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China will add offshore cryptocurrency exchanges and ICO websites to its Great Firewall, the South China Morning Post reported Monday, reported Feb. 5, quoting a publication affiliated with the People’s Bank of China (PBoC).

Regulators in China reportedly voiced dissatisfaction with current measures restricting trading on domestic exchange sites, coming to a decision to block foreign sites as well to counter “financial risks”.

In January, a fresh crackdown from Beijing saw fringe trading platforms such as P2P and over-the-counter resources banned, adding to a blanket embargo on crypto-to-fiat trading and ICOs in place since September 2017.

At the same time, mixed signals have been given over the status of cryptocurrency mining, while Monday’s website block comes after Cointelegraph reported that ads relating to cryptocurrency had all but disappeared from domestic sites in China.

Now lawmakers say they wish to counter contingency moves from traders who sought to circumventthe trading ban by using foreign platforms.

“To prevent financial risks, China will step up measures to remove any onshore or offshore platforms related to virtual currency trading or ICOs,” the South China Morning Post quotes the PBoC-related publication as saying. The quote continues:

“ICOs and virtual currency trading did not completely withdraw from China following the official ban… Overseas transactions and regulatory evasion have resumed… [R]isks are still there, fuelled by illegal issuance, and even fraud and pyramid selling.”

 

 


Source : https://cointelegraph.com/news/ban-complete-china-blocks-foreign-crypto-exchanges-to-counter-financial-risks
China will add offshore cryptocurrency exchanges and ICO websites to its Great Firewall, the South China Morning Post reported Monday, reported Feb. 5, quoting a publication affiliated with the People’s Bank of China (PBoC).

Regulators in China reportedly voiced dissatisfaction with current measures restricting trading on domestic exchange sites, coming to a decision to block foreign sites as well to counter “financial risks”.

In January, a fresh crackdown from Beijing saw fringe trading platforms such as P2P and over-the-counter resources banned, adding to a blanket embargo on crypto-to-fiat trading and ICOs in place since September 2017.

At the same time, mixed signals have been given over the status of cryptocurrency mining, while Monday’s website block comes after Cointelegraph reported that ads relating to cryptocurrency had all but disappeared from domestic sites in China.

Now lawmakers say they wish to counter contingency moves from traders who sought to circumventthe trading ban by using foreign platforms.

“To prevent financial risks, China will step up measures to remove any onshore or offshore platforms related to virtual currency trading or ICOs,” the South China Morning Post quotes the PBoC-related publication as saying. The quote continues:

“ICOs and virtual currency trading did not completely withdraw from China following the official ban… Overseas transactions and regulatory evasion have resumed… [R]isks are still there, fuelled by illegal issuance, and even fraud and pyramid selling.”


Source : https://cointelegraph.com/news/ban-complete-china-blocks-foreign-crypto-exchanges-to-counter-financial-risks

Digital money platform Uphold today announced it has received a $57.5 million investment from former Fed Reserve senior analyst and Ripple chief risk officer Greg Kidd.

Kidd, who will join Uphold's board of directors, will also help fund the creation of a research and development arm, to be called Uphold Labs, through his investment vehicle Hard Yaka. Kidd has previously invested in Coinbase, Square and Twitter.

In a statement, the investor praised Uphold's scalability, as well as its compliance practices.

In addition to forming Uphold Labs, the investment will help fill Uphold's loss assurance to roughly 20 percent of its crypto holdings, protecting its users from potential losses due to cryptocurrency volatility or other issues.

Kidd told CoinDesk:

"Because of the strength of Uphold's compliance and controls, I'm willing to pledge a certain amount of my balance sheet, or the balance sheet of my venture company ... as a reserve. That means that if there was some adverse effect at Uphold that might put it otherwise in a position of operating as a fractional reserve, this is like an insurance program that will make sure that user balances are protected."

