bitcoin buyers step back in.

However, before we get all doomsday-esque, it’s important to remember that distribution phases and reaccumulation phases are quite similar in shape and are called “evil twins” of one another. It’s entirely possible we could see new all-time highs out of bitcoin but, given the weak and anemic follow-through of each all-time high breaching the trading range, I am inclined to lean less toward accumulation and more toward distribution.

As always, volume will be a huge indicator in this process; a great telltale that we are, in fact, in an accumulation phase will be volume growth coupled with price growth. If we begin to push new highs and we see a volume growth trend combined with it, there will be a great sigh of relief from traders as this pairing will indicate increasing demand and diminishing free-floating supply in the market.

Summary:
  1. The price of bitcoin has doubled in the last month.

  2. The price growth has been so aggressive that it has broken north of a parabolic trend it’s been well-confined within for 3 years.

  3. Bitcoin is at a crucial point as it currently decides whether it wants to move up or down in price.

Trading and investing in digital assets like bitcoin and ether is highly speculative and comes with many risks. This analysis is for informational purposes and should not be considered investment advice. Statements and financial information on Bitcoin Magazine and BTC Media related sites do not necessarily reflect the opinion of BTC Media and should not be construed as an endorsement or recommendation to buy, sell or hold. Past performance is not necessarily indicative of future results.

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IcyWallet Offers a Cold Storage Bitcoin Wallet for the Visually Impaired

Tue, 12/12/2017 - 13:27

Safely storing cryptocurrency can be confusing, especially for newcomers to the space, but for people with visual impairments, finding an accessible option is especially challenging.

IcyWallet is a cold wallet with a difference: it is designed to make it as simple as possible for people with visual impairments to manage offline bitcoin storage.

The project got its start when Adam Newbold and his wife took a braille reading course as a learning activity. Shortly afterward, Newbold struck up a Reddit conversation with a blind Bitcoin enthusiast who expressed frustration with the lack of support for the blind community from Bitcoin software developers. None of the wallets worked correctly in his reader and he required help to perform any functions with bitcoin.

“I learned even more about practical accessibility issues and the real-world challenges that the blind encounter every day,” Newbold told Bitcoin Magazine. “This turned into a stronger personal interest that merged with my existing interest in Bitcoin when I realized that there are pretty big opportunities for improving the state of accessibility in Bitcoin software.”

He started a campaign in October 2017 to create a braille version of the original Bitcoin white paper. That campaign was successful and the document is now available for anyone wanting to get a copy.

That first success led Newbold to create the IcyWallet. His goal is to provide a 100 percent free and open source bitcoin hardware wallet for the blind. Work is currently underway with early milestones achieved, the progress of which is tracked on their website.

“One of the points you hear a lot about Bitcoin is that you can ‘be your own bank,’ which always sounds fun and empowering (and it is!),” said Newbold. “But it also means that you need to take responsibility for all of the things that banks do, like keeping your funds secure.”

He explained that even though today’s technology has solved a substantial number of issues that people with disabilities face, when it comes to bitcoin and security, there are still several missing pieces.

“There isn’t any kind of hardware wallet on the market today that’s fully accessible to people with blindness,” said Newbold, “and there are barriers to setting up secured, air-gapped solutions. This leaves people with blindness limited choices that all involve compromising security to some degree. With the IcyWallet, the private keys never leave the device.”

According to Newbold, here is how the device will work:

  • First, the transaction is generated on a (different) computer connected to the internet, so that the fee can be properly estimated;

  • Then, the transaction is signed by the IcyWallet device;

  • Finally, the transaction is broadcasted to the Bitcoin network back on the internet-connected device. This keeps the IcyWallet device completely offline, ensuring that the private keys are safe at all times.

Users simply plug in headphones and a keyboard or a refreshable braille display. The device boots directly into the wallet app with functional audio and braille support.

“Refreshable braille display support means that it will even support someone with deaf/blindness right out of the box,” said Newbold.

IcyWallet generates hierarchical deterministic wallets with mnemonic seeds for safe backup. The code is developed using the BitcoinJS library and is intended to be run on an “air-gapped” Raspberry Pi, though Newbold points out that, in theory, the software can run on other hardware.

Newbold has plans to make a demo video/audio track available soon, as well as an early release of the software (probably limited to wallet generation only) so that he can start to get more feedback and code suggestions that will improve the IcyWallet.

As Bitcoin in particular, and cryptocurrencies in general, see wider adoption, the implementation of greater accessibility systems will be important to their continued growth. IcyWallet is expected to launch at some point in 2018.



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New In-Game Cryptocurrency Systems Let You Buy Assets in the Virtual Reality World

Tue, 12/12/2017 - 12:23

High Fidelity is announcing the launch of Avatar Island, a VR domain where High Fidelity users can purchase items for their avatars, all contributed by digital artists from around the world.

High Fidelity is a next-generation platform for Virtual Reality (VR) worlds developed by Philip Rosedale, the creator of the once very popular Second Life. In September 2017, the company announced that it was developing a blockchain for intellectual property protection and an in-game cryptocurrency .

“I’ve been looking at blockchain technology since Second Life, as the Linden dollar was one of the first digital goods currencies,” said Rosedale. “At the time that Bitcoin came out, I was thinking a lot about how we could generalize what we did at Second Life. I didn’t have all of the ideas, but in the last few quarters we have been building the backend system to make all of this work.”

Different sorts of VR items, such as custom wearables for avatars (which were and still are very successful in the Second Life marketplace) will be sold and bought in Avatar Island through a new cryptocurrency running on a blockchain, which will also track the history and ownership of each item.

“[This] is the first beta release of the commerce system, which is a cryptocurrency-based content protection and payment system,” said Rosedale in the High Fidelity forum. “[Behind]  the scenes, the currency is actually stored on a ‘blockchain’ very similar to Bitcoin but supporting a higher transaction rate and lower fees. This blockchain also stores the PoP [Proof of Provenance] information for digital goods, meaning that both your currency and your digital property will exist in a public database and cannot be altered.”

Contrary to Second Life, where the only option available to external operators was to host their VR worlds on servers operated by Second Life developer Linden Lab, High Fidelity allows developers to host VR worlds independently. In November 2017, High Fidelity released an update that allows developers to rapidly deploy High Fidelity VR domains to the cloud, in collaboration with DigitalOcean. The distributed nature of the upcoming High Fidelity VR network calls for full interoperability between different servers, including network-wide recognition of ownership rights.

High Fidelity’s Digital Asset Registry (DAR), is a decentralized, publicly auditable ledger that serves as a record of transactions made by High Fidelity users. Each item is uniquely identified with a digital fingerprint (a hash algorithm) and can be purchased using High Fidelity’s blockchain-based cryptocurrency, the High Fidelity Coin (HFC). The DAR includes tamper-proof PoP services for any asset’s chain of ownership, its characteristics and its entire history, from certification onward.

This approach is designed to solve the theft and counterfeiting problems that plagued Second Life. At the apex of Rosedale’s first VR world’s popularity, thousands of independent developers around the world made a living designing and selling virtual items, and the need for more solid anti-piracy measures was widely felt.

According to High Fidelity, the Bitcoin and Ethereum blockchains have limited throughput (transactions per second) and high transaction fees, which makes them unsuitable for HFC. Therefore, Rosedale’s team opted for a new, public but “permissioned” blockchain.

In a promotional video that predicts a booming future for the VR sector, with a billion users, 50 million servers and a trillion dollar economy, Rosedale explains the design and implementation criteria for High Fidelity’s blockchain.

“As of today, the blockchain is one node using the [Elements] codebase from Blockstream,” said Rosedale. “We’re going to federate it to a managed group of blocksigners and also provide a block explorer and a full read-only node as well, so that we have many backups of the blockchain. This is similar to the [DPoS] (Delegated Proof of Stake) model being used by [EOS] and others for upcoming public blockchains.”

For now, the High Fidelity Commerce system is in closed beta, and High Fidelity is giving HFCs to anyone interested in participating in the beta. Eventually, HFC will be traded on public exchanges like other cryptocurrencies.

