“Get Ready for Bitcoin $20K” as US Fed Panic-Prints $53B

Bitcoin (BTC) could soon shoot to $20,000 as a result of emergency measures from the United States Federal Reserve, also known as The Fed, one of the industry’s biggest firms has said.

Fed echoes 2008 crisis moves

In a tweet on Sept. 18, Arthur Hayes, CEO of derivatives giant BitMEX, forecast that fresh quantitative easing (QE) would further decrease faith in fiat currency.

The comments come a day after the Fed swooped to decrease interest rates on some loans which reached more than 10%, or four times its target. More than $53 billion was pumped into the economy. 

“QE4eva is coming. Once the Fed gets religion again, get ready for #bitcoin $20,000,” Hayes wrote.

The Fed’s QE injection marked its first emergency intervention since the end of the 2008 financial crisis, an event directly leading to Bitcoin’s creation. 

While the cryptocurrency has yet to see a global crisis of the same scale, markets have shown that Bitcoin price benefits from political and economic uncertainty.

Hayes doubles down on Bitcoin price

Not just the Fed, meanwhile, but also the European Central Bank (ECB) is following the QE trend once more this year. 

Completing its latest move last week, commentators believe markets want the ECB to continue the same behavior, giving rise to the “QE4eva” phenomenon described by Hayes.

Earlier this month, Hayes already said Bitcoin would again hit its all-time high of $20,000. As Cointelegraph reported, BitMEX is still grappling with unwanted attention from U.S. regulators, who suspect that Americans are bypassing BitMEX geoblocking and accessing the platform.


from: https://cointelegraph.com/news/get-ready-for-bitcoin-20k-says-bitmex-ceo-as-fed-panic-prints-53b



US Army Seeks Blockchain Experts Who Can Trace Bitcoin in Real-Time

The United States Army Contracting Command (ACC) of New Jersey has issued a pre-solicitation notice for cryptocurrency investigation service providers. 

As a pre-solicitation, posted on July 25, the notice and the ACC’s responses do not bind ACC to solicit or award a contract.

For use in criminal investigations

According to the ACC, the cryptocurrency analytics solution is being sought for use by the U.S. Army Criminal Investigation Command (USACIDC) for use in criminal investigations and other missions.

The notice outlines that the contractor must provide a cloud-based, online service — not reliant on hardware or software — that can assist law enforcement in identifying and pursuing actors using cryptocurrencies for illicit purposes such as fraud, extortion and money laundering.

The contractor should provide the source of the cryptocurrency transactions, with the capacity to offer multi-cryptocurrency analysis from Bitcoin (BTC) to other major cryptocurrencies. 

Other requirements include providing “real-time Bitcoin and other cryptocurrency transaction tracing,” including service attribution and identification, as well as being able to identify transaction patterns and interactions with other entities.

Government and army alike turn to blockchain

In fall 2018, a Diar report had revealed that  U.S. government agencies had tripled their investment in blockchain intelligence firms that year.

The vast majority of 2018 blockchain intelligence government deals were reportedly contracted to New York-based blockchain analytics firm Chainalysis, which had — as of that date — signed deals with government agencies totaling $5.3 million.

This August, Cointelegraph reported that the U.S. Air Force had secured new contracts with smart contract startup Simba Chain and blockchain data management firm Constellation, with a focus on using the technology for supply chain and data management.

Meanwhile, in an interview earlier this month Grammy award-winning music artist and Bitcoin advocate Akon quipped that the value of fiat currencies such as the U.S. dollar is ultimately only sustained by military might.

from: https://cointelegraph.com/news/us-army-seeks-blockchain-experts-who-can-trace-bitcoin-in-real-time






Normalization In The Mainstream: $10K Bitcoin Stronger Than Ever But No One Seems to Care: Google Trends

Bitcoin (BTC) has hit a four-month low this week — as a search term on Google, with market fatigue and boredom spreading beyond traders.

“Bitcoin” least Googled since May

Data from Google Trends confirms that the term “Bitcoin” is less popular now than at any time since the end of April.

Despite the largest cryptocurrency actually trading higher this week than then — at $10,200 versus $4,100 — it appears Bitcoin currently attracts little mainstream interest.

On a normalized scale of 1 to 100, “Bitcoin” currently charts at 38 worldwide, after briefly hitting 100 in late June. That performance coincided with BTC/USD hitting its 2019 high of $13,800.

12-month worldwide Google search popularity for “Bitcoin.” Source: Google Trends

Interest follows price

As Cointelegraph has previously reported, mainstream attention tends to fluctuate in line with Bitcoin price volatility.

Overall searches have rocketed since the beginning of April when Bitcoin price began its rise from months of sideways trading around $3,500.

Other episodes of parabolic moves have likewise increased Bitcoin’s stance, as mainstream media titles frequently choose to cover cryptocurrency price performance over any other event.

BTC/USD has remained similarly flat around the $10,000 since mid-August, while commentators continue to suggest that volatility is ripe to return during the rest of the year.


from: https://cointelegraph.com/news/10k-bitcoin-stronger-than-ever-but-no-one-seems-to-care-google-trends



Bitcoin Is the Fraud? JPMorgan Metals Desk Fixed Gold Prices for Years

The United States’ largest bank faced fresh ridicule from Bitcoin (BTC) circles this week after prosecutors said traders had conducted more market fraud.

As Bloomberg reported on Sept. 16, JPMorgan Chase is facing an inquiry over the behavior of at least a dozen precious metals traders.

JPMorgan performed “thousands” of illegal moves

According to investigators, the employees willfully engaged in price-fixing of precious metals on thousands of occasions. Both market participants and JPMorgan’s own clients suffered losses as a result, they claim.

“Based on the fact that it was conduct that was widespread on the desk, it was engaged in thousands of episodes over an eight-year period… We’re going to follow the facts wherever they lead, whether it’s across desks here or at any other bank or upwards into the financial institution,” Bloomberg quoted Assistant Attorney General Brian Benczkowski as saying.

JPMorgan is well known as being one of the more vocal skeptics of cryptocurrencies. CEO Jamie Dimon became notorious for his soundbites, which began in 2017 when he labeled Bitcoin a fraud in itself.

Dimon since appeared to have a change of heart, pledging not to discuss Bitcoin again in public, while denying he disliked it in private comments to Cointelegraph.

Bitcoin, bankers and fraud

More recently, the bank released its own digital currency offering, JPM Coin, which gained similar criticism over its technical characteristics.

The irony of the precious metals scandal was thus not lost of crypto commentators.

“They were charged with wire fraud, bank fraud, and market manipulation. But I was told by the CEO that Bitcoin is the fraud,” Twitter analyst known as Rhythm summarized.

JPMorgan is not the only bank to issue warnings over cryptocurrency’s alleged fraudulent nature while being embroiled in legal turmoil.

In 2018, Dutch institution Rabobank claimed Bitcoin contained money laundering compliance hazards. Subsequently, authorities fined it $369 million for money laundering.


from: https://cointelegraph.com/news/bitcoin-is-the-fraud-jpmorgan-metals-desk-fixed-gold-prices-for-years



German Firm Northern Bitcoin AG Unveils Mobile Eco-Friendly Bitcoin Mining Containers

Bitcoin (BTC) mining infrastructure firm Northern Bitcoin AG has announced the completion of tests for its new air-cooled mining container, which houses 144 ASIC miners.

A press release published on Sept. 9 outlined that the highly mobile container solution has been designed as a piece of flexible and efficient infrastructure that will enable the firm to establish mining pools in countries with year-round cool locations.

Setting up shop anywhere energy is cheap, sustainable

Headquartered in Frankfurt am Main, Northern AG develops and operates Bitcoin-focused mining hardware that uses renewable energy sources and aims to attain optimal efficiency and sustainability.

The press release notes that Northern AG has developed and operated a mining pool with 21 water-cooled 41-foot containers — housing 210 ASIC miners each — in Norway for over a year.

The new water-cooled container has reportedly been developed with partners in Germany and will allow the firm to extend its operations, flexibly and at short notice, to new locations across Scandinavia.

Its 20-foot design — with a capacity to house 144 ASIC miners — has a significantly higher miner density than the earlier water-cooled containers. The firm says it is focused on deploying its mobile mining solutions in permanently cool locations where sustainable energy sources such as hydropower are cheap and abundant.

As the press release notes, efficient temperature control is critical for compute-intensive Bitcoin mining operations, during which the hardware required typically generates significant heat.

Bitcoin mining getting more energy-efficient

As recently reported, fresh data from aggregator Statista has indicated that Bitcoin (BTC) energy consumption is becoming rapidly more efficient, even as the global network’s hash rate continues to hit record highs.

Energy consumption as of July 2019 was 69.79 terawatt hours per year. In July 2018, the figure was 71.12 terawatts, while hash rate was almost 60% lower than at present.

A study in June found that three-quarters of Bitcoin mining activity is powered by renewable energy sources. 

Mining hardware manufacturers such as Bitmain are similarly seeking to develop new solutions with greater processing capabilities and lower energy demands.


from: https://cointelegraph.com/news/german-firm-unveils-mobile-eco-friendly-bitcoin-mining-containers



New Analysis: Every Bitcoin Holder Makes a Profit After 1,335 Days

For comparison, to achieve a sure profit on the S&P 500,
an investor would have needed to hold their position for 23 years.

New analysis suggests Bitcoin (BTC) holders make a profit after an average of 1,335 days — or roughly three years and eight months.

The data, released on Sept. 8 by BitcoinEconomics.io, roughly correlates to the four-year cycle length based on reward halving periods.

Bitcoin Profit Probability chart. Source: BitcoinEconomics.io

Profiting from Bitcoin: A waiting game

While a 100% sure profit would have taken a maximum of 1,335 days, this relates to the bull run in late 2013, when Bitcoin price surged to $1,150.

Buying in right at the top would have meant it took until early 2017 before BTC finally broke that level again.

Missing the peak of that rally would have resulted in a substantially reduced wait for a profit. Holding Bitcoin for 317 days would have given a 75% chance of profit. There was a 60% chance of profit if Bitcoin was held for 35 days, and the likelihood that you were up over any single day was 50%.

If that seems like a long time, check the S&P 500

For comparison, to achieve a sure profit on the S&P 500, an investor would have needed to hold their position for 23 years.

This analysis purely looks at the chance of profit and not the scale of that profit. When Bitcoin is on a bull run, profits dwarf those achievable on stock market indices.

For example, the Grayscale Bitcoin Investment Trust outperformed everything so far in 2019  with appreciation of almost 300% in the year to date, as reported by Cointelegraph in July.


from: https://cointelegraph.com/news/new-analysis-every-bitcoin-holder-makes-a-profit-after-1-335-days



Bitcoin Is a Truth Machine, Says Gold Bullion Co-Founder

Gold Bullion International co-founder Dan Tapiero has said Bitcoin’s (BTC) value is a truth machine.

Tapiero made his regards during an interview with business news outlet AlphaWeek published on Sept. 10. He said:

“What it is is an invention, and I think it should be referred to as an invention rather than all the other things. It’s a, you know, what it really is […] It’s a truth machine. […] It’s a way to eradicate all fraud or lying by human beings.

Bitcoin is a reward for network maintenance

Tapiero also noted that the system is now 10 years old and has a good track record, all of which contributes to his will to ask “what is a security platform like that, with that track record” worth. In the end, he concluded:

“Bitcoin, really, is just the reward that miners get for guaranteeing the security of the framework of the network, that’s what it is.”