A spokesperson for Uphold said the licensing revenue and development wing will receive 20 percent of the funding, which will be used to add more cryptocurrencies to increase the firm's connectivity to financial systems, as well as for use in Ripple-related projects.

Then, 45 percent will go to equity, and the remaining 35 percent will be shifted to its reserve balance sheet.

The partnership will help Uphold provide "unprecedented asset protection," said chief executive Adrian Steckel.

Formerly called Bitreserve, before its rebrand in 2015, Uphold offers foreign exchange and international remittances in bitcoin and fiat currencies. It also provides e-commerce services.

Michael Del Castillo contributed to this article.

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Coinbase and Ripple. 

Dollar bills image via Shutterstock

Source: https://www.coindesk.com/former-ripple-exec-invests-57-5-million-in-digital-money-platform-uphold/

Brisbane Airport (BNE) will soon become the first cryptocurrency airport terminal, according to reports from local media. The airport is working with local and international companies to make the entire terminal cryptocurrency friendly, with stores, coffee shops and restaurants accepting BitcoinEther and Dash.

The move to digital currencies makes sense for the airport, as the number of crypto investors increases. According to Roel Hellemons, the General Manager of Strategic Planning and Development:

“Many people around the world have made money investing in cryptocurrencies and a lot of these people travel internationally, so it makes sense to offer a digital currency experience within our terminals.”

The airport will partner with TravelbyBit, a cryptocurrency payment system, in order to allow travelers the ability to buy digitally.

The move highlights Australia’s growing warmth toward cryptocurrencies and digital payment methods, in spite of negative perspectives from other countries. With the recent ban from China and the threats from South Korea, the openness of Australian policy will come as a welcome change for crypto investors.

Source: https://cointelegraph.com/news/worlds-first-cryptocurrency-airport-in-brisbane

UK premier league football club Arsenal has made the unlikely step of partnering with an ICO for official sponsorship.

As various media outlets report Thursday, the London-based club will now feature promotion of the forthcoming ICO from US mobile gambling app CashBet.

The little-known operator plans to raise up to $70 mln through distribution of its CashBet Coin token, with its ongoing pre-ICO phase set to end Feb. 20.

In an accompanying press release, CashBet describes itself as Arsenal’s “exclusive and official Blockchain Partner.”

While some reports suggest the deal is the first of its kind in the sporting world, Dec. 2017 actually saw Bitcoin Suisse begin a three-year sponsorship of Danish hockey team Rungsted Seier Capital.

The full-on Bitcoin injection saw Bitcoin Suisse rename the team’s home stadium to Bitcoin Arena and promise to pay its top player solely in Bitcoin - another world first in sport.

Despite the mixed reputation of ICOs which continues, Arsenal’s chief commercial officer appeared unfazed.

We are pleased to welcome CashBet Coin as our partner. We are looking forward to working with CashBet Coin as they launch their new cryptocurrency,” Vinai Venkatesham said in a further release.

Source: https://cointelegraph.com/news/token-gesture-arsenal-football-club-to-promote-mobile-gambling-ico

South Korean Bitcoin “investors” allegedly launched the DDoS attack that shut down Weiss Ratings’ website after the agency gave the cryptocurrency a ‘C+’ rating.

According to a press release citing “numerous mentions on social media” about plans to attack Weiss, staff were “up all night” attempting to restore normal service after the release of ratings for Bitcoin and other cryptocurrencies Thursday.

Earlier commentary on social media expressed considerable fear we were about to release negative ratings on their preferred currencies,” founder Martin D. Weiss commented, “so this may be an attempt to thwart our release today.

No cryptocurrency managed to gather an ‘A’ on Weiss’ list, while the rating agency’s other conclusions also drew criticism from commentators.

Bitcoin Cash fared only slightly worse than Bitcoin itself with C-, while Ethereum scored a B and Dogecoin C, placing it similarly just below Bitcoin in terms of providence.