“In the coming weeks and months, we will be attaching the HFC blockchain in several ways to the major cryptocurrency networks to enable you to freely trade HFC for other currencies like Bitcoin or Ether, or to use exchange markets to convert it back to real-world currency if you like,” said Rosedale. Considering high price volatility as a roadblock, High Fidelity will try and stabilize the value of HFC at 100 HFC = $1 USD.

Before getting too excited and rushing to buy HFC, it’s worth bearing in mind that Second Life never achieved mass-market appeal, and that could become the fate of High Fidelity as well. However, it can be argued that Second Life was launched too early, and modern VR interfaces, like the headsets and hand controllers developed by Facebook’s Oculus VR, could be the game changer that will permit High Fidelity to succeed where Second Life failed. As always, time will tell.

Crytek

Another VR game developer and technology provider, Crytek, is announcing a partnership with cryptocurrency startup Crycash to create a new cryptocurrency for gamers. Crytek is the maker of the high-performance game development platform CryEngine and publisher of many highly realistic VR games that are popular among hardcore gamers.

“The Crycash ecosystem solves two problems at once: it gives gamers a way to monetize game time by completing in-game tasks, set by game developers, while providing developers with decentralized sales options for games and other virtual items,” said Crycash CEO Wachtang Budagaschwili. “Crycash will consist of four major components: Plink, a communications app for gamers and Crycash wallet; an advertising platform; an eSports platform for gaming tournaments and other events; and a virtual asset marketplace.”

“We see a lot of potential in the Crycash concept, and we were impressed by the Crycash team’s innovative approach to creating practical products and tools for gamers,” said Crytek Managing Director Faruk Yerli.

Crycash will hold a token sale from December 12, 2017, to January 15, 2018, and add Crycash payment options to games from Crytek and other developers.



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Gifto’s Vision for the Virtual Gifting Economy

Tue, 12/12/2017 - 11:24


The digital age has changed many things about the way we work, play, think and live. And one key element of this is the act of giving.

In the online community, it’s hard to think of a more natural display of positive interaction than the act of giving virtual gifts.  In today’s digital age, giving has taken on a whole new meaning as growing numbers of transactions and exchanges occur online. 

At the nexus of this movement is a project called Gifto, a virtual gifting protocol for content creators and their fans throughout the world. 

Gifto seeks to forever change the way we give gifts through the use of smart contracts that facilitate customized, fun virtual gifts to be sent via the Ethereum blockchain, across all content platforms including Facebook, YouTube and Instagram. Gifto achieves this through a decentralized, user-driven model which rewards quality content generation, while fostering a richer set of connections between content creators and their audiences.

The brains behind this idea, Andy Tian, is the co-founder and CEO of Asia Innovations Group (AIG), which is the leading mobile interactive entertainment group in Asia. Headquartered in Hong Kong, AIG operates a suite of mobile, social and online entertainment products for users worldwide. 

Launched in May 2016, AIG’s flagship, live-streaming product, Uplive, is already available in more than 100 countries. The app enables anyone around the world to broadcast and view real-time video streams via their smartphones.  It currently has 20 million users and 60,000 broadcasters worldwide, with a projected revenue of more than $100 million from virtual gifting in 2017 alone. With Gifto, AIG is decentralizing its successful virtual gifting model to all content creators, regardless of whether they are on Uplive or not.

Uplive is one of the top five streaming apps in the world. It is the culmination of AIG’s many years of experience and tech development in gaming, social media and video. And Gifto is the culmination of Uplive’s experiences.

The Chinese live streaming market was valued at $5 billion in 2017, according to a forecast by Credit Suisse. Tian sees a golden opportunity with Gifto to replicate this incredibly successful model in international markets across any content platform through its universal protocol.

The Inspiration Behind Gifto

Gifto sprang from Tian’s personal interest in the question of how to apply game mechanics to any and all things that people engage with.

Born in China before moving to New York at age 10, Tian ran Google’s mobile business in China, during which he introduced Android to the China market. He then started one of the earliest social gaming companies in the world, XPD Media, which was later sold to Zynga to become Zynga China. After leaving Zynga, he co-founded AIG, which now has over 300 staff members located around the world, from Casablanca to Tokyo. 

Tian said that Gifto arose from conversations with both broadcasters and users of the Uplive community platform. That dialogue reinforced the notion that only the top 10 percent of all online influencers these days are able to effectively monetize their work. 

“What about the 90 percent of content creators who have 100,000 fans?” he asked. “Or only 50,000 fans? They can’t monetize at all based on the traditional ad/sponsorship model that’s currently in place.” 

One challenge on the Uplive platform was how to calculate the amount of revenue share a broadcaster has across all of Uplive. 

“We currently have a centralized system that does calculations and verification, a common practice among any centralized, consumer-based service,” Tian said. “But when a number of my investors and friends introduced me to smart contracts, that was a game changer. By integrating these contracts into the virtual gift itself, a transaction could automatically be executed, allowing for the instant delivery of revenue share to gift creators and producers.” 

This was a major development with respect to Uplive, where more than 25 million virtual gifts are sent every month.

“With blockchain, we can transparently, quickly and accurately execute payments so that our creators don’t have to wait 30 days or more to receive their share of the gift proceeds,” Tian said. “They can gain revenues directly from their fans.” 

Tian extols the idea of a crypto token that has a common value regardless of which country it is sent to or received from. 

“We currently have users paying us from 50-plus countries, with 30-plus payment providers worldwide,” he said. “With fiat, we have experienced lots of credit card fraud issues like cancelled transactions among other problems associated with this form of money on an international scale. Cryptocurrency can solve that. Not having to convert between different currency types will be a big win for our users.” 

In addition, Gifto can be used universally by any platform, not just Uplive, said Tian.

“The Gifto protocol will be available to any content creator on virtually any platform, including YouTube, Facebook and Instagram,” he said. “For the first time ever, content creators on these platforms won’t be constrained to the advertising-only model that generates very little revenue for the creators without millions of followers. Now, anyone will be able to accept virtual gifts through the Gifto platform and generate meaningful income from their content, directly from their fanbase.”   

Fostering a Global Gifting Economy

The concept of virtual gifts sent from fans to broadcasters is what drives Gifto. It allows creators to produce and place virtual gifts on a blockchain as a virtual asset and set their own pricing and value. Each created gift would have its own unique nature and character, adding the all-important element of fun to the whole gifting process. Broadcasters could then be digitally compensated regardless of the number of fans they have. 

Gifto’s public token sale on the Ethereum blockchain will begin on December 14, 2017. Thirty percent of the tokens, called “Gifto,” will be sold at that time subject to a $30 million hard cap. The campaign will adhere to a strict “know-your-customer” process, excluding citizens from China, the U.S., and Vietnam, based on legal regulations in those countries. 

Tian said the journey to exploring an initial coin offering (ICO) started early in 2017, when his company began examining the utility of blockchain technology as a solution to requests for new features from Uplive’s broadcasters and user base.  He said that monies garnered will be used for product development and engineering, marketing and market adoption, user acquisition and operations.

“We believe that we’ll be the highest revenue consumer company in Asia to launch a token offering,” Tian said. “Blockchain technology, in our opinion, is an awesome application and solution to decentralize everything and we want to advance this thinking.”

Tian’s ultimate goal is to make blockchain useful to mass-market consumers who don’t necessarily understand what the technology is, but can still enjoy the benefits of decentralization.

“It’s all about empowering the everyday people,” he concluded. “Content creators with a small, loyal fanbase now have a fun way to connect with their fans and make it easy for them to contribute.” 

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Munchee ICO Halted by SEC for Securities Violations

Mon, 12/11/2017 - 17:19

On December 11, the U.S. Securities and Exchange Commision (SEC) issued a cease-and-desist to California-based Munchee Inc. to stop their ICO and return the funds that had been collected.