BTC is worth hundreds of billions of dollars

Tapiero also asked what it would cost for a company to develop such a system. He said that he believes it would cost hundreds of billions of dollars, touching on the number of work hours dedicated to the development and maintenance of Bitcoin and its ecosystem.

He also added:

“Could a company even develop that? You know, maybe Satoshi realized it can only be developed slowly over time in a decentralized way.”

As Cointelegraph reported earlier today, Blockstream CEO said that Bitcoin is reverting to its historical market dominance of more than 90% at altcoins’ expense.


from: https://cointelegraph.com/news/bitcoin-is-a-truth-machine-says-gold-bullion-international-co-founder



Block: 593468 — Someone Moved $1B in Bitcoin (94,504 BTC) for $700 Fee, Overpaying 20 Times

A $1 billion Bitcoin (BTC) transaction has become conspicuous not because of its size but because its sender spent far too much on fees.

Someone could have sent 94K BTC for $35

Social media users were guessing at the origin and destination of the funds on Sept. 6, which involved 94,504 BTC ($1.018 billion).

According to Twitter-based monitoring resource Whale Alert, the transaction did not involve known wallets or those belonging to a specific cryptocurrency-related organization, such as an exchange.

One theory suggested the funds may be tied to institutional trading platform Bakkt, which begins accepting client deposits today.

“Institutions building inventory for their market-making needs going forward,” commented Max Keiser on the giant transaction. He added:

“This = effective ‘put’ on the BTC price at $9,000 (as I’ve been reporting for several yrs now). Ie, institutions are net-buyers of any BTC that shows up at $9k. Risk/reward now for buyers is excellent.” 

Its sender, who may have been sending funds to themselves, nonetheless selected a very high fee rate.

At 480 satoshis per byte, the fee totalled around $700.

Bitcoin fees can vary depending on how quickly a sender wishes a transaction to be processed by miners. Many wallets allow manual fee-setting; the more money paid, the fewer blocks a user must wait for a transaction confirmation. 

Under current conditions, getting a transaction included in the next block — maximum ten minutes — is just 23 satoshis per byte, meaning the $1 billion sender overpaid 20 times. The funds could have settled in around 10 minutes paying a fee of just $35.

Bitcoin’s low fees era continues

Bitcoin fees have remained low in 2019 despite the cryptocurrency’s rapid rise in price.

As Cointelegraph reported, the situation marks a stark contrast to 2017, when Bitcoin circled all-time highs and fees grew in step. At the time, developers of projects such as the controversial Bitcoin Cash (BCH) aimed to take users away with the promise of lower fees.

The total hash rate of Bitcoin — the amount of computing power involved in the mining process — continues to reach new highs, and is now more than 1000% larger than in September 2017.

from: https://cointelegraph.com/news/someone-just-moved-1b-in-bitcoin-for-700-fee-overpaying-20-times



Mystery 94K BTC Transaction Becomes Richest Non-Exchange Address

The recipient wallet of the $1 billion Bitcoin (BTC) transaction on Sept. 6 is now presumed to be the first richest non-exchange address.

The recipient wallet of the massive 94,504 Bitcoin ($1.031 billion) transaction is the top richest Bitcoin address that is not reportedly associated with any crypto-related company, according to data from monitoring resource Bitinfocharts.

Top 5 richest Bitcoin addresses. Source: Bitinfocharts

A third of the coins came from Huobi

According to data by London-based blockchain data provider TokenAnalyst, at least one third of the mysterious transaction directly originates from Huobi exchange. Another analyst, blockchain data and metrics firm Glassnode tweeted that at least 73,000 BTC from the transaction originate from Huobi.

According to an earlier tweet by Crypto Herpes Cat, at least two Bitcoin wallets involved in the notable transaction belong to Huobi. One of the specified wallets is directly involved in the transaction.

Cointelegraph has reached out to Huobi for comments, to which the exchange’s representative responded:

“As we don’t generally disclose information about transactions, we can only confirm that this transfer of funds did not involve Huobi’s own funds and that, with exchanges as big as ours, large transactions like this one can and do occur from time to time. Our security team has been monitoring the situation carefully and has found no evidence of any compromises in account security. All client funds remain safe and secure.”

Rumors run wild

As reported earlier today, crypto monitoring resource Whale Alert stated that the much-discussed transaction did not involve any known wallets or those belonging to any specific crypto exchange or any crypto-related firm.

Some analysts suggested that funds may be tied to institutional trading platform Bakkt, which starts accepting client deposits today.

Meanwhile, Huobi, which is ranked 20th biggest crypto exchange by adjusted daily trading volume at press time, was reported to have seen the highest number of withdrawals from the alleged crypto Ponzi scheme PlusToken by Aug. 23.

Huobi did not respond to Cointelegraph’s inquiry about the transfer by press time.


from: https://cointelegraph.com/news/mystery-94k-btc-transaction-becomes-richest-non-exchange-address




Bitcoin Cash (BCH) Can’t Mine Blocks Bigger Than 2MB — And BSV Split-Forked Into Three

Altcoin Bitcoin Cash (BCH) faced fresh criticism this week after one of its lead developers appeared to admit its network was unable to process its larger blocks.

In a Reddit exchange on Sept. 2, Amaury Séchet, via his account known as u/deadalnix, responded to criticism of some miners by another pro-BCH user. In the response, the developer suggested a BCH node would not be able to process a block of transactions 2 megabytes or larger.

Séchet is the lead developer of Bitcoin ABC, the first incarnation of the Bitcoin Cash network client.

Large blocks would make nodes “trip over themselves”

“Sure or we can mine large block, so we move the problem from the mempool to indexing node that fill trip over themselves bsv style as they are not optimized to handle 100x the usual demand. Or we can solve the problem rather than trading it against another,” the response reads.

Larger blocks were a central tenet of BCH when it came into being in 2017. Its main proponent, Roger Ver, frequently champions bigger blocks as a cure-all for capacity problems which have faced Bitcoin (BTC) in the past.

Admitting the network cannot in fact process them, therefore, did not go unnoticed by BTC figures.

“No big deal. Just the main developer for #bitcoincash saying it can’t currently handle bigger than 2MB blocks,” Blockstream engineer Grubles commented retweeting Séchet’s post.

Grubles additionally referenced another Reddit comment which shows another user asking Ver to manipulate BCH mining practises.

An admission of failure?

Others advised caution, noting Séchet had not specifically stated the bigger blocks narrative was redundant.

“He didn’t said it directly but didn’t denied the premise. But it is something I have suspected and talked about for a year. As they never have had a 30 days constant blocksize of even 1MB,” Bitcoinated forum moderator AvatarX added.

Like the majority of major altcoins, BCH has fallen fast against both BTC and most fiat currencies in recent times. Controversial from the outset, an ongoing war between the coin and its hard fork, Bitcoin Cash SV (BSV), continues.

The latter, since diverging from BCH in Nov. 2018, has faced even more technical difficulties, leading to critics panning its security credentials and purported use cases.

from: https://cointelegraph.com/news/bitcoin-cash-cant-mine-blocks-bigger-than-2mb-lead-dev-suggests


Bitcoin SV Splits Into Three Chains Following 210 MB Block

Following a recent hard fork of Bitcoin SV (BSV), the network saw a three-chain split after a massive 210 megabytes (MB) block was mined.

As reported by BitMEX Research on Aug. 3, Bitcoin SV nodes divided into three groups on Saturday, making the network to split into three separate chains. According to the report, 65% of nodes were located on the current tip, while 17% were stuck on the 210 MB  block and 19% had not even upgraded and were on the old pre-hard fork chain.

Bitcoin SV node chart. Source: Twitter

According to data from Coin Dance, the 210 MB block was mined on Aug. 3 by CoinGeek miner and involved 808,633 transactions.

Bitcoin SV, a hard fork of Bitcoin Cash (BCH), which is in turn a fork of the major cryptocurrency Bitcoin (BTC), successfully ran its own scheduled hard fork on July 24 as part of plans to increase its block size from the previously set limit of 128 MB up to 2 gigabytes.

Bitcoin SV nodes are getting expensive

Prior to the three-chain split, Ryan X. Charles, a BSV supporter and CEO of BSV-powered payment system MoneyButton, published a post on the Money Button blog about his issues running a BSV node. Specifically, Charles stated that Money Button went down for three hours because their Bitcoin SV node ran out of memory and crashed during a stress test. He wrote:

Running a node is expensive. Our new instance will cost thousands of dollars per month to operate. As blocks continue to get larger and we have to upgrade the instance many times, this cost will balloon. Since we do not earn money from transaction fees like miners, it will be too expensive for us to run a node.”

According to tech news outlet TrustNodes, Coin Dance service is now on the new Bitcoin SV chain, while the older chain will likely be discarded. According to the report, this could mean that miners who got stuck on the old chain may have lost some money as those blocks could now be discarded. The report notes that, while the recent split appears to be the first of its kind, giga-sized blocks may generate splits with more than three forks. 

Bitcoin SV has previously experienced problems due to what some consider to be an unwieldy blockchain size. In April, the coin’s blockchain underwent a series of block reorganizations — a situation in which two miners discover a block simultaneously in a blockchain, which causes a temporary forking in the network. In general, block reorganization happens when a network is too slow to reproduce blocks efficiently.

from: https://cointelegraph.com/news/bitcoin-sv-splits-into-three-chains-following-210-mb-block


Bitcoin Dominance Hits 70% as Keiser Warns Altcoins ‘Not Coming Back’

“Altcoins are to Bitcoin what lead is to Gold.”

Bitcoin (BTC) now has the highest share of the overall cryptocurrency market since before its record-breaking $20,000 bull run in 2017.

According to data from major monitoring resource CoinMarketCap, Bitcoin now accounts for 70.5% of the total cryptocurrency market cap as of Sept. 3.

Bitcoin market cap hits pre-$20K high

That figure has not been seen since March 2017, and comes as BTC/USD makes gains at altcoins’ expense.

As Cointelegraph reported, continued underperformance in cryptocurrencies other than Bitcoin has triggered warnings from traders and analysts alike.

Among them are Peter Brandt and RT host Max Keiser, the latter again claiming this week that altcoins would never recover from this downturn.

“Alts never coming back… Sorry,” he tweeted on Sept. 3, also referencing market cap statistics. Brandt reiterated similar warnings.

“When will altcoin junkies understand that $BTC is the crypto with real and lasting value,” wrote Brandt, who added:

“Altcoins are to Bitcoin what lead is to Gold.”  

Some sources had reported Bitcoin hitting the 70% mark as early as last week.

Market cap readings set highs across the board

Bitcoin itself delivered a sudden return to form late on Monday, having previously dropped to just $9,350. At press time Tuesday, BTC/USD was circling $10,360, bringing 24-hour gains to 6.2%.

Altcoins in the top twenty, however, mostly failed to achieve more than 4%, meaning they, in fact, lost value in Bitcoin terms.

Some commentators voiced caution about placing faith in Bitcoin’s strength. Market cap, they argued, is a poor measure of performance, as it includes many altcoins which do not even have any trading volume.

Earlier, Cointelegraph reported on the phenomenon of Realized Market Cap, a metric designed to solve those inconsistencies which has also set new records in recent weeks.

from: https://cointelegraph.com/news/bitcoin-dominance-hits-70-as-keiser-warns-altcoins-not-coming-back


No ‘AltSeason’ Until Bitcoin Breaks $20K, Says Hedge Fund Manager

The worst is yet to come for altcoins, says Cantering Clark’s Ryan Sperin

“When AltSeason 2?” has been on the minds of many investors for some time now. The average retail Joe Schmoe investor most likely draws some insight from crypto-sector leaders and Crypto-Twitter influencers who often post compelling charts of various digital assets with a captioned explanation of why or why not certain price action could lead to a particular outcome.