All else being equal, as a cryptocurrency overcomes its individual challenges, it's likely to be upgraded promptly,” Weiss himself nonetheless added adopting a somewhat more bullish tone.

In the week of the 2018 World Economic Forum in Davos, legacy finance entities are delivering curious appraisals of cryptocurrency as it faces its most mainstream year yet.

Former US Secretary of State John Kerry told Cointelegraph that crypto “has value” at the event, while JPMorgan CEO Jamie Dimon privately denied he was a “skeptic” when it came to Bitcoin.

Source: https://cointelegraph.com/news/weiss-ratings-gives-bitcoin-c-sparks-south-korean-ddos-revenge

Two U.S. financial regulators are increasing their agencies' commitment to bringing closer scrutiny to the country's cryptocurrency industry.

In a Wall Street Journal op-ed published yesterday, both the Securities and Exchange Commission (SEC) ands the Commodity and Futures Trading Commission (CFTC) voiced that they are devoting a significant portion of resources to monitoring the industry. And along with other authorities, they will continue to stamp down on fraudulent activities in the market.

The article was co-written by Jay Clayton and J. Christopher Giancarlo – chairs of the SEC and CFTC, respectively – and is the latest public statement from the financial regulators indicating the increasingly strident efforts being made to oversee the industry.

In July last year, the SEC issued the notable announcement that the agency may consider tokens issued during initial coin offerings (ICO) as securities that must be registered with the agency.

 

Yet, in the WSJ piece, Clayton and Giancarlo warned those who might try and circumvent the guidance, saying:

"The SEC is devoting a significant portion of its resources to the ICO market ... Market participants, including lawyers, trading venues and financial services firms, should be aware that we are disturbed by many examples of form being elevated over substance, with form-based arguments depriving investors of mandatory protections."

Further, cryptocurrencies are now being "promoted, pursued and traded as investment assets," while their much-touted utility as an efficient medium of exchange now a "distant secondary characteristic," they added.

The comments are also in line with recent moves by the SEC in halting ICO activities and filingcharges against their organizers. Just last week, the CFTC, which treats cryptocurrencies as commodities, has also notably brought up legal cases to sue allegedly fraudulent cryptocurrency investment schemes.

In addition, Clayton and Giancarlo also voiced support in the article for policies that seek to review existing laws to ensure they can efficiently regulate activities pertaining to cryptocurrency.

"Many of the internet-based cryptocurrency-trading platforms have registered as payment services and are not subject to direct oversight by the SEC or the CFTC. We would support policy efforts to revisit these frameworks and ensure they are effective and efficient for the digital era," the regulators concluded.

US Capitol image via Shutterstock

Source: https://www.coindesk.com/sec-cftc-chiefs-eye-closer-scrutiny-of-us-cryptocurrency-industry/

It has been a depressing fortnight for anybody reading various mainstream headlines touting the ‘end of Bitcoin’ and the arrival of the ‘crypto bubble’ crash. Unsurprisingly, the most recent cryptocurrency market slump has led to naysayers stepping onto their soapboxes, crying out messages of ‘I told you so’.

Their rhetoric is not unfounded, given that the overall cryptocurrency markets have suffered two dramatic corrections in under a month, one just before Christmas and the most recent last week. So-called industry experts have been voicing their opinions in interviews with mainstream media, speculating on the burst crypto bubble without any real evidence to show that the markets are irreversibly damaged.

What we know

A wave of uncertainty in South Korea led to massive sell-off of cryptocurrencies last week, as traders unloaded amid fears of regulatory clamp downs from the government. Those fears were led by misleading reports of an all out cryptocurrency trading ban in a country which accounts for 20 percent of global trades.

It is now understood that South Korea will only ban anonymous trading - meaning people wishing to trade cryptocurrencies need to do so through authorised exchanges using a registered bank account. Furthermore, foreigners and minors in the country are now prohibited from cryptocurrency trading, while the government will tax exchanges in line with existing policies.