Munchee had been seeking $15 million in capital to improve their existing mobile app and create a restaurant review ecosystem that they described as being “Yelp meets Instagram” in their Bitcointalk announcement. The problem arose when Munchee emphasized that it would take steps to create a secondary market for the tokens as an investment vehicle, leading investors to have a reasonable belief that their tokens would rise in value, long in advance of the utility of the token being made available.

In the SEC announcement, Stephanie Avakian, co-director of the SEC Enforcement Division, said, “We will continue to scrutinize the market vigilantly for improper offerings that seek to sell securities to the general public without the required registration or exemption. In deciding not to impose a penalty, the Commission recognized that the company stopped the ICO quickly, immediately returned the proceeds before issuing tokens, and cooperated with the investigation.”

In the SEC complaint, the commission argued that the MUN tokens were considered securities because “they were investment contracts” and were deemed a security regardless of their utility at the time of the sale. Munchee consented to the SEC’s order without admitting to, or denying, the findings.

The action is significant as it shows the willingness of the SEC to step in and take action. It also illustrates a willingness on the part of the SEC to work with companies that are cooperative when they run afoul of the regulations.

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Bitcoin Futures Are Here: The Story So Far

Mon, 12/11/2017 - 16:38

The week ahead will give better future indication of Bitcoin derivatives products as yesterday at 6 p.m. EST, the Chicago Board Options Exchange (CBOE) allowed bitcoin futures to begin trading under the symbol “XBT.” Chicago Mercantile Exchange (CME) is set to allow futures trading in the cryptocurrency of their own accord on December 18, 2017. Bitcoin futures were up over 20 percent leading into the U.S. market open. Current appetite for the futures contracts seems to show a stronger preference for near-term bitcoin futures priced above the current spot rate. According to the CBOE twitter feed, over 800 contracts were traded in the first two hours.

Image source: CBOE delayed quotes dashboard as of 3:53 PM. EST

At least one outage plagued the CBOE in early trading, including two minutes of downtime from 8:31 p.m. EST to 8:33 p.m. EST, while the CBOE stated at 11:34 p.m. EST that there would be a 5-minute hiatus if the front month (January expiration) rose above 30 percent.


Image Source: www.cboe.com

These deliberate halts in trading are known as “circuit breakers” and are meant to protect the market from unmanageable volatility.

While we wait to see how futures trading unfolds in the U.S. markets today, here are some of the notable events that got us into a world of bitcoin futures.

October 31

The CME Group gave bitcoin investors around the world a bit of a Halloween treat when they announced plans to allow bitcoin futures to be traded on their exchange. The Chicago Mercantile Exchange’s announcement notably coincided with the anniversary of the publication of Bitcoin inventor Satoshi Nakomoto’s original 2008 white paper on the cryptocurrency.

Cryptocurrency enthusiasts took this as a signal of mainstream acceptance of the asset class, and bitcoin closed the day (according to historical data provided by www.coinmarketcap.com) at $6,468.40. When futures trading opened last night, bitcoin was trading at $14,901.70.

December 1, 2017

Regulators gave bitcoin futures the green light for the CME Group as well as for self-certification by the CBOE Futures Exchange (CFE) as well as for the Cantor Exchange’s new contract for bitcoin binary options. The exchanges assured the CFTC that the new products were compliant with the self-certification process rules, and the CFTC refrained from halting the self-certification. CFTC Chairman J. Christopher Giancarlo stated in a press release:  

Bitcoin, a virtual currency, is a commodity unlike any the Commission has dealt with in the past…[a]s a result, we have had extensive discussions with the exchanges regarding the proposed contracts, and CME, CFE and Cantor have agreed to significant enhancements to protect customers and maintain orderly markets.December 4

The CBOE announced it would launch futures trading in bitcoin under the symbol “XBT” on Sunday night, December 10, 2017, at 6 p.m. EST. This move was seen as a manoever to beat the earlier announcement from the competing CME that they would allow futures trading in bitcoin beginning December 18, 2017. Not surprisingly, the CBOE’s usage of the exchange platform Gemini, owned by the Winklevoss twins, may allow the newly minted “Bitcoin Billionaires” to further capitalize on the successes of the cryptocurrencies.

December 5

A Natixis Investment Managers Survey of 500 global investors managing more than $19 trillion of assets has found that “nearly two-thirds [of survey participants] said Bitcoin was in a bubble, and this was a month before the cryptocurrency surged above $10,000 last week.”

Also bearish on bitcoin was Stephen Roach, a Yale University economist who told CNBC’s “The Rundown” that exchange legitimization makes bitcoin “somewhat dangerous [for investors],” citing a “lack of intrinsic underlying economic value to the concept.”

December 6

S3 Partners, a data research and analytics firm, sent this note to investors on GBTC ETF, the only ETF which trades bitcoin. In the note, Managing Director of Predictive Analytics at S3, Ihor Dusaniwsky, suggested that bitcoin as an asset would be “ripe for a pullback once the CBOE futures contracts go live” but also cautioned that the fees for shorting the GBTC ETF will be extremely high. While futures contracts would enable easier and safer access to both long and short positions, Dusaniwsky noted, futures trading would also carry premium costs for all GBTC ETF investors, stating:

Long GBTC holders may feel the pain of its 53% asset premium shrinking, while short sellers will probably be incurring a 50%+ stock borrow fee — both sides will be paying a premium in order to ride the Bitcoin rollercoaster once the CBOE futures start trading.

Also on December 6, 2017, trading volume for BTC nearly doubled from 6.9 billion to 12.7 billion and crosses the 10 billion volume threshold for the first time since Bitcoin crossed $10,000 (November 28, 2017). Whether this run up was related to the prospect of bitcoin futures or just normal market machinations is unclear.


Screenshot of historical data from Coinmarketcap.com (link above)

December 7

The Futures Industry Association, an industry organization whose primary members consist of the largest clearing houses and clearing firms for futures in the world, published an open letter it had sent to the CFTC chairman on December 6, 2017, decrying the lack of “a healthy dialogue between regulators, exchanges, clearing houses and the clearing firms who will be absorbing the risk of these volatile, emerging instruments during a default.” This is in spite of the fact that the letter also admits that, “Under law, exchanges may self-certify a product for trading by the close of business one day and then list the product for trading the next day.This process does not require CFTC approval or input…”

Also on December 7, in a joint interview with former Mayor Michael Bloomberg, Chairman and CEO of Goldman Sachs, Lloyd Blankfein, stated that, “We’ll [Goldman Sachs] see. If it works out and it gets more established and it trades like a store value and it doesn't move up and down 20% and there's liquidity in it, we’ll get to it.”

That same interview includes the suggestion that, according to an unnamed source with knowledge of Goldman Sachs plans, the investment bank plans to help clear bitcoin futures contracts for certain clients when the derivatives go live and that “the decision to clear client trades will be made on a case-by-case basis.” Goldman Sachs “will act in an agency capacity” and “won’t serve as a market-maker or build inventory in the derivatives.”

December 8

As the normal trading week came to an end, Coinbase and its exchange platform GDAX sent a reminder from Coinbase CEO, Brian Armstrong, to its users via blog and email to “invest responsibly,” also noting that “there may be downtime which can impact your ability to trade.” While seemingly innocuous, it appears the Coinbase team was preparing for a surge in trading volume that would crash its platform. At 10 p.m. on December 10, 2017, Coinbase tweeted that it would be offline for one hour of scheduled maintenance to “help to prevent slow performance and login issues during larger traffic surges.”

Conclusion

The market on Bitcoin Futures is open for business. After 14 hours of premarket bitcoin futures and a full day of trading from both European and U.S. investors, “XBT” seems to be functioning as planned. While spectators of the past week have foretold of everything from rosy outlooks to apocryphal warnings, we, at least for the moment, seem to be on a path toward embracing cryptocurrency futures as a new wave of derivatives.

The post Bitcoin Futures Are Here: The Story So Far appeared first on Bitcoin Magazine.