To review, here what many investors may have internalized as truth:

  • When Bitcoin (BTC) price consolidates (trades sideways) traders will take their profits and begin to play larger-cap altcoins, this catalyzes similar movement across other altcoins and could spark an altcoin rally.
  • As Bitcoin price notches new 2019 highs, larger cap altcoins from the top-10 will move in tandem.
  • A significant drop in Bitcoin market cap dominance will put the ball in altcoins’ court.

So far, none of these things have happened. In fact, the situation for the majority of altcoins has gotten even worse. 

To gain more clarity on this situation, Cointelegraph decided to ask a professional fund manager to explain what is going on with the crypto sector and why altcoins haven’t followed Bitcoin as they did in the past.

Cointelegraph spoke with Cantering Clark[‘s Ryan Sperin], a hedge fund manager and co-founder of Blockroots, to pick his brain about the general state of the market and whether altcoins will recover.

Cointelegraph: Bitcoin has had some periods of range-bound trading since topping out at $13,800. In your opinion, why haven’t we seen traders take advantage of this consolidation to jump into altcoins? Also, what exactly is “altseason” in your opinion?

Cantering Clark: Altseason was essentially a bunch of new investors entering the crypto space, drawn in by Bitcoin. They saw Bitcoin as being very expensive and the perception at the time was cheaper altcoins are going to be future Bitcoins in the making.

Newer investors were relatively ignorant of market cap and multiplier effects, they just saw the smaller price and equated a cheaper price to a better deal.

In my opinion, altcoins were the epitome of the bubble for 2017 and the process closely mirrored the Gartner Hype Cycle.

Bitcoin is essentially the chosen asset by the industry and it has become the haven of crypto. When Bitcoin does well there are flows that can be capitalized on but this flow cycle has begun to untether and fall apart.

The inverse correlation and positive correlation is no longer a conventional occurrence that investors can consistently rely on.

“Bitcoin price hasn’t broken it’s all-time high, and the next altseason is unlikely to occur until this all-time high is broken.”

CT: Shouldn’t a drop in Bitcoin dominance lead altcoins to surge? 

CC: If Bitcoin’s dominance rate dropped to 40% this would probably bring on an altseason but it’s unlikely that this sort of dominance shift is in the cards at the moment.

CT: Do you think investors’ confirmation bias impacts Bitcoin price action? For example, many investors believe that if Bitcoin must drop below the 61.8% Fibonacci retracement level before a real bull market begins. 

CC: Bitcoin is so volatile and it has been through every asset scenario possible. Moving averages are useful because traders make them useful.

The collective effort of traders makes the necessity of Bitcoin revisiting any price more “likely” thanks to the groupthink. Fibonacci retracements work because we make them work and we place bids and asks on the order book accordingly. Basically, nearly all resistances and supports are based on this thinking.

A revisit to the 61.8 Fib level diminishes the likelihood of us going way back up because it demonstrates that buyers are reluctant to step in and purchase at a higher price, or before that price is reached.

As for Crypto-Twitter, there is a deluge of cognitive biases to be found there every day. We should work to avoid confirmation bias and this is why I suggest reading Thinking Fast and Slow by Daniel Kahneman.

CT: Tell us about what led you to invest in cryptocurrency. 

CC: I was drawn to crypto primarily because of the volatility.

CT: Give us your best explanation of how leveraged trading works and how one can use it to their advantage. 

CC: In crypto, people use leverage to amplify gains through greater capital exposure. More often than not, traders take on losses because they don’t truly understand how margin works and what it is truly designed for.

Margin/leverage mitigates counterparty risk, and this is especially beneficial for crypto. With leverage, if I own 1 BTC, I can keep 90% of my BTC in a cold wallet and just put 10% of the BTC on exchange and protect myself from counterparty risk.

Leverage also gives the opportunity to trade both sides of the market. Frequently, traders use too much leverage and get liquidated as the market moves against them but a healthy amount of leverage gives the opportunity to take advantage of market trends.

2x and 3x leverage allows one to play the trend, especially when Bitcoin is in a strong trend with clear support and resistance levels.

CT: Tell us a little about Blockroots? 

CC: Our main objective is to educate new traders and separate the truth from the noise. There are a ton of paid groups and these are not always the best way for new traders to learn how to understand the basics of investing.

One of the troubling aspects of the cryptocurrency market is there are so many trading groups and newbies who copy the trading systems proposed in paid groups a kind of taking a shot in the dark. New traders really aren’t fully aware of how effective these trading systems are they don’t have transparency regarding the trader’s success rate. Blockroots provides an academic, base-level trading approach to help new traders find their way.

from: https://cointelegraph.com/news/no-altseason-until-bitcoin-breaks-20k-says-hedge-fund-manager


Venture Capitalist Fred Wilson Revises His Bullish Opinion on Ether

Fred Wilson, a financier and co-founder of venture capital firm Union Square Ventures, has revised his bullish opinion on Ether (ETH).

Back in 2017, Wilson had suggested the market capitalization of Ether will bypass the market capitalization of Bitcoin (BTC) and eventually be worth more per coin. However, in a Sept. 4 blog post, Wilson acknowledged ETH has fallen short of this — and that the underlying Ethereum network is experiencing problems. He wrote:

Ethereum, as many of you know, confounds me. It has shown the way to so many important things; smart contracts, programmable trust-free computing, potentially proof of stake, and a lot more. But it remains hard to build on, scaling issues abound, and many developers are looking elsewhere.

Last month, Ethereum co-founder Vitalik Buterin himself admitted that the Ethereum blockchain is almost full. Buterin said at the time:

“If you’re a bigger organization, the calculus is that if we join, it will not only be more full but we will be competing with everyone for transaction space. It’s already expensive and it will be even five times more expensive because of us.”

Ether is no match for Bitcoin

Referring to Bitcoin, Wilson said there is still nothing on the market that comes close to the leading digital currency, adding:

“There are some protocols, like the privacy-focused ones, that offer similar and in some cases better use cases. But for the most part, Bitcoin is our digital gold.

The venture capitalist also touched on the issue of Facebook’s yet-to-be-released Libra stablecoin, calling it a bright spot. In Wilson’s opinion, the industry will see more innovation, including a stable programmable crypto asset.

In January, Wilson had warned cryptocurrency will not be a safe haven in 2019 amid a weakening economy and a bear market in stocks, although he noted that “there will be signs of life in crypto land in 2019.” As for the impetus for the next bullish phase, Wilson listed a number of promises made back in 2017, including a number of smart contract platforms that can compete with Ethereum.

Cryptocurrency investor and Placeholder partner Chris Burniske argued in late August that Ether is enduring its first mainstream bear market, just as Bitcoin did back in 2014–15.

from: https://cointelegraph.com/news/venture-capitalist-fred-wilson-revises-his-bullish-opinion-on-ether



What Are the Biggest Alleged Crypto Heists and How Much Was Stolen?

As the appeal of cryptocurrency has grown, so has the opportunity for scammers to part naive investors from their money. 2019 has been no exception, with cryptocurrency and blockchain forensics company Ciphertrace dubbing it “the year of the exit scam.”

Exit scams are not a new phenomenon, with a 2018 report conducted by Statis Group revealing over 80% of initial coin offerings (ICOs) in that year to have been fraudulent. Here, Cointelegraph explains exit scams and how to spot them, as well as a look at some of the biggest scams that have been discovered by various researchers.

What are exit scams?

The premise of cryptocurrency is simple, a new ICO launches, claiming to offer lucrative returns for investors. Investors can’t believe their luck and clamor to buy in. The business runs for some time on the back of the invested capital, but, sooner or later, disaster strikes and the company shuts down, often with no explanation.

After a while, it becomes obvious that the company is gone for good, along with the invested funds. The poisoned chalice of crypto’s decentralized nature often means that investors are left in the dark when trying to recoup or trace their pilfered funds.

How to spot an exit scam

Many exit scams have tell-tale signs that investors should look out for. The financial content site Investopedia has a handy list of key characteristics.

First, exit scams often have inconsistent or misleading information about the team behind the project. When scouting potential investment opportunities, investors should scour for information on key members of any ICO.

It’s important to remember that online credibility can be faked by purchasing likes, profiles and followers on social media. Celebrity endorsements with verified accounts could also ring alarm bells for investors. A fake Twitter account purporting to be Elon Musk, with a supposedly verified twitter account, raised over $155,000 as part of a 2018 Bitcoin scam.

Investors should verify the credentials of backers, team leaders and promoters of cryptocurrency projects. Although individuals may seem to be legitimate at first glance, brand new social media profiles and few followers or connections should raise eyebrows.

The most significant characteristic unifying exit scams in cryptocurrency is the promise of a huge return on investment (ROI) — chances are that it’s probably too good to be true. Investors should always look through even the smallest details of what they are required to invest and what the company purports to be able to give back to them.

ICOs usually come with a white paper, setting out the design details of the project along with a business plan and other information. Investors should pursue all available information for ICOs, as any vagueness in the white papers should signal a big red flag.

When investing in an ICO, it’s vital to get an understanding of the business model. Investopdia writes that anything powered by concept alone should be a warning to anyone tempted to buy in. Although cryptocurrency projects can and do launch off the back of technological advances, investors should be wary of projects looking to gather millions of dollars before taking a sober look at the project’s ability to return the investment from the published information.

Heavy promotion of an upcoming ICO can also be a sign of an exit scam. Past scams have employed bloggers to promote via numerous forums. Ads both online and in print media could also be suspicious.

$2.9 billion PlusToken scam could be largest exit scam ever

A 2019 report shared with Cointelegraph by the cryptocurrency and blockchain forensics company Ciphertrace dubbed 2019 the year of the exit scam and highlighted the billions of dollars stolen in multiple scams this year alone.

The report shines a light on what, if confirmed, could be the biggest crypto scam ever, with an estimated loss of around $2.9 billion after Chinese police uncovered an alleged Ponzi scheme involving the South Korean wallet provider and exchange PlusToken. Although more is being uncovered about PlusToken, mystery still surrounds the key events.

Ciphertrace reports that the platform has enshrouded several Chinese nationals, the government of Vanuatu, the Chinese police and the company’s co-founders — a South Korean man operating under the alias of “Kim Jung Un” and a Russian known only as “Leo.” The alleged PlusToken scam centers around an app with which the wallet provider claimed investors could invest in PlusToken (PLUS).

According to the report, the firm claimed that the token, based on the Ethereum blockchain, was developed by a major technology company. PlusToken is also said to have falsely stated that it could deliver wallet holders an ROI of between 8% and 16% per month, with a minimum deposit of $500 in crypto assets.

Ciphertrace also reported that no verifiable source of revenue existed other than the proceeds from new membership. Those were onboarded per the traditional method of a Ponzi scheme, which require a constant stream of new investment in order to support its semblance of growth. Investors were incentivized to recommend new users with an invitation, which was the only way to join.

Although this was enough for some members to dismiss the legitimacy of the project outright, Leo, the company’s co-founder, published a press release that claimed he had met with Prince Charles, the future head of the English royal family, providing photos as proof. Ciphertrust reported that it had contacted the Prince Charles Foundation, which confirmed that Leo had indeed attended the event, but would not provide other information about the individual due to European Union General Data Protection Regulation, or GDPR.