This was coupled with murmurs of further regulatory moves in China, which has already banned cryptocurrency exchanges in the country. Unsurprisingly, the markets reacted as they would with any hint of bad news, which has led to bearish attitude.

Banks, financial institutions still wary

Financial service giant UBS is particularly bearish towards Bitcoin. Speaking at the World Economic forum this week, chairman Axel Weber said the company had advised clients to steer clear of investing in Bitcoin. In an interview with CNBC, Weber said:

“Retail clients, who don’t fully understand these products, should be protected from going into these products, because if there is a retail client affected in the future, the question will be again who was the bank that sold them these products and then banks will be blamed again for what has happened.”

Weber went on to say that the growing interest in cryptocurrencies around the world will inevitably lead to further regulation. Regulations, as he told Bloomberg in another interview, could lead to further market corrections.

Earlier this week, Wall Street analyst Peter Boockvar suggested that Bitcoin could drop as low as $1000 in 2018. He also attributed the rise in popularity of cryptocurrencies to their inflation-proof nature and scarcity.

Governments hold the future of cryptos

One theme that is becoming increasingly clear is that mainstream investment institutions are still worried about regulations crippling the future of cryptocurrencies. As Weber noted in his interview with Bloomberg, investors’ interest is always piqued by growth in value of any asset. He admits that cryptocurrencies have not gone unnoticed, but the uncertainty of their future is too risky for institutional investors to go in 100 percent.

However, what goes unspoken by critics is that any positive moves by countries could bring about exponential growth and adoption of virtual currencies. This year undoubtedly holds a lot in store, and it seems far too early in the year for people to be writing off every single cryptocurrency.

Source: https://cointelegraph.com/news/what-the-fud-bitcoin-market-beset-by-january-woes

iGaming platform provider CashBet has partnered with Arsenal Football Club in a deal that will promote the firm's new crypto token.

The British Premier League team's sponsorship deal with the iGaming platform provider is claimed to be the first collaboration between a major sports team and a cryptocurrency provider.

The agreement will see the company's new token, CashBet Coin, being advertised at Arsenal's Premier League home games at the Emirates Stadium in London, while CashBet can use the Arsenal brand across its ICO promotions.

CashBet CEO and founder Dr. Mike Reaves said in a press release yesterday:

 

"With our ICO for CashBet Coin, we are actively targeting a global, multi-billion dollar marketplace of iGaming content providers, operators and players.We are delighted to do so in partnership with one of world football's true giants in Arsenal, enabling us to build our brand and engage this audience in a meaningful way."

CashBet Coin is intended for use across the company's gaming platform and the company hopes the sale will raise between $40 million–$70 million. The ICO presale kicked off yesterday and will end on Feb. 20 unless the hard cap is reached before that date. The public sale will be held from March 20 to April 27.

Reaves explained in a different release that the introduction of the token will enable operators to solve major problems facing cryptocurrency-based casinos: "speed, trust, and cost."

Integrating blockchain into the CashBet platform will open new markets by "democratizing access" for a new group of users currently underserved by the banks, he continued. Further, the addition of the token is expected to make the platform more scalable and cost-efficient.

Arsenal Stadium image via Shutterstock

Source: https://www.coindesk.com/arsenal-football-club-signs-deal-to-promote-igaming-firms-ico/

Canada’s Hydro Quebec will have to turn away cryptocurrency miners looking to setup operations in the province. The electricity supplier has been inundated with requests from cryptocurrency miners looking to setup operations in energy-rich province Quebec, according to Reuters.

Many miners, including giants like China-based Bitmain, have made it clear that they are looking to setup new mining operations overseas in countries with low power costs and surplus of energy. The crack down on cryptocurrency exchanges in China, as well as talks of power regulations applying to miners, has prompted miners to consider new sites to operate from.

Bitmain told Reuters that it has been mining in Canada since 2016, although the location of their Canadian operation was not revealed.