U.S. Senate Mulls Reporting Requirements for Cryptocurrencies

Fri, 12/08/2017 - 17:23

American Bitcoin holders may soon have to report their holding to the United States government.

First introduced on May 25, 2015, by Sen. Chuck Grassley [R-IA], Senate Bill S.1241, the
“Combating Money Laundering, Terrorist Financing, and Counterfeiting Act of 2017,” can have serious implications for those involved in the cryptocurrency space. The hearing for S.1241 was held with virtually no public notice on November 28, 2017; the full two-hour hearing can be viewed here.

Currently, the definition of “financial institution” includes banks, trust companies, credit unions, currency exchanges and the like. But according to Section 5312(a) of title 31, the new bill would amend the definition of “financial institution” to include “an issuer, redeemer, or cashier of prepaid access devices, digital currency, or any digital exchanger or tumbler of digital currency.” 

This is most specifically embedded in Section 13:


Sen. Dianne Feinstein [D-CA] said in her opening remarks of the hearing, “The bill criminalizes intentionally concealing ownership or control of a bank account.” Although, during the hearing, no further clarifications were given as to the effects this would have on the cryptocurrency community, based on the amended definition of “financial institution,” it would seem that the bill would criminalize anyone intentionally concealing ownership or control of a digital currency or exchange account. While there is no finalized bill yet, the implication would be that cryptocurrency holders need to fill in federal registration forms for tax disclosure, quarterly reporting and more.

Notably, while the purpose of the bill and hearing had to do with adding digital currencies and exchanges to the definition of financial institutions, there was almost no discussion on the topic other than briefly in reference to drug cartels using them to launder money. For example, nowhere in the testimony by Coinbase board of directors member Kathryn Haun Rodriguez does she mention digital currencies or exchanges, and at no time was she asked any questions about them.

Unsurprisingly, the bill is receiving pushback from some cryptocurrency holders. Activists on Reddit have started a social media campaign in opposition to the bill, and are suggesting others to tweet: “@senjudiciary that #Bitcoiners are not #Crooks Remove #DigitalCurrencies from Section 13 of S1241.” Others are contacting their senators directly.

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Op-ed: Bitcoin Is Not a Bubble; It's in an S-Curve and It's Just Getting Started

Fri, 12/08/2017 - 13:09

One of the most intriguing stories underpinning the recent rise of bitcoin prices is how financial institutions will interact with the currency.

The upcoming CBOE futures market is going to open the door for Wall Street giants to participate in the market. That could spell moon or doom for bitcoin, and everyone is speculating on what may happen next.

It is this Wall Street/BTC interaction (phenomenon) that may be driving the unbelievable price spike of the past few days — at least partially.

On the macro scale, however, we may be witnessing a more grand pattern forming; a price-correlated S-curve.

The S-curve is the classic adoption curve applied to the advent of new technologies. As a percentage of the population, adoption looks like a lag phase where the technology is utilized by the innovators of said technology, followed by an early adoption phase led by people who often take risks in order to be the first movers in a space. After the early adopter phase (~16% of the population is now participating), there comes a great “tipping point” where the wide use of the technology seems inevitable. The tipping point gives rise to the “Early Majority” joining in on the fun, followed by the late majority and, finally, the holdouts who allow the top of the S to asymptotically approach total adoption. The curve, as a factor of time and adoption, looks sort of like the following:


This curve correlates nicely with adoption of some of the greatest technological innovations in our recent history:


Some important things to note is that this is just U.S. adoption. Much of the world lagged behind the U.S. in the consumer appliance boom of the 1900s. All of these curves, however steep, do follow the same S-curve trend fairly nicely.

So what could that mean for bitcoin? It’s difficult to choose a metric to define bitcoin adoption, and, in fact, there are disputes about if one metric accurately captures it. However, for simplicity I’ll highlight Google searches for bitcoin and Coinbase user count as microcosms of the global adoption trend.


(from CNBC)

This seems to show a very similar pattern to what could be the transitional phase between “innovators” and “Early Adopters.” Just to harken back to the earlier statement though — it’s very difficult to put a number on bitcoin adoption.

So why is this remarkable? Bitcoin may be the first “buyable” S-curve. Because this is a capped-supply currency, more users adopting and using it necessitates an increase in price. Whether that correlation is even reflective of the current price action is a practically unanswerable question, and the obvious leaning would be towards there being a speculative additional value. However, with an increase in adoption, there seems to be a floor rising up to catch whatever “bubble burst” might occur, if and when it happens.

I'm starting to take the controversial position that I'm less looking at a financial market chart and more looking at a graph for adoption rates. $BTC pic.twitter.com/RmGFyCdwan

— Parabolic Trav (@parabolictrav) December 3, 2017

“Eternal September” is the phrase used to describe September of 1993, when widespread internet adoption began to look inevitable. It occured after AOL began a mailing campaign offering free trials of its internet service, leading to an influx of internet users that has since never ended. Hence “Eternal September.”

Always thought it would take another bubble for the #crypto equivalent, but this might be the start of #Bitcoin Eternal September https://t.co/95PaF9ZYD7

— David Bailey (@DavidFBailey) December 6, 2017

To compare bitcoin’s adoption to its complement — the internet — this may very well be the “Eternal September” episode for bitcoin.

If the S-curve adoption theory applies to bitcoin, then buckle up. I won’t pretend to be able to predict a spot price, but I will say I think we may be sitting close to another order of magnitude this time next year.

See y’all on the moon.

Corollary: Bulls sound smart in bull markets. We may look back and laugh at this thought, or it may hold true for years to come. Time will tell. ‘Til then, buy bitcoin.

Trading and investing in digital assets like bitcoin and ether is highly speculative and comes with many risks. This analysis is for informational purposes and should not be considered investment advice. Statements and financial information on Bitcoin Magazine and BTC Media related sites do not necessarily reflect the opinion of BTC Media and should not be construed as an endorsement or recommendation to buy, sell or hold. Past performance is not necessarily indicative of future results.


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Out of Steam: PC Gaming Platform Ends Bitcoin Payment Option

Thu, 12/07/2017 - 17:11

The utility aspect of Bitcoin faced a setback yesterday as PC gamers heard from Valve Corporation’s Steam Team in a blog post that Bitcoin would no longer be accepted as payment on its digital distribution platform, Steam. Citing the volatility of the currency as well as the rising cost of fees, a representative of The Steam Team, known as “kurtis”, explained that the volatility of Bitcoin has created a problem for users trying to purchases games using the currency. Kurtis pointed out that:

The value of Bitcoin is only guaranteed for a certain period of time so if the transaction doesn’t complete within that window of time, then the amount of Bitcoin needed to cover the transaction can change. The amount it can change has been increasing recently to a point where it can be significantly different.

Kurtis further elaborated that the normal resolution mechanism on Steam is either to refund the original payment to the user, which would negate the transaction or to ask the user to transfer additional funds to cover the remaining balance. “In both these cases, the user is hit with the Bitcoin network transaction fee again.” Bitcoin was adopted as a means of payment via  bitcoin payment processor, BitPay, for games on Steam on April 27, 2016.


Some users commenting on the blog seem to agree and support Valve’s decision, with many calling for utilization of alternative cryptos such as Vertcoin, IOTA, and Litecoin. Others, such as one user named “Kaj Jez”, stated,

Massively disappointing. The first purchase I ever made in Bitcoin was on Steam. As long as Steam doesn't accept BTC I will prefer to do business with devs' own stores that hopefully do…But as Bitcoin will undoubtedly improve itself with scalability solutions so to will Steam hopefully improve itself by rectifying this mistake and once again accepting it.

Steam, the largest digital distribution platform for PC Games, has an active user base of over 275 million users with an average of 11 games per user, according to Sergey Galyonkin’s Steam Spy API. In a Medium article, Galyonkin elaborated that 2016 sales for PC games through the Steam Platform totaled roughly $3.47 billion dollars. While it is unclear how much of that revenue resulted from bitcoin transactions during its period of acceptance, it is clear that the PC gaming community faced a major setback in utilizing Bitcoin as a means for buying games.