PlusToken’s fate was seemingly sealed on June 28, after members of the Chinese police touched down in Vanuatu, detained six people involved with the project and extradited them back to mainland China. Ciphertrace reported that the so-called “PlusToken Six” were either Vanuatu citizens or applying for citizenship at the time of their arrest.

Soon after, PlusToken members found that they were unable to withdraw funds from their accounts. Customers were informed that withdrawals via the app were frozen due to “technical difficulties.” By June 20, the PlusToken app had ceased operations due to purported system maintenance.

For investors, there seems to be no secure lead on the final resting place of the allegedly billions of dollars of stolen funds. The Chinese government has yet to comment. A July 12 post from PlusToken stated that the six Chinese individuals were simply service users and not actually involved with the running of the company itself, stating that users should ignore the rumors and not try to log in until they receive confirmation that the servers are back online.


On April 9, 2018, two ICOs — iFan and Pincoin — operating under the umbrella of company Modern Tech based in Vietnam, went silent after reports outed them as scams that had scalped 32,000 investors out of an alleged $660 million in tokens, according to Tuoi Tre News.

Victims claim that the damages amount to roughly 15 trillion Vietnamese dong ($660 million) in token sales. Angered investors held a demonstration outside Modern Tech’s Ho Chi Minh City headquarters on April 8.

One of the initial characteristics that could have alarmed investors was the fact that Pincoin offered service users bonuses for successfully bringing other people on board. Pincoin did initially pay out cash until January 2018, when the company switched to iFan tokens, TechCrunch reported.

The owner of Modern Tech’s office building said that the company left its offices in March and that no one knew their current whereabouts. The firm left behind only an incomplete website that is now inactive. Modern Tech initially tried to pass itself off as a mere representative of both coins in Vietnam, prior to media reports confirming that seven of its Vietnamese executives were in fact behind the projects.

TechCrunch reported that the ambiguous mission statement from the then-functional site is typical of the vague and jargon-filled copy used by exit scammers:

“The PIN Project is about building an online collaborative consumption platform for global community, base on principles of Sharing Economy, Blockchain Technology, and Crypto Currency”

Financial scam directory Behindmlm released a report in February 2018 that found its buy-in method was typical of an ROI Ponzi scheme. Pincoin’s website is currently down, though iFan’s is still online.

QuadrigaCX — regulators catch on

The death of 30-year old Gerald Cotten shook the crypto world — not only because Cotten was the co-founder and CEO of Canada’s largest cryptocurrency exchange, QuadrigaCX, but also because his control of the passwords and keys to accounts rendered all the assets on the exchange forever inaccessible after his death. Cotten took over $195 million of stolen cryptocurrency with him to the grave.

Related: QuadrigaCX Users Lose $190M as Speculations Over Cotten’s Death Swirl

Commenting on the May 9 Ernst & Young report, Ciphertrace said Cotten had played fast and loose with customer funds for many years in order to support a lavish lifestyle for both himself and his wife. Cotten allegedly exercised complete control over the exchange and used his position to perform “unsupported deposits” — i.e., fabricated transactions not represented by either fiat or cryptocurrency.

Cotten also used significant volumes of customers’ cryptocurrency via transfers from the platform into other exchanges he controlled. As per the EY report, Cotten shifted significant amounts of fiat and cryptocurrency between alias accounts, although less than 1% of these transfers was supported by documentation. Ciphertrace notes that as the admin, Cotten was in a perfect position to hide his fraudulent activities.

In a pattern that may now seem familiar, Cotten used customer funds to pay for QuadrigaCX operating costs after the company suffered liquidity issues due to his reported fraudulent use of user deposits. As QuadrigaCX began to struggle to stay afloat, EY reported that Cotten gambled customer funds in off-platform margin accounts to meet margin calls.

The report also states that Cotten traded unsupported deposits for legitimate funds thereby generating artificial trading markets, abused his position to override Know Your Customer requirements and hoarded all passwords:

“The Monitor understands passwords were held by a single individual, Mr. Cotten and it appears that Quadriga failed to ensure adequate safeguard procedures were in place to transfer passwords and other critical operating data to other Quadriga representatives should a critical event materialize (such as the death of key management personnel).”

As of April 12, EY estimated that Quadriga held around $20.8 million in assets and around $160 million in liabilities. The debts and assets are spread over three subsidiary companies, 0984750 B.C. LTD. (the “Quadriga Estate”), Quadriga Fintech Solutions and Whiteside Capital Corporation. On July 31, the Supreme Court of Nova Scotia approved over $1.6 million in fees for parties seeking remuneration from the exchange, according to court documents seen by Cointelegraph.

CFTC action launched after $147 million BTC scheme

On June 18, 2019, the United States Commodity Futures Trading Commission (CFTC) initiated a civil enforcement action against now-defunct Control-Finance Limited for a scheme involving $147 million worth in Bitcoin.

It is alleged that Control-Finance Ltd. defrauded over 1,000 investors by laundering around 22,858 Bitcoin. In mid-September 2017, its website was abruptly taken offline, payments to clients were suspended and advertising content from social media accounts was deleted.

The firm initially said that it would reimburse customers by late 2017. However, the company allegedly began transferring laundered Bitcoin by using the crypto wallet service CoinPayments. According to Ciphertrace’s Q2 2019 Anti-Money Laundering (AML) report, the CFTC complaint charges the company and its founder Benjamin Reynolds with:

“Exploiting public enthusiasm for crypto assets by fraudulently obtaining and misappropriating at least 22,858.22 Bitcoin from more than 1,000 customers through a classic high-yield investment (HYIP) Ponzi scheme called the Control-Finance Affiliate Program.”

Per the CFTC, the company claimed that investors who buy Bitcoin through the firm would be guaranteed daily profits thanks to their team of expert cryptocurrency traders. The complaint also stated that the firm falsely claimed market volatility would ensure funds invested through Control-Finance would result in profit.

The CFTC also alleged that Control-Finance misleadingly promised that it could earn customers a 1.5% ROI daily and 45% monthly. Control-Finance is also reported to have sent partial amounts of new clients’ BTC deposits to other customers, which were disguised as profit from trading, a tactic typical of Ponzi schemes. The legal action seeking civil monetary penalties and permanent trading bans continues.

Co-owner of Bitmarket found shot dead after alleged exit scam

On July 8, the Poland-based exchange Bitmarket shut down, citing liquidity issues. According to Ciphertrace’s Q2 2019 AML report, the shutdown cost users around 2,300 Bitcoin, approximately $23 million. Users attempting to log on to the site were met with the following message:

“We regret to inform you that due to the loss of liquidity, since 08/07/2019, Bitmarket.pl/net was forced to cease its operations. We will inform you about further steps.” 

Ciphertrace reports that Bitmarket had a history of partners pulling out. In 2015, the firm lost payment processors CashBill and BlueMedia after the companies’ banks requested they end their working relationship with Bitmarket. PKO Bank Polski, Bitmarket’s own bank, also terminated its relationship with the firm only six months after Bank BPH had done so earlier in 2015.

Bitmarket’s two founders, Marcin Aszkiełowicz and Tobiasz Niemiro, have contradicting accounts about the misplaced user funds. Aszkiełowicz claimed that the exchange had been hacked for 600 BTC in 2015, an incident from which the company was unable to recover.

Niemiro, however, claimed that he was not responsible for activities on the exchange. Niemiro also purported to have been told that the company was purchased with a deficit of 600 BTC, which he allegedly repaid with his own money. Niemiro said he could not confirm that his partners had indeed used the money to purchase the 600 BTC.

Two weeks after the interview, Niemiro was found dead in a forest near his home with a gunshot wound to the head, which the police deemed to be self-inflicted. The District Attorney’s Office stated that it is not looking into the involvement of third parties in Niemiro’s death, but are still actively investigating the misappropriation of funds.

from: https://cointelegraph.com/news/what-are-the-biggest-alleged-crypto-heists-and-how-much-was-stolen

R3 Plagued by Internal Conflicts Over Corda, Sources Claim

The development of R3’s enterprise blockchain platform Corda is being plagued by fundamental disagreements over its core vision, causing frustration and delay.

The claim was made in a report from FT Alphaville on Aug. 22, citing numerous insider sources.

“Corda maximalists” versus interoperability proponents

Sources close to R3 reportedly allege that there is a gulf between Corda’s engineers and its senior management as regards the product’s design and development. The engineers have purportedly lost faith in the technology itself, considering it to be functioning poorly and underscoring that it lacks scalability. 

They have also pointed to the allegedly 5-figure monthly bills R3 is ratcheting up in payments for cloud services, which cast a shadow over the platform’s long-term viability.

Other sources have spoken of tensions at the level of the workforce, accusing the R3 engineers of being susceptible to a “three-year itch” they believe besets the enterprise blockchain sector as a whole.

Sources mention irresolution regarding R3’s identity — split between pitching itself as being a financial software firm to a more wide-ranging tech consortium.

As regards Corda itself, they claim there is a lack of ambition and clarity regarding exactly what kind of blockchain it aspires to be — and whether or not it will at all remain committed to distributed ledger technology also known as DLT.

This split has become tribal, they allege, with a split between so-called Corda maximalists and those open to pursuing interoperability.

The bottom line is that many reportedly fear the platform will not offer diverse businesses the efficiency gains it promises.

“Powerful but not very useful”

Among the R3 engineers, anonymous sources have said the consortium is trying to market software that is still ill-conceived and underdeveloped; they added that R3 is struggling to manage its burgeoning client base.

FT Alphaville was told by other in-house engineers that the flagship product “still feels like an engine without a car — powerful but not very useful.”

Notably, some have alleged the company would have faced a cash crisis had it not reached a settlement in 2018 with erstwhile rival Ripple over a legal dispute involving the breach of an option agreement that would have allowed R3 to purchase XRP at a discounted price.

Earlier this month, R3 announced plans to open a second European office in Dublin in 2020, just weeks after doubling the size of its London hub as part of an aggressive expansion plan.


from: https://cointelegraph.com/news/r3-plagued-by-internal-conflicts-over-corda-sources-claim



Bitmain Valuation to Hit $12B With New 600K Chip Order, Source Says

[the article interchanges ‘ASIC’ and ‘Mining Rig’ (the toy boxes) arbitrarily]

Bitcoin (BTC) mining giant Bitmain will increase its capacity by 50% in the next six months on the back of a giant hardware order, a source close to the deal has said.

Bitmain eyes 50% capacity increase

As reported by Chinese social media network WeChat on Aug. 23, Bitmain, which has seen a dramatic reversal of fortunes in 2019, will now buy 600,000 mining chips.

According to a source close to the Taiwanese chip manufacturer processing the order, the chips will be of the most recent 7nm variety, the hash rate of which will be 50 tera hashes per second [per AntMiner mining rig].

“Based on this calculation, after half a year, Bitmain’s total network computing power will skyrocket by about 50%,” the publication notes, adding Bitmain’s valuation will subsequently top $12 billion.

Mining operators trickle into the black

In July, the company and competitor Canaan Creative sold 5,000 application-specific integrated circuit mining rigs, or ASICs, to German operator Northern Bitcoin.

As Cointelegraph reported, the increase in Bitcoin mining profitability this year has improved the prospects for operators like Bitmain. In late 2018, pressure was visible, with the company closing down operations and firing staff in some countries.

The impact of the previous Bitcoin bear market lingers on, Bitmain reporting losses of $625 million for January and February.