Canada’s surplus isn’t enough

Ironically, Hydro Quebec may have to renege on its commercial power strategy - as forecasts show that they would not be able to meet the booming demand of industries looking to take advantage of the energy surplus in the province. The company is reviewing its plans after 70 cryptocurrency mining operators applied to set up shop in the province in the space of the week.

Hydro Quebec claims to have a surplus of 100 terawatt hours over 10 years. As a reference, Digiconomist’s Bitcoin Energy Consumption Index estimates the combination of Bitcoin and Bitcoin Cash’s estimated annual electricity consumption around 31 terawatt-hours

Not enough power

The utility supplier’s spokesman, Marc-Antoine Pouliot, told Reuters that the sheer number of companies looking to start cryptocurrency mining operations in the province is not sustainable, even with the surplus created by Hydro Quebec.

“We are receiving dozens of demands each day. This context is prompting us to clearly define our strategy. We won’t be able to power all the projects that we’re receiving. This is evolving very rapidly so we have to be prudent.”

The utility has also been actively attracting data centers to the province since 2016, citing the potential for job creation by these centers.

In an earlier interview with Reuters, HQ business development director David Vincent said potential mining operators were looking at sites with energy demands ranging from those of data centers to that of power-hungry as metal smelting plants.

Another stumbling block in the way of cryptocurrency operations being established is the lack of buildings ready for occupation.

Source: https://cointelegraph.com/news/even-with-energy-surplus-canada-unable-to-meet-electricity-demands-of-bitcoin-miners

Just a week after the abrupt closure of BitConnect's lending and exchange platform, investors are seeking legal action to claim back their funds, according to public document.

The class action case (see below), filed with the Southern District Court of Florida on Jan. 24, alleges that BitConnect issued cryptocurrency tokens that were effectively unregistered securities and gathered additional funds as a "wide-ranging Ponzi scheme."

In light of the recent closure of BitConnect after receiving two cease-and-desist orders by U.S. state regulators, the plaintiffs are seeking to claim back the investments they put into the company.

The document states that BitConnect launched several projects, such as a lending program that required investors to send in cryptocurrencies to purchase BitConnect Coin, a token generated by the company's platform.

 

BitConnect then allegedly promised investors that its proprietary trading platform would use the funds to generate a monthly return of 40 percent or a daily compound rate at 1 percent, which could amount to 3,000 percent annually.

As such, the plaintiffs argue that BitConnect violated the Securities Act by issuing unregistered securities. The document further points to a statement claimed to be taken from BitConnect's website:

"This investment option involves profiting from BitConnect trading bot and volatility software. You will receive daily profit based on your investment options. Upon investment term completion, you will receive your capital back to take out from the BitConnect lending platform or optionally reinvest back in lending platform to continue receiving daily profits."

Yet the plaintiffs further allege that, instead of genuinely using the funds for cryptocurrency trading, BitConnect operated as a Ponzi scheme and took funds from additional investors to realize the promise for existing investors.

According to the document, six individuals filed the case on behalf of all investors and account holders who have transferred funds – both cryptocurrencies and fiat – to BitConnect for investment. While it's unclear based on the document how much in assets the whole class put in, the six named individuals said their loss totaled $771,000.

As reported previously, BitConnect's closure came after two cease-and-desist orders from the Texas and North Carolina securities regulators, which subsequently led to a 90 percent plunge in the price of its BitConnect Coin, which is traded on several cryptocurrency exchanges.

At press time, BitConnect had not responded to a CoinDesk email request for comment.

Class Action Complaint (BitConnect) by CoinDesk on Scribd

Judge's gavel image via Shutterstock

Source: https://www.coindesk.com/investors-file-class-action-against-bitconnect-following-abrupt-closure/

The applications of Blockchain technology are potentially endless - and every year we are hearing more uses in business and trade. Cryptocurrencies remain in the limelight but that hasn’t stopped multinational companies from forging ahead with their own Blockchain solutions in an effort to streamline business.