At the time of this writing, neither BitPay nor Steam nor Valve Corp could be reached for additional comment.

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New Bitcoin Mining Centers Set to Increase North American Market Position

Thu, 12/07/2017 - 16:22

While China continues to dominate the bitcoin mining market, North America has now gained another significant player who can help decentralize mining power. Hut 8 Mining Corp (Hut 8) and the Bitfury Group (Bitfury) have announced a partnership that will create North America’s largest bitcoin mining center, located primarily in Alberta, Canada.

“We are excited to partner with Hut 8 to expand our activities in the strategic North America market,” said Bitfury CEO, Valery Vavilov, in a statement. “We believe there is a tremendous opportunity to establish North America as one of the most important cryptocurrency mining hubs in the world.”

Known for manufacturing their own Application Specific Integrated Circuit (ASIC) chips, Bitfury is the world’s largest bitcoin mining company outside of China. Their custom hardware and software solutions eliminate the reliance on any third parties, which lowers costs and improves efficiency. Their BlockBox AC datacenter product allows for significantly shorter setup time to establish a commercial bitcoin mining center.

Hut 8 is a bitcoin mining company that will provide shareholders access to the price appreciation of bitcoin. Once the partnership is finalized, Hut 8 will control what they believe to be the largest cryptocurrency mining farm in North America: Hut 8 will gain immediate control over 22 bitcoin mining datacenters spread across Alberta.

The expectation is for Hut 8 to be listed on the Canadian stock exchange during Q1 of 2018 and increasing control over an additional 35 datacenters. Hut 8 anticipates that through a combination of existing Bitfury sites and new installations, they will scale to 60 or more datacenters during 2018.

The datacenters will be comprised of Bitfury’s containerized bitcoin mining units called Blockboxes, containing Bitfury’s 16nm ASIC chip, which they claim is one of the most efficient on the market. Bitfury will be providing the infrastructure for the partnership via the aforementioned assets and Hut 8 will own and operate the centers.

On December 4, 2017, Hut 8 is made available an approximate 13,200,000 shares on a private placement basis through GMP Securities L.P., worth approximately $25.7 million ($33 million CAD); the proceeds of which will be applied towards the initial acquisitions described above.

Also making moves in the North American mining market, Giga Watt has been promoting its own modular datacenter design called “Giga Pods.” While Giga Watt doesn’t have custom hardware solutions, they do allow for new entrants to buy and run their own hosted mining rig and potentially make money. It will be interesting to watch the development of these companies in North America over the course of 2018.

The post New Bitcoin Mining Centers Set to Increase North American Market Position appeared first on Bitcoin Magazine.

BANKEX Aims to Boost Asset Liquidity for Businesses

Thu, 12/07/2017 - 11:47


Business is a constant flow of transactions, which are actions with assets. It can be buying, selling, exchanging, renting, lending, pledging, assigning rights, granting licenses and so on… And the easier and faster the transaction is, the better. Ease and speed often depends on the degree of liquidity of the asset involved in the transaction. The reasons for low liquidity might be the following:


Multiple asset owners — this creates barriers in which effective communication is needed so that a common understanding can be agreed upon.

  • Assets are spread so wide that there is a lack of transparency around how cash flow is generated by assets.
  • There are often long timeframes between when projects are launched and when they achieve desired liquidity.
  • Regulatory barriers obstruct non-public companies from entering financial markets or raising funds from public investors.
  • Tracking the lifecycle of an asset through cash flow is difficult.
  • There are clear complexities in asset withdrawal as well as high legal and accounting expenditures from asset transfers at peak profitability.

Enter BANKEX, a technology poised to solve the issues of asset liquidity by increasing asset auditing in real-time, decreasing the price of evaluating an asset for a particular deal and increasing the speed at which a deal is realized such as selling, loaning and sharing.

BANKEX merges the concepts of Bank-as-a-Service (BaaS), Proof-of-Asset (PoA) protocol and distributed technology to enable information to be passed in real time using a blockchain.

BaaS is a model that enables fintech services to be offered without the need for brick-and-mortar financial institutions. Through the use of application programming interfaces (APIs) and a refined technical process, BaaS unleashes unexplored possibilities for financial products in various business sectors.


The ushering in of this new model comes at a time when fintech is evolving at an unprecedented rate. The decentralized BaaS model coupled with the use of smart contracts could solve the problem of trust for traditional banks.


By utilizing the PoA protocol, BANKEX supports companies in successfully getting access to global capital with the ISAO procedure. This value for investors also includes the ability to track portfolio profitability and boost income. As a result, this protocol will be widely available for third-party fintech providers — including artificial intelligence (A.I.) and Internet of Things (IoT) labs — and traditional financial institutions, along with the broader community of asset owners.


The BANKEX PoA protocol can ensure increased liquidity of any asset while allowing it to be used as an investment tool. The technology is executed through a process called “tokenization,” which protects sensitive data through an algorithmically generated number called a token.

Tokenization is similar to how a website address represents an IP address on the internet. Through its protocol, BANKEX is able to convert the rights of an asset into a digital format on the blockchain, making it globally available to be traded on an asset exchange. BANKEX tokens have both utility and security — serving as a gateway to the platform while being backed with real-world assets. To tokenize an asset, the company must ensure that said asset generates cash flow.

This guarantees a high level of financial, legal and tech oversight throughout the tokenization process for any business at any level of maturity. The blockchain undergirds this process, ensuring that all data becomes uneditable, irreversible and always available to confirm proof of the assets’ existence and state.      

BANKEX Applied to the Real World


BANKEX is offering a new level of fintech solutions to a broad range of entities, from corporations to young entrepreneurs. The aim is to assist businesses in funding their projects through the combination of new technology coupled with the power of the global investment community.


The following hypothetical case of a retail chain store is just one example of how BANKEX’s Proof-of-Asset protocol can be applied to a wide variety of industry sectors comprised of both small and large companies.


John has a small retail chain that he would like to expand by franchising to other cities. His business model is profitable and already consists of five stores working under his franchise agreement. Supported by BANKEX, John issues tokens that are backed by revenue from new stores. This should guarantee profit in new stores by allowing token holders to purchase products with their tokens. He has installed a cash register that will be able to update the sales results of every store. Token holders will receive a return on their investments, in some cases holding enough tokens to take part in decision making. John’s business will become more attractive as BANKEX solutions assist him in opening new stores throughout the country.  


BANKEX Due Diligence


With its Head Office in New York, business development office in Singapore, strategic partnership in Tokyo and engineering team in Moscow, BANKEX offers innovative fintech products and services with far-reaching implications, including applications within the traditional finance and investment sectors, micro-financing, real estate as well as access to historically illiquid assets, natural resources, and futures markets.


BANKEX is a member of the Enterprise Ethereum Alliance. EEA members include financial and technology companies and funds such as JP Morgan, UBS, MasterCard, Intel and consulting companies such as Accenture. BANKEX is meanwhile honored to count Balanc3, a ConsenSys formation, as advisors.


BANKEX has also formed a number of strategic partnerships with prominent industry players including Microsoft; Symphony Software Foundation; Soramitsu; the Entrust Group; Chronobank; and the Moscow Exchange (MICEX).


BANKEX has already announced a collaboration with MovieCoin LLC. led by Hollywood Oscar-winning producer Christopher Woodrow. By utilizing smart contracts and BANKEX's proprietary Proof-of-Asset protocol (PoA), smart asset MovieCoin will allow institutional and individual investors to invest in the motion picture industry.


The BANKEX token sale started on November 28, 2017. As of December 1, BANKEX has raised more than $20 million USD. The company is listed among the top 50 token sales in the world.


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Quant Network Launches Overledger for Cross-Blockchain Data Interoperability

Thu, 12/07/2017 - 10:06

Last month, science and technology magazine New Scientist covered the Overledger project in a story titled, “The Blockchain to Fix All Blockchains.” The story emphasizes the need for data interoperability technology across different blockchains that could play a role similar to TCP/IP, which enabled the internet to thrive.