Renewed plans to conduct an initial public offerings — or IPO — in the United States could meanwhile come to fruition before the beginning of 2020.


from: https://cointelegraph.com/news/bitmain-valuation-to-hit-12b-with-new-600k-chip-order-source-says



Machine-to-Machine Communications: Can Blockchain Become an Integral Part of Autonomous Vehicles?

A decade ago, the thought of self-driving cars was far from reality, but with 2020 looming large, massive strides have been made in the field of autonomous vehicles. Meanwhile, in the space of a decade, Bitcoin has thrust cryptocurrencies and blockchain technology into the mainstream consciousness. The latter has become a tool that is quickly being integrated into the world of finance, governance, logistics as well as the motor industry.

Some of the world’s leading automobile companies have been exploring the applications of blockchain technology and how it can be used to improve vehicles, the systems that operate them as well as how they interact with the world around them.So how is blockchain being used to drive the development of autonomous vehicles around the globe?

Machine-to-Machine communications

As recently as August 2019, Daimler carried out a test run in which trucks made machine-to-machine payments using a blockchain platform without any human interaction. Frankfurt-based bank and financial services firm Commerzbank tested payments between the trucks and electronic charging points, which were settled using the blockchain technology.

The banking firm tokenized euros, which were then used by Daimler to test and process the payments using the pilot platform. The success of the project could be a potential driver for the use of blockchain technology to facilitate settlement systems for autonomous vehicles.

While this is the latest instance of blockchain-powered autonomous vehicle interaction, there have been a number of major projects that are leveraging blockchain technology to store and use vehicle data.

Back in May 2018, the Mobility Open Blockchain Initiative (MOBI) was launched by a joint venture made up of over 30 companies, headlined by major automobile companies BMW, General Motors, Ford and Renault.

The principal work of the project was the creation of the MOBI Vehicle Identity Standard, which is looking to create a blockchain-based database for Vehicle Identity Numbers, which goes further than the current system that is used to register newly created vehicles.

By storing data on a blockchain, digital certificates for information including vehicle identity, ownership, warranties and current mileage can be securely stored in an electronic wallet. This data will be immutably stored on the blockchain and cryptographically verified. The vehicle can then communicate with various networks and pay for parking or tolls autonomously.

The data of the vehicle can only be accessed by permissioned parties. This would then allow service providers and government entities to verify credentials and track certain data in real time. This connection with the world around the vehicle will also allow for digital currency transactions to happen autonomously in a cryptographically secure network.

It is an ambitious project but it is easy to see the benefits for the industry. A shared but secure database of vehicles that can interact with the world in real time could be useful to a number of industries, from dealerships and service departments to vehicle insurance companies.

Aside from its involvement in MOBI, GM has been making its own moves to use blockchain technology. In December 2018, the company filed a patent for a blockchain-powered solution to manage data from autonomous vehicles.

The patent builds on an original filing back in 2017 and sets out in detail how the platform would work, allowing the distribution and communication of data between autonomous vehicles and services and facilities on roadways or in cities.

GM’s patent suggests that a blockchain system would be best suited for this type of information sharing. The range of data shared would be anything from navigation, charging and refueling services, validity of licenses as well as recording balances for payable services like tolls and parking.

The American vehicle manufacturer isn’t the only company looking to develop technology in this vein. Multinational IT giant IBM is well known for filing patents for future blockchain-based projects, and it has made some big moves in the field of autonomous vehicles as well.

In April 2019 the company filed a patent for a project that would allow it to manage data and interactions for self-driving vehicles using blockchain tech. This specific patent outlines technology that would allow autonomous vehicles to identify nonautonomous vehicles around it and predict their behaviour based on data from those vehicles’ driving record.

When making use of the blockchain technology, other users data remains secure, but autonomous vehicles can access the information in order to improve their navigation on the road. Only authorized parties would be able to access this data in real time, because it is cryptographically secure.

A practical example would be an autonomous vehicle driving on a highway. As it progresses, it can scan the license plates of nearby vehicles with sensors in order to access the necessary data using a blockchain-based application.

Payment solutions for autonomous vehicles

Blockchain technology and cryptocurrencies have proven their worth as disruptive payment alternatives, and this very application is one that is being actively developed for use by autonomous vehicles.

In July 2019, Daimler announced that it had partnered with a blockchain startup to develop a hardware wallet solution for vehicles. The solution is a blockchain-based platform that would allow for the use of vehicle identities to process secure transactions on a blockchain ledger.

The end goal is to provide a software solution that will power a marketplace for vehicles that goes further than just autonomously paying for tolls or parking. The platform could be used for ride-sharing and secure exchange of traffic information to alleviate congestion.

Alternative solutions

The applications of blockchain technology are seemingly endless, and creative ideas have led to some ingenious use cases. For example, in May 2019, a research project was announced involving Honda and General Motors that would look into the interoperability between electric vehicles and smart power grids. The project is working under the scope of the aforementioned MOBI consortium.

The project will explore the possibility of using electric vehicles to stabilize the supply of energy in smart grids. The parties hope to develop a platform that will see electric vehicle users earn rewards for storing power and exchanging it with the grid when needed.

An academic perspective

The examples of blockchain’s use cases in the development of autonomous vehicles and the improvement of their processes is clear to see. Alejandro Ranchal-Pedrosa, a researcher in blockchain technologies at the University of Sydney, has done significant research in the space.

Having co-authored a published use-case paper on blockchain technology for autonomous vehicles, the researcher told Cointelegraph that the applications of the technology in the automotive industry are plain to see, from payments per transport or unit of fuel, data-sharing for traffic and better transport to insurance.

Ranchal-Pedrosa believes there is one major hurdle to overcome in the use of blockchain tech in autonomous vehicles:

“It is understandable that the industry is taking its time, mainly, in my opinion, due to the scalability problem of blockchains and the latency requirement for autonomous vehicles which is why in most cases the automobile industry would leverage offchain protocols, when possible. We showed how offchain protocols and its fully trustless exchange of infinitesimally fragmentable goods give the possibility of new applications to the industry.”

It is difficult to identify the most beneficial use case of blockchain technology considering the massive potential and variety of possible uses. Various industries will tailor the technology to serve their greatest needs, but Ranchal-Pedrosa believes the most popular use case in the field of autonomous transport will be for transactional exchanges:

“The biggest influence is without any doubt towards the possibility of exchange of goods on-the-go, in a trustless manner. Insurance companies may or may not find blockchain technologies as the best fit for their services, but trustless exchange of transport (sort of a carpool in which you can sign a contract with literally anybody to pay per kilometer), fuel, or any other product/service seems to me like a perfect fit for the current industry, and especially the future autonomous vehicles and machine to machine communications.”


from: https://cointelegraph.com/news/can-blockchain-become-an-integral-part-of-autonomous-vehicles




Big Four and Blockchain: Are Auditing Giants Adopting Yet?

Last week, Big Four firm Deloitte unveiled a mobile platform designed to host blockchain networks on a small scale for demonstration purposes. The product is “based on client interest in understanding blockchain capabilities in live interactions,” as per the press release.

With this move, the Big Four companies — comprised of Deloitte, PwC, Ernst & Young (EY) and KPMG — continue their expansion into the field of blockchain. Combined, the firms brought in over $148 billion in revenue last year, as they handle over 50% of audits for both public and private companies. Consequently, their presence in the crypto space could be a reflection of the state of blockchain adoption.

So, how far have the Big Four gone while exploring distributed ledger technology (DLT), and can blockchain offer any particular perks for those companies?

Big Four: Consistent, but limited interest in blockchain

At this point, all of the Big Four companies have at least demonstrated some interest in blockchain, albeit their approaches tend to differ. Some companies, like Deloitte, have been mostly researching how this technology has affected the general market, while EY, for instance, has focused on releasing software solutions tailored for the needs of cryptocurrency businesses.

Such diversity can be explained by the very nature of those companies — being professional services networks, they offer a variety of services, including audit, tax, consulting, enterprise risk and financial advisory. It is also the reason why the Big Four have yet to fully dive into blockchain instead of merely flirting with the technology, as Cal Evans — the founder of Gresham International, a compliance and strategy firm — opined in a conversation with Cointelegraph:

Because the Big Four work in such a wide scope of sectors, they are unable (or unwilling) to dedicate serious time to blockchain. This makes sense, given that they cannot invest in every new technology set which comes along (although we view blockchain as different). One key thing to note is that many of the big four only got into blockchain when Crypto projects began using them to show more transparency. The Big Four are known to only get involved with something when their client base is using it, blockchain was and is no exception.”

“These appear to be just early steps,” Juan M. Villaverde, chief crypto analyst at Weiss Ratings, said. “They [the Big Four] have begun to recognize the potential of DLT, but they have not yet figured out how to leverage that potential.”

According to recruitment platform Indeed, as of March 2019, PwC had 40 blockchain-related job offerings, being the top recruiter in the field among the Big Four. EY came second with 17 vacancies, followed by Deloitte with 10 job offers.

Meanwhile, a more up-to-date search shows that PwC is still the most active professional services network when it comes to blockchain technology, but has only 13 positions directly mentioning the word “blockchain” left. EY has four job offerings, while apparently neither KPMG nor Deloitte are hunting for any blockchain talent at this point. That seems to confirm that the Big Four’s interest in the crypto space is existent, but moderate: PwC, for instance, has a total of 1,010 open vacancies on Indeed, meaning that its 40 blockchain-related job offers account for a minuscule fraction of that number.

Maurizio Raffone, CEO at crypto-focused consultancy and advisory firm Finetiq Ltd., told Cointelegraph:

“My impression is that the Big Four are keen on blockchain as an additional area where they can provide consulting services rather than audit services. There has been a trend by audit firms to move into more lucrative consulting and blockchain offers them yet another opportunity for that strategy.”

Related: How Blockchain Is Reshaping External Audit: Crypto Developments by PwC, KPMG, EY and Deloitte

Nevertheless, blockchain itself should also prove especially useful in the auditing market due to its transparent nature, as Evans told Cointelegraph:

“Blockchain is one of the few technology sets that can actually aid in most auditing respects. Financial auditing can be assisted by an end-to-end blockchain-based company as all transactions will be open and verifiable. They will also be contained within one ledger, which is one of the largest problems for an independent financial audit. Of course, there is more than one type of audit. Blockchain can be deployed across different sectors to make, for example, a service level agreement audit more effective. Companies could be monitored using blockchain to ensure that they are meeting compliance and the clients wishes.”

Raffone agrees that auditing practices could benefit from having blockchain in place. “I see blockchain as a cost-saving technology in the auditing space,” he told Cointelegraph. “Given the public nature of financial accounts, a blockchain solution would be rather efficient.”

However, Villaverde of Weiss Ratings is wary that the Big Four can stimulate crypto adoption only in certain scenarios. If the Big Four seek to involve themselves exclusively in the support of private blockchain solutions, the expert said, then it would hardly have any effect on the market at large, because “a private, permissioned blockchain is little more than a glorified database.” He went on, saying:

“It’s only when these firms decide to leverage the power of public blockchains, such as Ethereum or Bitcoin, that we envision these initiatives having a significant impact on public adoption.”


  • Crypto/blockchain market reports: Yes
  • Blockchain-based software solutions: Yes
  • First-hand adoption (Bitcoin acceptance, crypto ATMs): Yes
  • Investments in the crypto market: No

Having started accepting Bitcoin (BTC) as a payment for a part of its services back in 2017, PwC today is arguably the Big Four company that is the most proactive in exploring cryptocurrencies and blockchain. The company even has a major training program in place to boost its employees’ knowledge on the field.