As it so happens, a new milestone has been reached by mainstream industries in 2018. In a first for the global agricultural industry, a cargo shipment of soybeans has been completed using Blockchain technology. The trade was carried out digitally using Easy Trading Connect (ETC) Blockchain platform, according to Reuters. ETC incorporated a number of contracts and certificates needed for the international trade of agricultural products.

Deeper look

The shipment from America to China involved five different parties including Louis Dreyfus Co, Shandong Bohi Industry Co, ING, Societe Generale and ABN Amro.

The Louis Dreyfus Company, a multinational agricultural merchant, has hailed the use of Blockchain technology in trade due to its efficiency. The company’s head of trade operations, Robert Serpollet, estimated that the use of Blockchain to process the contracts and certificates greatly reduced the usual time it would take for a trade like this to be approved.

“We noticed very significant efficiency gains far beyond what we expected.”

Using the ETC platform, Bohi bought the shipment of soybeans from Louis Dreyfus - while various banks provided the credit certificates needed for the sale. The shipping companies took care of the necessary paperwork needed for the shipment and the US Department of Agriculture was involved in providing certificates for the sanitation requirements.

Anthony van Vliet, who heads up ING’s trade and commodity finance, believes the use of Blockchain in this specific industry could well be widely adopted due to its cost-saving benefits.

“This is key as we operate in a business that has high volumes and very low margins. If not months, then in a year or at max two, I think the world in this space will look quite different.”

A new use-case

Blockchain technology is mostly used as the backbone for transactions, like Bitcoin and other cryptocurrencies. However, as Ethereum pioneered, it can be used in more technical ways, like the inclusion of contracts that can be carried out by the Blockchain.

As this latest soybean use-case proves, a number of different parties can be involved in a complex business transaction. By using Blockchain technology, the process is sped up while becoming cheaper - which will no doubt be a draw for other businesses. Using a Blockchain platform also keeps all stakeholders involved and informed throughout the process.

Source: https://cointelegraph.com/news/worlds-first-major-agricultural-trade-using-blockchain-completed-resounding-success

Blockchain Capital announced today that bitcoin developer Jimmy Song has joined the company as a venture partner.

With his expertise around cryptocurrency technology, Song's addition is aimed to provide technical assistance to the firm's investment research efforts, as well as build bridges between Blockchain Capital and crypto developers, according to a press release. He will also head upcoming programs to advance blockchain innovations.

The blockchain industry has been evolving differently from the internet, stated co-founder and managing partner of Blockchain Capital, Bart Stephens. This difference, he said, has made possible for developers and engineers to stand at the forefront of innovation.

With Song's addition to the firm, Stephens continued:

 

"Jimmy has demonstrated a deep commitment to the crypto development community. These 'unsung heroes' push the innovation envelope and bring to market much of the technology and services that comprise the blockchain and crypto industry today."

Aside from his bitcoin development work, Song has served as a principal architect at blockchain firm Paxos, as well as vice president of engineering at open-source wallet management platform Armory Technologies.

At present, Song also runs a training company called Programming Blockchain, that provides blockchain programming and development training. He is also the author of "Bitcoin Tech Talk," a cryptocurrency-focused blog.

With his new role, Song stated that his passion for cryptocurrency industry grew two years after bitcoin was founded in 2009.

"At that time, the community was relatively small and comprised of a core group of developers willing to volunteer their time and intellectual capital for the good of the industry. Now, the ecosystem has soared past numerous milestones," he said.

Shaking hands image via Shutterstock

Bitcoin bulls seem to have gained an upper hand, but the cryptocurrency is still struggling to find follow-through buying today.

On Wednesday, CoinDesk's Bitcoin Price index (BPI) closed (as per UTC) 5.15 percent higher at $11,399. The positive close above $11,000 adds credence to the solid defense of the $10,000 mark seen earlier this week.

That said, the follow-through is not necessarily encouraging.