“[Overledger] seems to be a straightforward extension of the original atomic swap idea,” said Cornell University cryptocurrency expert Emin Gun Sirer, as reported by New Scientist. But instead of only supporting currencies as atomic swaps do, the Overledger works for any data that can be put on the blockchain.


The Quant Overledger project is just coming out of stealth mode. In conversation with Bitcoin Magazine Gilbert Verdian, CEO and co-founder of Quant Network, confirmed that a patent for Overledger technology was filed in the first week of December.

"The uniqueness of our operating system is that Overledger is not another blockchain,” Quant Chief Strategist and Executive Director of the UCL Centre for Blockchain Technology at University College London, Paolo Tasca, told Bitcoin Magazine. “We do not impose new consensus mechanisms, new gateways, adapters or special validating nodes on top of existing blockchains. Overledger is a virtual blockchain that links existing blockchains and allows developers to build multi-chain applications (or in other terms blockchain-agnostic applications)."

According to Verdian, blockchain technology needs to enable next generation applications to function across multiple blockchains, not be limited to any single a vendor or technology and allow seamless communication across multiple blockchains as well as recognition of transactions and assets across blockchains.

As such, Quant is focussing on three goals: developing an API to connect the world’s networks to multiple blockchains; bridging existing networks (e.g financial services) to new blockchains; and developing a new Blockchain Operating System with a protocol and a platform to create next-generation, multi-chain applications.

Promoting the Blockchain ISO Standard

Verdian initiated the development of Blockchain ISO Standard TC 307, which will allow for interoperability, governance and reference architecture of blockchain technologies to work between blockchains as well as allowing blockchain networks to interoperate with existing systems and networks in use today.

Currently, there are 40 countries and organizations, such as the European Commission, working on developing the Blockchain ISO Standard, and the timeline is to have a published Standard in 2020, Verdian explained.

“Establishing blockchain standards will position ISO as a leading contributor to develop global solutions to facilitate data movement and information flows, thus enabling more efficient and timely transactions,” Verdian told Bitcoin Magazine. “There is no one blockchain standard or protocol currently in use. International standards will allow for interoperability and implementation and use of multiple blockchain-related protocols.”

“Quant Overledger will be compatible to the Blockchain ISO Standard when it is released, allowing a gateway to ‘talk’ a common language to other networks and existing systems such as financial services networks,” continued Verdian. “The entry and exit points of Overledger will be compatible to the ISO Standard, which any other technology vendor can also implement in future.”

Benefits of Interoperability

Verdian added that the widespread adoption and use of international blockchain standards could facilitate a new wave of innovation, productivity, employment and industry opportunities. For example, the growing burden of KYC compliance could be reduced through the development of international blockchain standards which utilize shared databases for undertaking business and transacting payments.

The development of international standards to support smart contracts has the potential to decrease contracting, compliance and enforcement provision costs. Similarly, the development of international blockchain standards could reduce transaction costs for SMEs when dealing with governments and businesses.

“Quant will completely change how people will be able to interact with blockchains in a way that’s not possible today,” concluded Verdian. “A good example is the recognition of a person’s identity by one entity on a blockchain will be recognized and understood by every other blockchain and every entity connected to those.”

Dapp Development

There are plans for a Quant App Store that will allow developers and startups to create multi-chain applications on top of Overledger and monetize their applications in unique ways, without having to rely on capabilities of only one blockchain.

“As a company, we’re also planning to release distributed applications on top of Quant in the areas of RegTech, FinTech and HealthTech,” Verdian told Bitcoin Magazine, adding by allowing businesses to directly interact with multiple blockchains, they will be better able to cope with the modern supply chain complexities.

In a pre-ICO (Initial Coin Offering) in January, followed by an ICO in February, Quant will sell Quant Tokens that will allow users to access the Quant network. Developers will be able to publish distributed apps on the Quant store and optionally monetize their apps by charging usage fees in Quant Tokens, for example.

Quant plans to release the first versions of Overledger in Q1 2018 and finalize the SDK and libraries in Q3 2018. This will be an open source and freely available software release that developers and enterprises will be able to use for creating next generation multi-chain applications. Then, Quant plans to release the Quant App Store at the end of 2018 for developers to publish their apps and earn Quant tokens.


Image courtesy of Quant Project 

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Regulation and the Future of Cryptocurrency at Token Summit II

Wed, 12/06/2017 - 16:34

On December 5th, 2017, the Mission Bay Conference Center in San Francisco hosted cryptocurrency enthusiasts in suits, hoodies and everything in between. Token Summit II, presented by William Mougayar, author of “The Business Blockchain,” and Nick Tomaino, founder of 1confirmation, was a hub for cohesion and problem-solving in the blockchain space. Experts gathered from every corner of the industry to discuss government regulation, cryptocurrency initiatives and the future of blockchain technology.

Here are some of the highlights from the conference.

Regulation Trials and Tribulations

Nancy Wojtas, partner at Cooley; Kathryn Haun, board member at Coinbase; Stan Miroshnik, CEO and managing director at Element; and Lowell Ness, partner at Perkins Coie, demystified and further debated looming government regulation (and lack thereof).

Common questions that echoed throughout the panel: Which regulatory agency should investors focus on? Are tokens securities? Will there be new regulation or does existing regulation suffice?

Haun believes that “people in the ICO space are myopically focused on the SEC.” Although the SEC has already issued guidance and issued emergency action, there is an “alphabet soup” of other agencies that could issue further regulation. Federal and state regulatory agencies such as the DOJ could also intervene –– which could involve prison time for breaking the law.

Wojtas, on the other hand, explained her perception that because the SEC is leading the charge, other agencies are taking a backseat. She speculated that “[people] are free to continue to do what we are doing,” while being sensitive to all regulations.

The short answer from the entire panel on whether or not tokens should count as securities: the government hasn’t figured it out yet. They agreed that until the government sets a precedent in court, there is no clear answer.

A utopian scenario in terms of regulating the industry as a whole would entail new regulatory schemes that specialize in blockchain technology and tokenization. The panelists suggested that there is a low likelihood for new regulation in the United States but that investors might see clarity once there is a body of cases that grows from tokens challenging the government in court or vice versa.

Token Transparency and ICO Insights

Messari, a new transparency and disclosures project, shared their vision to become the open source data library for the universe of crypto assets –– an SEC EDGAR-like solution for consumer protection. Ryan Selkis, founder of the Messari project, summarized the crux of cryptocurrency: Quasi-fiduciaries are selling quasi-securities, and there is no gold standard for disclosure.

By creating an open data library, Messari hopes to serve all people: consumers, investors, lawyers and beyond. The team is committed to neutrality, working with regulatory standards bodies and cryptocurrency projects on a global scale to provide a free, open-source database.

Crypto Valley > Silicon Valley?

Oliver Bussmann, President of the Crypto Valley Association, utilized his panel time to entice potential cryptocurrency token founders to consider the Crypto Valley (Zug, Switzerland) as the ultimate location to launch their venture. The Valley is leveraging Switzerland’s deep-rooted culture of privacy protection, confidentiality and legal certainty to become one of the fastest-growing global ecosystems. It boasts over 500 total members and an increase of 30 members per month. It’s no surprise that Crypto Valley churns out cryptocurrencies like clockwork. The Valley has produced 10+ large scale Initial Coin Offerings (ICOs) with 40+ in the process and 170+ in the pipeline.

In an interview with Bitcoin Magazine, Bussmann explained that unlike other ecosystems, such as Silicon Valley, entrepreneurs can expect to find every possible resource necessary for a successful token launch within a 30-mile radius of Crypto Valley.

“We have advisors helping with value proposition and token economy, seasoned legal experts, tax experts, accounting experts, people specialized in global marketing and global communications PR, secure ICO launch platforms, independent audit firms, smart contract audits, KYC, AML utilities and a community of investors looking to support the product.”