Thus, PwC is no stranger to the crypto space and its major problems: In its 2018 study entitled “Blockchain is here. What’s your next move?” the firm highlighted regulatory uncertainty and trust as major barriers to blockchain adoption among businesses. Additionally, PwC has paid particular interest to stablecoins — another increasingly important part of the industry — and struck a partnership with decentralized lending platform Cred to advise on issuance of a United States dollar-pegged cryptocurrency.

However, the firm has not limited its blockchain presence to its advisory department. In March 2018, it partnered with leading global asset management company Northern Trust in a bid to enable real-time equity audits via blockchain and hence make the underlying transactions more transparent. Two months later, PwC invested in VeChain, a large cryptocurrency startup specializing in web services, supply chain management and anti-counterfeiting. In July of the same year, news broke that PwC was going to audit Tezos, the ambitious cryptocurrency project that was going through an internal dispute and several class-action lawsuits at the time. As per the accompanying press release published by the latter, it was allegedly the first time a “large-scale blockchain organization” had been accepted as a Big Four audit client.

Most recently, PwC announced the release of a cryptocurrency auditing software solution. Specifically, the company updated its Halo auditing suite to accommodate “entities engaging in cryptocurrency transactions” by providing independent evidence of private-public key pairing and collecting information about transactions and balances from blockchains.


  • Crypto/blockchain market reports: Yes
  • Blockchain-based software solutions: Yes
  • First-hand adoption (Bitcoin acceptance, crypto ATMs): No
  • Investments in the crypto market: No

EY has released more solo crypto-related software projects than any of its Big Four rivals. First, in April 2018, EY announced Blockchain Analyzer, becoming the first mainstream auditor to offer its services specifically for the needs of cryptocurrency companies, which allowed for the gathering of an organization’s entire transaction data from multiple blockchain ledgers. A year later, the firm followed up with a major update, introducing “the second generation” of EY Blockchain Analyzer. According to Paul Brody, the global innovation leader for blockchain at EY, the new version can be used for multiple purposes — such as audit, tax and transaction monitoring.

Moreover, in March 2019, EY unveiled another software solution — this time, for tax purposes exclusively. Dubbed Crypto-Asset Accounting and Tax, or CAAT, the tool was designed to assist its U.S. customers — both public and institutional — in filing IRS tax returns related to crypto assets.

Further, in May, EY open-sourced the code of Nightfall — its solution that enables the transfer of ERC-20 and ERC-721 tokens on the Ethereum (ETH) blockchain “with complete privacy” — and put it on GitHub. “It is an experimental solution and still being actively developed,” the company warned.

Finally, the audit titan has applied blockchain to track wine. Specifically, the platform — titled Tattoo — helps consumers across Asia determine the quality, provenance and authenticity of imported European wines. As with the aforementioned Nightall, EY’s solution enables its customers to perform secure and private transactions on the Ethereum public network by using zero-knowledge proof technology.

On top of releasing a number of blockchain-related software solutions, EY has also been supplying its regular services to crypto actors. Namely, the firm has been appointed by QuadrigaCX — a Canadian cryptocurrency exchange that went defunct under mysterious circumstances — as an independent third party to monitor the proceedings in a creditor protection case. However, some of the exchange’s former clients are not happy with how EY has been handling the case: At some point, the auditor reportedly transferred 103 Bitcoins (approximately $1 million) to the exchange’s locked-out cold wallets. According to the report released by EY in February, the loss was caused by “a platform setting error.”


  • Crypto/Blockchain market reports: Yes
  • Blockchain-based software solutions: Yes
  • First-hand adoption (Bitcoin acceptance, crypto ATMs): No
  • Investments in the crypto market: No

KPMG has not only been increasing its presence in the blockchain space, but has also been a member of the Wall Street Blockchain Alliance (WSBA) since 2017.

Over the past 12 months, it has partnered with blockchain company Guardtime to offer blockchain-based services to clients; joined forces with the U.S. Food and Drug Administration to integrate blockchain in the pharmaceutical supply chain (the initiative will reportedly speed up the process of tracking inventory and boost the accuracy of data shared between members of the supply chain); and worked with United Arab Emirates officials to successfully test a blockchain-based Know Your Customer, or KYC, application.

Additionally, KPMG collaborated with three powerful software companies — Microsoft, R3 and Tomia — to develop a blockchain-powered solution for telecom settlements. Arun Ghosh, who leads KPMG’s blockchain consultancy, said of the initiative:

“Blockchain has the potential to deliver transparency and visibility, providing the opportunity to help reduce reconciliations and increase efficiencies associated with traditional interconnect billing, roaming and partner settlement processes.”

Apart from working on blockchain-backed projects, KPMG has also studied the cryptocurrency market with an overall bullish outlook. In a November 2018 report, for instance, the auditing company invited institutional investors to “realize its potential.” which, in turn, would allegedly benefit the industry at large. “Cryptoassets have potential. But for them to realize this potential, institutionalization is needed,” the document’s authors argued.

KPMG’s latest survey on blockchain, however, suggests that most tax and finance executives are not considering adopting the technology. Regardless, David Jarczyk, innovation principal and tax leader for blockchain at KPMG, highlighted its potential benefits for the financial world:

“Blockchain is like a spreadsheet on steroids that can automate certain tasks, build greater transparency, speed and reliability, and provide a single source of transactional information.”


  • Crypto/Blockchain market reports: Yes
  • Blockchain-based software solutions: Yes
  • First-hand adoption (Bitcoin acceptance, crypto ATMs): Yes
  • Investments in the crypto market: No

Deloitte was the earliest Big Four player to delve into the crypto space, as it announced its first blockchain lab in Dublin back in May 2016. By that time, the company had already collaborated with the Bank of Ireland to complete a joint proof-of-concept blockchain trial. Today, three of the Ireland’s four largest banks are reportedly using Deloitte’s blockchain solution (developed in its Dublin branch) to verify employees’ credentials.

Also in 2016, Deloitte installed a Bitcoin ATM on the premises of its Toronto office. Placed outside the security gates so it could be accessible to the general public, the machine showcased the firm’s interest in cryptocurrencies.

Since then, Deloitte has kept a close eye on the market, releasing several reports that have recognized regulatory uncertainty and Bitcoin’s infamous scalability problem among the main hurdles for mass adoption. Nevertheless, the company’s August 2018 report entitled “Breaking Blockchain Open: 2018 Global Blockchain Survey” predicted that blockchain technology was getting closer to a breakout moment. Meanwhile, the newest issue of that report unveiled that as much as 73% of Chinese enterprises believe that blockchain is a top-five strategic priority, highlighting the nation’s focus on the technology.

This summer, Deloitte has also begun supporting a new blockchain accelerator program called Startup Studio in partnership with 22 other companies, including Fidelity and Amazon. Startup Studio will reportedly host workshops for blockchain startups to help them enhance a variety of skills important for the industry.

Finally, the Big Four giant has just rolled out its own blockchain-based platform designed to provide users with blockchain demonstrations and experiments. Called Blockchain in a Box, the new product is described as “a mobile, self-contained technology platform capable of hosting blockchain-based solutions across four small-form-factor compute nodes and three video displays, as well as networking components that enable integration with external services, such as traditional cloud technologies.”

Are the Big Four doing enough?

As for now, experts seem somewhat skeptical of the Big Four’s progress in terms of blockchain, arguing that their knowledge on the subject seems limited at this point. Evans told Cointelegraph:

There have been examples in the market where companies such as PwC have actually plagiarized and copied work from other companies within the crypto space, showing that their knowledge on the subject is incredibly limited. It is hard for a company to push something they don’t fully understand themselves.”

Either way, most accounting and auditing functions have the potential to become automated with smart contracts at some point in the future, and the Big Four would have to drastically increase their presence to stay relevant, according to Weiss Ratings’ Villaverde, who continued:

“The main question is: Will the Big Four lead in the creation of this new technology? Or will smaller, potentially more nimble, players jump into the space and take over significant market share from the Big Four?”

Whether or not the Big Four will adopt blockchain in their regular service offerings, the fact that all four firms draw up regular reports on the crypto and/or blockchain market shows that they are interested and are closely following the developments in the industry.

from: https://cointelegraph.com/news/big-four-and-blockchain-are-auditing-giants-adopting-yet


Will PwC’s New Software Solve the Cryptocurrency Auditing Problem?


Earlier this week, Big Four firm PwC announced the release of a cryptocurrency auditing software solution.

According to the multinational professional services network, its Halo auditing suite has now been updated to accommodate “entities engaging in cryptocurrency transactions.” The new tool reportedly allows PwC to establish crypto asset ownership and gather information about transactions and balances from blockchains.

While it is currently unclear whether Halo will now be picked up by cryptocurrency-related businesses, PwC’s move seems to mark another landmark step for the industry.

Specifics of auditing in the crypto space

Auditing in the crypto space is still a developing practice that varies substantially between stakeholders, as Maurizio Raffone, founder and CEO of Finetiq, told Cointelegraph. He also drew a parallel between on-chain and off-chain audits, explaining:

“On one side, crypto exchanges have historically focused on cyber-security measures, processes and procedures dealing with corporate governance and so forth, just like most other businesses. There are then on-chain audits that tend to focus on checking for bugs and correct workflow of a blockchain protocol or, more often, smart contracts.”

Indeed, the Association of Chartered Certified Accountants (ACCA) — a global body for professional accountants — believes that “robust and consistent” accounting treatment is required for different types of cryptocurrencies, as Narayanan Vaidyanathan, head of business insights at ACCA, told Cointelegraph via email:

“This is currently an on-going challenge that is still under deliberation within the accountancy profession. Is a crypto currency cash, inventory, a financial asset, or an intangible asset? Because if there are accounting issues, it therefore as a downstream implication also becomes an audit issue.”

Auditing services might also depend on how companies utilize cryptocurrencies, adds David Martin, chief investment officer at Blockforce Capital:

“It is important to differentiate how a firm is using digital assets in its business dealings. For instance, a company that uses cryptocurrency as a way to make transactions requires different services than an investment firm that is holding digital assets as a form of investment.”

Perhaps the most notable example here would be Tether, the company behind the eponymous stablecoin (USDT) and a wholly owned subsidiary of iFinex — which also owns crypto exchange Bitfinex.

Related: Tether, Bitfinex Stay Afloat Amid Controversy

In early 2018, Tether’s plans to release a third-party audit fell through, although the company had previously announced that it was undergoing a “balance sheet audit” by Friedman LLP, a New York-based accounting firm.

However, in late June 2018, a document was finally produced — although it turned out to be a memorandum rather than an audit performed by an auditing company. As Tether’s general counsel explained at the time, mainstream accounting firms would not conduct official audits on companies working with cryptocurrencies.

While it is unclear whether Tether was willing to provide all the required information to third-party auditors (which could be the reason it could not complete the inspection), the general problem seems to persist within the crypto industry. Ben Tsai, president and managing partner of Wave Financial, told Cointelegraph:

“Cryptocurrency companies definitely have an audit problem. Major players such as exchanges, stablecoins and hedge funds are not consistently providing proof of solvency despite the fact they need to.”

According to experts, the regulatory uncertainty within the space might be part of the issue. As Tsai told Cointelegraph, the current regulatory climate allows crypto businesses to turn to auditing firm only in case of emergency:

“Regulation does not currently require ‘proof of funds’ for stablecoins and for exchanges, which is the main reason these audits aren’t taking place. Mostly, the big four come in and audit companies after they ‘mess up.’”