The BPI clocked a high of $11,711 at 03:59 UTC today before falling back below $11,200. As of writing, the BPI stands at $11,350. The cryptocurrency has appreciated by 3 percent in the last 24 hours, says data source OnChainFX.

Bitcoin chart - Bull reversal confirmed

btc daily 2

  • The bullish doji reversal at the key support of $10,391.02 (50 percent Fibonacci retracement of 2017 low to 2017 high) validates the argument that BTC has built a base around $10,000 and points to a short-term bearish-to-bullish trend change.
  • The 5-day MA and 10-day MA carry a bearish bias and could limit the upside in BTC.

A bullish doji reversal occurs when a doji candle (as seen on Tuesday) is followed by a positive price action (yesterday's 5 percent gain).

So, the short-term outlook is bullish. Still, there is merit in being cautious.

Comments on social media indicate the investor community is not convinced by previous day's bullish price action and wants to see a sustained move above $11,500 before calling a bottom. The argument has substance says the chart below.

4-hour chart

btc 4 hour 1

The above chart (prices as per Coinbase) shows-

  • Bitcoin witnessed a solid recovery on Jan. 17 from the low of $9,005 on the back of strong volumes.
  • However, volumes have dropped in the subsequent days. This could be the reason behind bitcoin's failure to rise above the falling trendline hurdle on Jan. 20 and Jan. 21.
  • BTC has had another go at the trendline resistance today, but once again volumes remain low.
  • Higher lows as represented by the rising trendline.

View

  • Bullish doji reversal was confirmed yesterday, but so far bitcoin has been unable to generate the follow through necessary to declare that the bottoming process is complete.
  • Only a high volume break above the trendline resistance on the 4-hour chart would add credence to the bullish doji reversal and open doors for a sustained move higher to $13,000 and $14,250.
  • On the other hand, rejection at the falling trendline followed by a high volume drop below $10,300 (rising trendline support on the 4 - hour chart) could yield re-test of last week's low of $9,005.
  • That said, only a daily close (as per UTC) below $10,391.02 (50 percent Fibonacci retracement of 2017 low to 2017 high) would revive the bearish outlook.

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Coinbase.

Dollar bills via Shutterstock

Source: https://www.coindesk.com/bitcoin-bull-reversal-sighted-momentum-proves-weak/

"We look at ethereum like AOL or Myspace."

That's how Mobius Network co-founder and CEO David Gobaud explains why his startup ran its initial coin offering (ICO) on the Stellar network instead of ethereum, the most popular blockchain for token sales.

The comment underscores the growing interest in some corners of the crypto community for faster and cheaper payment rails as ethereum, like bitcoin, struggles to scale.

Mobius announced Thursday that it has raised $39 million in the ICO — one of the larger recent token sales and the largest by far on the Stellar platform. The company accepted only Stellar's native currency, lumens (XLM), in exchange for its own token, known as mobi.

 

According to Mobius, the sale hit its $39 million hard cap after only two hours, selling 35 percent of the total 888 million mobi tokens.

Participants in the round included China's Angel Chain Capital, Nirvana Capital and WaltonChain, an internet of things (IoT) startup that is building devices to enable manufacturers and retailers to track supply chains, according to the firm's website.

In addition to this backing, Gobaud emphasized that Mobius deployed its decentralized app (dapp) store alongside its ICO, saying it was important for the company to come out with live code early, to prove the project was real.

But what's perhaps most striking about the sale was the choice of blockchain.

While latency or cost might not be a dealbreaker for some blockchain projects, they are for Mobius' use case. Its thesis is that traditional tech companies will soon want to integrate with cryptocurrencies and, eventually, a decentralized web.

Mobius' white paper compares the company's work to that of Stripe, the Silicon Valley darling that took integration of credit card payments down to a few lines of code (and incubated Stellar in its early days). Mobius aims to do the same thing for cryptocurrency payments and, down the line, for publishing data to trade on decentralized marketplaces.