The Future of Cryptocurrency

Naval Ravikant, founder of AngelList, shared his thoughts about the current state of cryptocurrency. In his opinion, cryptocurrency seems to be going mainstream faster than expected. He cited factors such as “savings accounts returning nothing and federal reserves returning nothing” as motivators that investors might have for entering the cryptocurrency market. He also attributed the massive increase in market capitalization to the cryptocurrencies’ ability to “absorb infinite speculative money.” However, Ravikant believes that a regulation-free grace period is still necessary for cryptocurrencies to develop properly.

When asked where he hypothesizes cryptocurrencies are in terms of bubble status, Ravikant replied that money can be a bubble that doesn’t pop and that he isn’t sure about the severity of the cryptocurrency bubble. As he explained, “If we all agree that something has value, it does.”

In regards to government regulation, Ravikant’s answer was straight to the point:

“It’s not a question of when the government will get blockchain, but how.”



The post Regulation and the Future of Cryptocurrency at Token Summit II appeared first on Bitcoin Magazine.

Developers Release Lightning Protocol 1.0; Perform Successful Interoperability Tests

Wed, 12/06/2017 - 12:48

Blockchain developers ACINQ, Blockstream and Lightning Labs, are announcing the 1.0 release of the Lightning protocol and the world’s first Lightning test payments on the Bitcoin mainnet across all three implementations. These are considered to be important steps toward the standardization of the Lightning Network’s second-level, off-chain payment layer. The three teams, and others in the Bitcoin community, developed the Lightning specification through an open, collaborative process.

"Interoperability is key to making Lightning a success. We have worked for over a year to design a specification so that we and other developers can write implementations that talk to each other,” Elizabeth Stark, CEO of Lightning Labs, told Bitcoin Magazine. “This ensures that no matter which implementation a user is using, they will be connected to one Lightning Network.”

“It's the culmination of a year's work on the protocol specification, and the tests show that we have built a solid protocol that delivers on the promises of high scalability, increased privacy, and faster payments," Christian Decker, a Blockstream infrastructure tech engineer, told Bitcoin Magazine.

In parallel with protocol development work focused on interoperability and cross-compatibility, each of the three teams also developed specific Lightning implementations: ACINQ developed eclair, Blockstream developed c-lightning, and Lightning Labs developed lnd.

In a first test, the coffee shop Starblocks, a sample eclair application, accepted an incoming payment in bitcoin from a customer paying with the lnd Lightning app, routed through c-lightning.

In a second test, the developers made a payment from eclair to yalls.org, a sample lnd application, routed through c-lightning.

“This highlights another anticipated use case for Lightning: the ability to send instant, small value payments,” noted the three companies. The tests used nodes distributed around the world, including Asia, Europe, South America and North America.

It seems plausible that these and other interoperable Lightning Network implementations could be, one day, operational on the Bitcoin blockchain, but the developers are cautious about committing to a specific timeline.

“Our next steps are to continue testing and work as quickly as we can toward a mainnet beta, where users will be able to use small amounts on the Bitcoin mainnet,” Stark told Bitcoin Magazine.

Decker’s focus will be on the completion of the clients and individual releases “as quickly and safely as possible.” He emphasized that taking a patient approach and focusing on security is key. "We don't make any promises besides. We do not release immature software out of respect for our user's funds."

The Lightning Network is an overlay network built on top of an existing blockchain, in this case the Bitcoin blockchain. Similar to how the internet is built in layers, Lightning Network implementations create a new off-chain, high-throughput layer to channel near-instant payments. Interoperability will enable a single Lightning Network where payments are seamlessly routed without being isolated or incompatible.

Limited scalability is one of the main problems plaguing current Bitcoin technology. In fact, the current Bitcoin blockchain can only process a few transactions per second, far below the thousands of transactions per second processed by the main credit card payment networks. Therefore, following the first Bitcoin Lightning Network white paper, published in February 2015, developers have been working on Lightning Network implementations to enable bitcoin scalability, efficient micropayments and near-instant transactions.

This page on Github shows the latest integration test results for the three Lightning implementations.

“As we move towards a final 1.0 version of the specification, we invite the broader community to provide peer review and feedback,” concludes the announcement. “We look forward to continue working together to build the future of Layer 2 scalability technology.”



The post Developers Release Lightning Protocol 1.0; Perform Successful Interoperability Tests appeared first on Bitcoin Magazine.

Bitfinex Critics Prepare for Possible Legal Action After Cryptocurrency Exchange Lawyers Up

Tue, 12/05/2017 - 16:09

Bitfinex, the world’s largest cryptocurrency trading platform, has hired Steptoe & Johnson, a heavy-hitting, international law firm based in Washington, D.C., to try to put an end to what their PR firm calls “a campaign of mistruth.”

According to an earlier statement issued by Ronn Torossian, CEO of 5W, the PR company representing the exchange, Bitfinex is “signaling to those who engage in this activity that they are serious about protecting the truth and their business.”

Steptoe & Johnson is known for its work in the digital currency space. The firm leads the Blockchain Alliance, a coalition of blockchain companies and U.S. and international law enforcement agencies around the world.

Although Bitfinex did not spell out exactly whom it was threatening to take legal action against, the announcement comes at a time when blogger Bitfinex’ed has been persistently denouncing the company in a series of detailed Medium posts and ongoing tweets. Other critics have been taking their swings at Bitfinex as well.

“To date, every claim made by these bad actors has been patently false and made simply to agitate the cryptocurrency ecosystem,” Stuart Hoegner, in-house counsel for Bitfinex, said in the announcement. “As a result, Bitfinex has decided to assert all of its legal rights and remedies against these agitators and their associates.”

The Backstory

Bitfinex, incorporated in the Virgin Islands, is closely tied to cryptocurrency company Tether, based in Hong Kong. Both companies are owned and operated by the same individuals, as revealed in recently leaked documents.

Tether issues a token (USDT) that is pegged, or tethered, to the U.S. dollar. Essentially, one USDT is supposed to represent one dollar. By trading their bitcoin or other cryptocurrency for USDT, traders can essentially park their funds in a stable asset to preserve capital. In that sense, Tether works something like a money market account. Tether also allows traders to move their money between exchanges without going through a bank.

Bitfinex does not support bitcoin-to-fiat trading or withdrawals, so if traders on Bitfinex want to sell their bitcoin for fiat, they would have to transfer their bitcoin to a regulated exchange like U.S.-based Coinbase, which links to users’ bank accounts, allowing them to make direct fiat deposits and withdrawals.

In August 2016, Bitfinex was hacked, losing 120,000 BTC, worth roughly $72 million at the time. Rather than declare bankruptcy, the exchange came up with a three-part strategy. First, it spread the loss out evenly among all its customers, giving everyone a 36 percent haircut and then issuing “BFX tokens” as I.O.U.’s to be redeemed at a later date.

Next, in mid-October, Bitfinex offered to allow its customer to convert their BFX tokens to equity in iFinex, the parent company that operates Bitfinex. As a result, roughly a third of all BFX tokens were converted. Finally, in April 2017, Bitfinex bought back all of the remaining BFX tokens and announced it was clear of debt.

Allegations and Concerns

At issue right now is the fact that more than 800 million USDT are in circulation, but so far, Tether has not shown any real proof that it has the money to back up those tokens.

Bitfinex’ed claims Bitfinex/Tether is creating that money out of thin air. He also claims Bitfinex is manipulating the markets through techniques such as spoofing — where a trader puts in a large bid or ask order to make the price of bitcoin go up or down before canceling the order — and wash trading, where an asset is bought and sold simultaneously to give the impression it is in more demand than it actually is.  

He also argues Bitfinex is operating a Ponzi scheme, paying back its debt through accounting tricks, to avoid becoming insolvent after it was hacked in August 2016.

But while Bitfinex is trying to protect its image by threatening legal actions against its critics, Stephen Palley, an attorney at Anderson Kill in Washington, D.C., who focuses on software development, thinks Bitfinex would do better by simply being more transparent.

“Why don’t they just open their books?,” he told Bitcoin Magazine. “What are they afraid of? They are going to have to do that in discovery and litigation anyhow.”