Indeed, as Martin opines, cryptocurrencies remain in “a precarious situation” in regard to regulation:

“Regulatory systems are primarily reactive and laws haven’t necessarily caught up to the innovation of digital assets quite yet. The financial reporting standards in the US which are set by GAAP (Generally Accepted Accounting Principles) don’t currently directly address the accounting for cryptocurrencies. Nuances like this make auditing business activities involving digital assets and cryptocurrencies inherently difficult.”

The Big Four’s relationship with cryptocurrencies

The Big Four is a commonly accepted term used to refer to the four biggest auditing firms in the world: Ernst & Young (EY), PwC, Deloitte and KPMG. Handling the vast majority of audits for companies around the world, both private and public, they are considered a cornerstone of the mainstream financial world.

Notably, during the past few years, the Big Four have been showing particular interest in the crypto industry. However, all of the major auditors have established long-term blockchain roadmaps to remain relevant in the space.

Related: How Big Four Auditors Delve Into Blockchain: PwC, Deloitte, EY and KPMG Approaches Compared

PwC has arguably been the most active Big Four company when it comes to cryptocurrencies. It started accepting bitcoin (BTC) for its services back in 2017 and announced a training program to enhance its employees’ blockchain knowledge in the following year.

Further, PwC has also recognized the regulatory uncertainty, naming it one of the main obstacles on the road to mass blockchain adoption in its 2018 report entitled “Blockchain is here. What’s your next move?” The Big Four giant had also pinpointed the lack of insurance as another problem hindering crypto businesses in a separate interview with Reutres.

Moreover, PwC has not only recognized the importance of the field, but has started to explore it firsthand. First, in May 2018, the auditing firm invested in VeChain, a major cryptocurrency project specializing in the Internet of Things (IoT), supply chain management and anti-counterfeiting.

Related: PwC’s Pierre-Edouard Wahl: Blockchain Can Bring Positive Competition to Swiss Banking Space

In March 2019, PwC began conducting a trial of its blockchain-powered platform for ensuring the integrity of employee credentials. By the end of the same month, the company had become the top recruiter for blockchain-related jobs on headhunting platform Indeed, being responsible for as many as 40 blockchain-related job offers there (EY had 17, Deloitte had 10, while KPMG didn’t have any offers). PwC had 400 blockchain experts on board in 2018 to cater to cryptocurrency-related clients, according to the Financial Times, while this number could be higher at this point.

“We are devoting significant resources to how we might provide audit services in not just cryptocurrency, but blockchain,” a PwC representative told the publication at the time.

However, PwC wasn’t the first Big Four venture to adjust its auditing tools for the needs of cryptocurrency companies. In that sense, it has been outraced by the competing EY, which rolled out its blockchain analytics program called “Blockchain Analyzer” in April 2018.

So, can PwC’s new solution outshine its rivals in the crypto space and will it actually have an impact on the industry at all?

Details about the new version of Halo

As PwC stated in the press release, the tool newly added to its Halo auditing suite can be used to “provide assurance services for entities engaging in cryptocurrency transactions.”

The firm claims that, after the update, the Halo suite permits PwC to provide independent evidence of private-public key pairing, which is used to establish crypto asset ownership.

“Proof of ownership is really the main blocking point,” notes Tsai of Wave Financial. He told Cointelegraph:

“We had a California state auditor come into the office who struggled to grasp what ‘ownership’ of cryptocurrencies looks like. Auditors are used to custodial statements, paperwork and other forms of ‘proof’. With the blockchain, only your private key proves ownership, which makes it difficult to show ownership without exerting control over the funds (moving them around, etc.).”

Therefore, if Halo can actually prove ownership of funds and auditors can trust the tool, it would “speed up audits and cut costs and headaches,” Tsai concluded.

Raffone also argued that Halo might prove to be efficient, given that it focuses on a specific on-chain audit niche:

“This is a useful tool for sure, focused on transactional history and balances which seems suitable for institutional investors and fund managers, entities that normally require audits relating to financial transactions and assets ownership.”

Further, PwC’s Halo can now reportedly gather information about transactions and balances from blockchains. That, according to Martin of Blockforce Capital, is also a potentially effective feature.

“The Halo platform offers an easy-to-use way for firms to access blockchain information without having to spend manpower and resources that could be better spent somewhere else,” Martin told Cointelegraph, elaborating:

“For instance, the Bitcoin blockchain is open-source and can be viewed by anyone. However, just because the information is available doesn’t mean it doesn’t require a unique skill set to access.”

According to PwC, the upgraded version of the Halo suite is already being employed to support audits of clients involved with cryptocurrencies and assisting companies for which the firm is not the auditor in implementing processes and controls necessary to obtain assurance reports from their auditors. Theoretically, that could ease cryptocurrency-related audits not only for PwC, but the industry at large.

Still, the Big Four firm notes that the tool has its limitations: namely, client’s control environment, and, “at this stage,” the breadth of tokens supported by Halo. The software reportedly supports bitcoin (BTC), bitcoin cash (BCH), bitcoin gold (BTG), bitcoin diamond (BCD), litecoin (LTC), ether (ETH), OAX (ERC-20 token) and XRP.

“These considerations will be key when determining whether we are comfortable to accept an audit engagement,” PwC wrote in the press release.

It is currently unclear whether Halo is deployable in all 158 countries that PwC claims to be operating in. Cointelegraph has reached out to the Big Four company to clarify this, but has not heard back as of publication.

Related: Daniel Diemers From PwC Strategy& Switzerland: Adoption of New Technologies Requires More Education

Experts suggest that the vast geography should not be a problem for Halo, however. ACCA’s Vaidyanathan reminded that the international auditing standards (ISAs) apply globally when asked about potential clashes.

Raffone of Finetiq, in turn, stressed the technical nature of PwC’s solution:

“The audit function provided by Halo is purely technical and doesn’t seem driven by any regulatory requirement, therefore it seems a ‘upon request’ service that can be deployed across jurisdictions. Although I don’t think Halo fills any regulatory need per se currently, it is certainly comparable to similar investment fund audit services and once the crypto industry becomes mainstream, I would expect this sort of audit service to be required by regulators.”

Martin maintains a similar position. According to the Blockforce Capital’s CIO, PwC should be well-poised to take on the regulatory complexities, given its experience with running auditing and accounting practices in multiple countries:

“While adjusting to different jurisdictions is difficult, PwC is in a great position to take on the task. They are a highly respected accounting firm and have the resources to apply to such an endeavor.”

Do things get better as we go along?

In the end, the problem seems to come down to the aspect of adoption: While the cryptocurrency industry continues to grow, the recognition from mainstream corporations — such as the Big Four — could speed up this process. That is why PwC’s work with Halo is “validating” the institutionalization of the crypto space, in Tsai’s view.

On the other hand, the need for crypto-specific audits could be fulfilled even without the participation PwC, Deloitte and others, according to what Raffone told Cointelegraph:

“A whole host of specialist firms are emerging as leading crypto audit service providers, challenging the Big Four and their cost structure. Even IBM is getting in the game with a recently patented solution to audit blockchains.”

While time will tell if Halo turns out to be a viable solution for the crypto space, the remaining Big Four players have now been challenged to release their own software that would be on par with Halo in terms of functionality.


from: https://cointelegraph.com/news/will-pwcs-new-software-solve-the-cryptocurrency-auditing-problem



Thieves Used Audio Deepfake of a CEO to Steal $243,000

The heist is just a preview of how unprepared we are for AI-powered cybercrime.

In what may be the world’s first AI-powered heist, synthetic audio was used to imitate a chief executive’s voice and trick his subordinate into transferring over $240,000 into a secret account, The Wall Street Journal reported last week.

The company’s insurer, Euler Hermes, provided new details to the Washington Post on Wednesday but refused to name the company involved. The company’s managing director was called late one afternoon and his superior’s voice demanded the subordinate wire money to a Hungarian account to save on “late-payment fines”, sending the financial details over email while on the phone. A spokeswoman from Euler Hermes said, “The software was able to imitate the voice, and not only the voice: the tonality, the punctuation, the German accent.”

The thieves behind the voice would call back to demand a second payment, which raised the managing director’s suspicions and led to him calling his boss directly. In an email to Euler Hermes, the director said that the synthetic “‘Johannes’ was demanding to speak to me whilst I was still on the phone to the real Johannes!”

Over the past few years, deepfakes have been growing increasingly sophisticated. Online platforms fail to detect it, and companies struggle with how to handle the resulting fallout. The constant evolution of deepfakes means that simply detecting them will never be enough due to the nature of the modern internet, which guarantees it an audience by monetizing attention and fostering the production of viral content. This past June, convincing deepfakes of Mark Zuckerberg were published to Instagram and kept up shortly after Facebook refused to delete a manipulated video of Nancy Pelosi. There is still no clear consensus on how Facebook should’ve handled that situation or future ones.

All of this is exaggerated by the data monetization models of companies like Facebook and Google. Techno-sociologist Zeynep Tufecki warns that companies like Facebook rely on creating a “persuasion architecture” that “make us more pliable for ads [while] also organizing our political, personal and social information flows.” That core dynamic, combined with the constant evolution of deepfake technology, means this problem will likely get worse across all online platforms unless the companies behind them can be convinced to change their business models.

from: https://www.vice.com/en_us/article/d3a7qa/thieves-used-audio-deep-fake-of-a-ceo-to-steal-dollar243000


A Site Faking Jordan Peterson’s Voice Shuts Down After Peterson Decries Deepfakes

The maker of NotJordanPeterson.com, a Jordan Peterson Voice simulator that used AI to match his voice to any text inputs, took the website down, after the real Peterson freaked out.

by Samantha Cole

The owner of NotJordanPeterson.com, a website for generating convincing clips of Jordan Peterson saying whatever you want using AI, shut down their creation this week after the real Peterson announced his displeasure and raised the possibility of legal action.

While the site was up, a 21-second recording greeted visitors to the site, saying in Peterson’s voice, “This is not Jordan Peterson. In fact, I’m a neural network designed to sound like Dr. Peterson.”

The clip implored the visitor to type some text into a box, that would be fed into a neural network trained on hours of Peterson’s actual voice, and generated into audio that sounded a lot like the real thing.

“The Deep Fake artists need to be stopped, using whatever legal means are necessary, as soon as possible.”

Several media outlets tested the program and published the results, making him pantomime feminist texts and vulgarities. Aside from the outrageous content, the results sounded a lot like the real thing.

It turns out that Peterson—a controversial Canadian professor known for his lectures defending the patriarchy and denying the existence of white privilege while decrying “postmodern neo-Marxists,”—did not find NotJordanPeterson.com flattering.

“Something very strange and disturbing happened to me this week,” Peterson wrote on his website. “If it was just relevant to me, it wouldn’t be that important (except perhaps to me), and I wouldn’t be writing this column about it. But it’s something that is likely more important and more ominous than we can even imagine.”

He then goes on to spend over 1,300 words decrying deepfakes—algorithmically-generated face-swapped videos, not fake audio but sometimes combined with fake voices—as a threat to politics, personal privacy, and veracity of evidence, and ends with a vague allusion toward making fake audio and video illegal. Or, possibly, suing creators.

“Wake up. The sanctity of your voice, and your image, is at serious risk,” he wrote. “It’s hard to imagine a more serious challenge to the sense of shared, reliable reality that keeps us linked together in relative peace. The Deep Fake artists need to be stopped, using whatever legal means are necessary, as soon as possible.”

After Peterson published this blog post, the NotJordanPeterson website shut down operations. “In light of Dr. Peterson’s response to the technology demonstrated by this site … and out of respect for Dr. Peterson, the functionality of the site will be disabled for the time being,” the site owner wrote.