So the company needed an IoT-friendly network that could handle large amounts of transactions and data quickly, with low or no fees.

The goal is to "make it easy to connect every device, developer and data stream to the blockchain ecosystem," Gobaud said.

Yet while the vast majority of ICO-funded projects have been run on top of ethereum, using the ERC-20 standard, that blockchain has suffered from transaction backlogs and pendulum-like swings in fees.

Hence, after beginning its project on ethereum, Mobius switched to Stellar, the protocol created by Ripple co-founder Jed McCaleb. Like Ripple before it, Stellar was designed specifically for frictionless payments.

Trade-offs

Ethereum's scaling challenges have become acute in recent months. The issue moved Kik to announce that it would move its kin token off ethereum in December 2017.

While the ethereum developers recognize and are working on the problem, the Mobius team couldn't wait for a scaling solution, Gobaud said.

"We were building our dapp store on ethereum and then we connected with Jed," he said adding:

"We realized there was no way that ethereum could handle our technology. It was too slow, too expensive and too insecure. ... We see all these other projects with these immense problems"

Gobaud highlighted the problems with safely deploying smart contracts. "They are Turing completeprograms, but they are really hard to write," he said, pointing to the first and second multi-million-dollar ether losses on Parity. Solidity was not a language built with security in mind, Gobaud argued.

In Stellar, "we think we've uncovered this underutilized, really unknown technology," Gobaud said.

For example, Stellar supports multi-signature wallets at the protocol level, making custodianship much easier for developers.

But Stellar has its downsides, Gobaud acknowledged. It's not Turing complete, for example, but Mobius is happy to make that trade-off in exchange for vastly faster and cheaper transactions.

What's next?

The white paper discusses a lot of use cases for the mobi token and its protocol, but the easiest one to explain is payments.

For anyone who believes that cryptocurrency will become more and more appealing to online businesses, the company that makes transacting in crypto easy the fastest stands to recoup benefits with a long tail.

If Mobius can make accepting crypto payments a matter of adding a few lines of code, that would be compelling if online companies begin accepting cryptocurrency more widely.

Talking to Gobaud, though, payments seems more like a way to sell the traditional internet on blockchain integration.

He's most excited about the market that will come when firms start posting their data to decentralized marketplaces, selling it via secure, live auctions he calls the "NASDAQ for data."

Gobaud said:

"More advanced or technical users are really excited about the data marketplace because they are aware that getting data into blockchain ecosystem is really complicated."

Data generated on blockchain protocols is easy to verify because they are closed environments. But data from the real world can't be verified on a blockchain without help.

That's why Mobius is building a proof-of-stake oracle system, so that data streams with data from the real world can build up reputations as reliable sources over time. With the system, to put its data up for sale on the market, a company would have to prove it holds a certain amount of tokens.

If that marketplace catches on, the cost of staking should be more than paid for by revenue from selling data over time. This could be anything from data about road conditions from a smart vehicle or local weather from a sensor on top of a commercial building.

To reach the point where the decentralized web has a rich enough ecosystem to support these marketplaces, the team is also working to solve other small problems faced by developers on the way there. For example, it built a universal login protocol, where a website can verify that a device holds a token to let its user log on to a service.

Some sites might want to take this a step further and use tokens to integrate the level of access someone has to a site. So, on a platform like Reddit, a user might only need one token, while a moderator might need a few tokens to log in with more advanced permissions.

In the meantime, developers are already building dapps for Mobius' store, but it's small scale offerings so far, little video games or prediction games. That's work at the experimental level, but Gobaud said he's encouraged by the fact that people already want to work with it. The websites on Geocities were crude, too, but they were a stepping stone to the web we know today.

He concluded:

"It's like the early days of the internet."

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Ripple. 

Mobius strip image via Shutterstock

Source: https://www.coindesk.com/why-a-39-million-ico-chose-stellar-over-ethereum/

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