To win in court, Bitfinex would have to prove that the blogger was making claims that were false and unsubstantiated, which would require them to come clean themselves.

“It looks to me like they are using heavy-handed intimidation tactics to shut down someone they claim is inconsequential,” said Palley.

Bitfinex’ed recently tweeted his bitcoin wallet address and said he is seeking donations to defend himself against possible upcoming litigation. One person has already donated 1 BTC (currently worth $11,500).

“This is bloody bananas,” Bitfinex’ed told Bitcoin Magazine, in response to the hiring of Steptoe.

The blogger cited a previous lawsuit filed by Bitfinex, which he claims the exchange had no plans of following through on. In April 2017, Bitfinex filed a lawsuit against Wells Fargo for suspending its U.S. dollar wire transfers. That suit was withdrawn a week later.

“Best to be prepared,” Bitfinex’ed said. “If this is [a] big bluff on their end then money goes to charity, I can't hold the bitcoins while whistleblowing.”

The post Bitfinex Critics Prepare for Possible Legal Action After Cryptocurrency Exchange Lawyers Up appeared first on Bitcoin Magazine.

Bitcoin Exchanges Are Favorite Targets of Global DDoS Attacks: Report

Tue, 12/05/2017 - 09:57

Imperva Incapsula, a cloud-based service provider, has released a comprehensive report titled “Q3 2017 Global DDoS Threat Landscape.” The report shows that cryptocurrency operators and Bitcoin exchanges are favorite targets of distributed denial of service (DDoS) attacks.

A DDoS attack is defined as a persistent DDoS event against the same target (e.g., IP address or domain). A single attack is preceded by a quiet (attack free) period of at least 60 minutes and followed by another quiet period of the same duration or longer. Previous Imperva reports had considered DDoS attack bursts separated by 10 minute quiet periods, but then increased the quiet period time threshold to 60 minutes in order to aggregate successive attacks.

DDoS attacks can be either network layer attacks that cause network saturation by consuming much of the available bandwidth or application layer attacks that bring down a server by consuming much of its processing resources (e.g., CPU or RAM) with a high number of requests; they are often facilitated by DDoS botnets. DDoS bots often masquerade as browsers (human visitors) or legitimate bots (e.g., search engine crawlers) to bypass security measures.

The Imperva report is based on data from 3,920 network layer and 1,755 application layer DDoS attacks on websites using Imperva Incapsula services from July 1, 2017, through September 30, 2017. Information about DDoS botnets was gathered by analyzing data from 37.4 billion DDoS attack requests collected over the same period.

Network layer DDoS attacks are measured in Mpps (million packets per second) and Gbps (gigabits per second), which indicate, respectively, the rate at which packets are delivered and the total load placed on a network. Five percent of network layer attacks reached 50 Mpps, while the largest peaked at 238 Mpps.

Application layer DDoS attacks are measured in RPS (requests per second), and the overall impact also depends on the amount of workload that a single request can force on a target server. The main difference between the two DDoS-attack types is that one will target network connections and the other will target computing resources; each requires a different set of security methods for risk mitigation.

The report noted that the cryptocurrency industry continues to be a frequent target of DDoS attacks, more so than many larger industries. In fact, three out of every four bitcoin sites were attacked in Q3 2017.

“[We] saw attacks targeting a relatively high number of cryptocurrency exchanges and services,” states the report. “This was likely related to a recent spike in the price of bitcoin, which more than doubled in the span of the quarter. Overall, more than 73% of all bitcoin sites using our services were attacked this quarter, making it one of the most targeted industries, despite its relatively small size and web presence.”

Other sectors frequently targeted by DDoS attacks are internet service providers and online gambling and gaming operators.

For network layer DDoS attacks, the U.S., China, Hong Kong and the Philippines are among the top five countries, in terms of both number of attacks received and number of targets. Germany is also frequently attacked, with 12.8 percent of the total number of DDoS attacks.

Hong Kong had only 5.1 percent of targets but was targeted by almost a third of all network layer attacks in Q3 2017. This was largely due to a large-scale campaign against a local hosting service provider which was hit more than 700 times throughout the quarter.

For application layer DDoS attacks, the U.S. had both the highest number of attacks and the highest number of targets, with the Netherlands coming in a distant second. The largest application layer attack targeted a financial services company headquartered in Europe, which was hit multiple times. The remainder of the list include developed countries with mature digital marketplaces, such as Singapore, Japan and Australia.

Identifying the origination of DDoS bots is difficult because the practice of faking a source IP — called IP spoofing — can make IP geo-data collected during DDoS attacks unreliable. IP spoofing is only possible for network layer attacks, however, since full TCP connections must be established before sending requests in application layer attacks. Thus, only data from application layer attacks was used to identify bot location.

In Q3 2017, 17 percent of botnet traffic originated in China, which represents a significant drop from the previous quarter, when China was the source of 63 percent of botnet traffic. Turkey and India are on the rise and account for 7.2 and 4 percent of botnet traffic respectively. China remains the top location of attack devices with over 40 percent of the total.

Application layer attack traffic generated by bots that can bypass cookie challenges increased to 6.4 percent in Q3 2017 from 2.1 percent in the previous quarter. Of these bots,1.8 percent were also able to parse JavaScript, an increase from 1.4 percent in Q2 2017.

The post Bitcoin Exchanges Are Favorite Targets of Global DDoS Attacks: Report appeared first on Bitcoin Magazine.

Ether Price Analysis: Potential Reaccumulation Phase Could Push Stronger Highs

Mon, 12/04/2017 - 16:10

Since its rapid ascent from $8 to the $400s, ether has seen a fair amount of volatility. Over the last few weeks, there has been a surge in volume as it pushed out of its multi-month trading range:

Figure 1: ETH-USD, 12-Hour Candles, Macro Trend

The several months ether spent consolidating appears to have formed a macro Reaccumulation Phase that led to a breakout of the trading range on strong volume; ultimately yielding our current market position in the $450s.

A Reaccumulation Phase is a pause after a strong uptrend that attempts to shake out weak shareholders as the market consolidates toward the stronger holders of a given commodity. A Reaccumulation Phase is intended to torture the weak holders of a commodity into ultimately relinquishing their market share to the stronger market players, before a strong, upward continuation of the previous trend kicks back in.

Some of the characteristics of a Reaccumulation Phase include strong buyback on the dips with high volume and wide candle spread:

Figure 2: ETH-USD, 12 HR Candles, Volume and Price Movement

When analyzing trading ranges, it is paramount to contextualize the price movement and the volume. Doing so reveals the intent of the larger market players and will help give traders insight into the potential strength (or weakness) of their investments. Throughout the length of the trading range, it is common to see several tests of both the upper and lower boundaries (the blue horizontal lines).

One key trait we are looking for when identifying a Reaccumulation Phase is the increase in volume as the stock (or coin in our case) begins to rally toward the latter end of the trading range:

Figure 3: ETH-USD, 12 Hour Candles, Trading Range Breakout

Although the current market trend is somewhat consolidating in these higher price levels, it is a very bullish sign that we have broken out of the trading range and done so on increasing volume. This trend shows that the market is now dominated by demand and all the free-floating supply has been absorbed. As the market begins to test new highs, wait for volume to increase to confirm strength in the upward direction.

Summary:
  1. ETH-USD broke out of a potential, multi-month reaccumulation phase.

  2. Increasing volume on the move out of the trading range gives us confidence in a bullish continuation.

Trading and investing in digital assets like bitcoin and ether is highly speculative and comes with many risks. This analysis is for informational purposes and should not be considered investment advice. Statements and financial information on Bitcoin Magazine and BTC Media related sites do not necessarily reflect the opinion of BTC Media and should not be construed as an endorsement or recommendation to buy, sell or hold. Past performance is not necessarily indicative of future results.

The post Ether Price Analysis: Potential Reaccumulation Phase Could Push Stronger Highs appeared first on Bitcoin Magazine.

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