The site owner told Motherboard that despite Peterson’s hinting at legal action in his blog, Peterson isn’t suing him, and he took NotJordanPeterson down after he saw his negative reaction. At the time of publication, Peterson has not responded to Motherboard’s request for comment.

It’s interesting to see a public figure like Peterson address deepfakes so directly. Plenty of other celebrities have been subject to the algorithmic face-swap and fake-audio treatment, including podcast host Joe Rogan, Nicholas Cage, and Elon Musk.

The AI models that generate fake video or audio rely on a huge amount of existing data to analyze and “learn” from. As it happens, refusing to shut the fuck up—as so many powerful men are wont to—is great training material for an AI algorithm to train a realistic model of someone on.

Before Peterson, the closest any powerful men have come to commenting on deepfakes as a phenomenon is Mark Zuckerberg, after an artist created a deepfake of him saying some insidious things. The media coverage of that satirical art project forced his platform to enact policies around handling fake video content.

But what Peterson is implying in this screed—that deepfakes, even as art, should be stopped, banned, and otherwise made illegal—is something legislators and AI ethicists have grappled with since the dawn of deepfakes two years ago. Many experts say that regulating deepfakes is a bad idea, because trying to do so could chill First Amendment rights and free speech online.

Peterson mentions Rep. Yvette Clark’s proposed DEEPFAKES Accountability Act as a potential solution to his embarrassment, and what he sees as the dangers of deepfakes as a whole. The Electronic Frontier Foundation notes that in that bill, “while there is an exception for parodies, satires, and entertainment—so long as a reasonable person would not mistake the ‘falsified material activity’ as authentic—the bill fails to specify who has the burden of proof, which could lead to a chilling effect for creators.”

As a big fan of free speech, Peterson of all people should be wary of suggesting we sue the pants off anyone who makes an unflattering mimicry of us online. If he really wants to do something to combat the real dangers of deepfakes, he could start with advocating for improving the legislation that does exist to get help for victims of revenge porn and non-consensual nudes. Those are the people who are really impacted by harassment and intimidation online.


There Is No Tech Solution to Deepfakes

Funding technological solutions to algorithmically-generated fake videos only puts a bandage on the deeper issues of consent and media literacy.

Every day, Google Alerts sends me an email rounding up all the recent articles that mention the keyword “deepfake.” The stories oscillate between suggesting deepfakes could trigger war and covering Hollywood’s latest quirky use of face-swapping technology. It’s a media whiplash that fits right in with the rest of 2018, but this coverage frequently misses what we should actually fear most: A culture where people are fooled en masse into believing something that isn’t real, reinforced by a video of something that never happened.

In the nine months since Motherboard found a guy going by the username “deepfakes” posting face-swapped, algorithmically-generated porn on Reddit, the rest of the world rushed straight for the literal nuclear option: if nerds on the internet can create fake videos of Gal Gadot having sex, then they can also create fake videos of Barack Obama, Donald Trump, and Kim Jong Un that will somehow start an international incident that leads to nuclear war. The political implications of fake videos are so potentially dangerous that the US government is funding research to automatically detect them.

In April, the US Defense Advanced Research Projects Agency (DARPA)’s Media Forensics department awarded nonprofit research group SRI International three contracts to find ways to automatically detect digital video manipulations. Researchers at the University at Albany received funding from DARPA to study deepfakes, and found that analyzing the blinks in videos could be one way to detect a deepfake from an unaltered video.

The worry that deepfakes could one day cause a nuclear war is a tantalizing worstcase scenario, but it skips right past current and pressing issues of consent, media literacy, bodily autonomy, and ownership of one’s own digital self. Those issues are not far-fetched or theoretical. They are exacerbated by deepfakes today. Will someone make a fake video of President Donald Trump declaring war against North Korea and get us all killed? Maybe. But the end of humanity is the most extreme end result, and it’s getting more attention than issues around respecting women’s bodies or assessing why the people creating deepfakes felt entitled to using their images without permission to begin with.

Until we grapple with these deeply entrenched societal issues, DARPA’s technical solutions are bandages at best, and there’s no guarantee that they will work anyway.

To make a believable deepfake, you need a dataset comprised of hundreds or thousands of photos of the person’s face you’re trying to overlay onto the video. The solution proposed by researchers at the University at Albany assumes that these photos, or “training datasets,” probably don’t include enough images of the person blinking. The end result is a fake video that might look convincing, but where people don’t blink naturally.

But even those researchers concede that this isn’t a totally reliable way to detect deepfakes. Siwei Lyu, a professor at the State University of New York at Albany, told MIT Technology Review that a quality deepfake could get around the eye-blinking detection tool by collecting images in the training dataset that show the person blinking.

Lyu told MIT Tech Review that his team has an even better technique for detecting deepfakes than blinks, but declined to say what it is. “I’d rather hold off at least for a little bit,” Lyu says. “We have a little advantage over the forgers right now, and we want to keep that advantage.”

This exemplifies the broader problem with trying to find a technical solution to the deepfakes problems: as soon as someone figures out a way to automatically detect a deepfake, someone will find a way around it. Platforms are finding out that it’s not as easy as block a keyword or ban a forum to combat fake porn showing up on their sites. Image host Gfycat, for example, thought it could use automated tools to detect algorithmically-generated videos on its platform and kick them off, but months after it announced this effort, we still found plenty of deepfakes hosted there.

The algorithms themselves will, by design, stay locked in a cat-and-mouse game of outdoing each other. When one solution for detection pops up—like the blinks—the other will learn from it, and match it. We’ve seen this happen with bots that are continually getting better at solving CAPTCHAs, forcing bot-detection systems to make the CAPTCHAs more difficult to solve, which the bots learn to beat, and so, on infinitely.

This doesn’t mean that we should throw our hands up and stop trying to find tech solutions to complex problems like deepfakes. It means that we need to recognize the limitations of these solutions, and to continue to educate people about technology and media, when to trust what they see, and when to be skeptical.

Florida senator Marco Rubio got it right when he talked about deepfakes at a Heritage Foundation forum last month: “I think the likely outcome would be that [news outlets] run the video, with a quotation at the end saying, by the way, we contacted senator so-and-so and they denied that that was them,” he said, talking about a hypothetical scenario where a deepfake video could spread as a news tip to journalists. “But the vast majority of the people watching that image on television are going to believe it.”

Fake news isn’t new, and malicious AI isn’t new, but the combination of the two, plus a widespread destabilized trust in media is only going to erode our sense of reality even more.

This isn’t paranoia. We saw a small glimpse of this with the spoof video that Conservative Review network CRTV made of Alexandria Ocasio-Cortez about a month after she won the Democratic congressional nomination in New York. CRTV cut together a video of Ocasio-Cortez giving an interview to make it seem like she bombed it. This wasn’t a deepfake by any means—it was rudimentary video editing. Still, more than one million people viewed it and some people fell for it. If you already thought poorly of Ocasio-Cortez, the video could reinforce your beliefs.

If people are gullible enough to believe in conspiracy theories—so much so that they show up at Trump rallies with signs and shirts supporting QAnon—we don’t need AI to fool anyone into believing anything.

The first headline we published for a deepfakes story, back in December, said: “AI-Assisted Fake Porn Is Here and We’re All Fucked.” We stand by that. We are still deeply fucked. Not because a deepfake is going to lead to nuclear war, but because we have so many problems we need to solve before we worry about advanced detection of AI-generated video.

We need to figure out how platforms will moderate users spreading malicious uses of AI, and revenge porn in general. We have to solve the problems around consent, and the connection between our bodily selves and our online selves. We need to face the fact that debunking a video as fake, even if it’s proven by DARPA, won’t change someone’s mind if they’re seeing what they already believe. If you want to see a video of Obama saying racist things into a camera, that’s what you’ll see—regardless of whether he blinks.

The Department of Defense can’t save us. Technology won’t save us. Being more critically-thinking humans might save us, but that’s a system that’s lot harder to debug than an AI algorithm.


This Program Makes It Even Easier to Make Deepfakes

Unlike previous deepfake methods, FSGAN can generate face swaps in real time, with zero training.

A new method for making deepfakes creates realistic face-swapped videos in real-time, no lengthy training needed.

Unlike previous approaches to making deepfakes—algorithmically-generated videos that make it seem like someone is doing or saying something they didn’t in real life—this method works on any two people without any specific training on their faces.

Most of the deepfakes that are shared online are created by feeding an algorithm hundreds or thousands of images of a specific face. The algorithm “trains” on that specific face so it can swap it into the target video. This can take hours or days even with access to expensive hardware, and even longer with consumer-grade PC components. A program that doesn’t need to be trained on each new target is another leap forward in making realistic deepfakes quicker and easier to create.

“Our method can work on any pair of people without specific training,” the researchers said in a video presenting their method. “Therefore, we can produce real-time results on unseen subjects.”

Researchers from Bar-Ilan University in Israel and the Open University of Israel posted their paper, “FSGAN: Subject Agnostic Face Swapping and Reenactment,” to the arXiv preprint server on Friday. On their project page, the researchers write that the open-source code is impending; in the paper, they say that they’re publishing the details of this program because to suppress it “would not stop their development,” but rather leave the public and policymakers in the dark about the potential misuse of these algorithms.

In a video demonstrating the FSGAN program, the researchers show how it can overcome hair and skin tone to swap faces seamlessly:


Similar to how the single-shot method developed by Samsung AI used landmarks on the source and target’s faces to map the Mona Lisa’s face to make her “speak,” FSGAN pinpoints facial landmarks, then aligns the source face to the target’s face.

The FSGAN program itself wasn’t cheap or easy to make: The researchers say in their paper that it required eight Nvidia Tesla v100 GPU processors—which can cost around $10,000 each for consumers—to train the generative adversarial network that the program then uses to create deepfakes in real-time.

On their project website, the researchers say that the project code will eventually be available on GitHub, a platform for open-source code development. Assuming the researchers make a pre-trained AI model available, it’s likely that using it at home won’t be as resource-intensive as it was to train it from scratch in a lab.

“Our method eliminates laborious, subject specific data collection and model training, making face swapping and reenactment accessible to non-experts,” the researchers wrote. “We feel strongly that it is of paramount importance to publish such technologies, in order to drive the development of technical counter-measures for detecting such forgeries, as well as compel lawmakers to set clear policies for addressing their implications.”

Vergleichsportal Check24 stellt Antrag auf Vollbank-Lizenz

5. September 2019

Von Heinz-Roger Dohms

Paukenschlag in der deutschen Bankenbranche: Das Vergleichsportal Check24, das Finanzprodukte in signifikant zweistelliger Milliardenhöhe jährlich vermittelt, hat bei der Bafin einen Antrag auf Erteilung einer Vollbank-Lizenz* gestellt. Entsprechende Exklusiv-Informationen von Finanz-Szene.de bestätigte das Unternehmen gestern auf Anfrage: „Wir befinden uns aktuell im Prüfprozess und hoffen, die Lizenz bis nächstes Jahr zu erhalten“, sagte Geschäftsführer Christoph Röttele.

Wie weit die Pläne gediehen sind, lässt sich daran erkennen, dass Check24 schon vor Monaten eine Tochterfirma namens „C24 GmbH“ gegründet hat, über die der Antrag bei der Finanzaufsicht gestellt wurde. Als Geschäftsführer firmiert Matthias Orlopp, früherer Finanzchef des Vergleich-Giganten. Daneben gehören dem Management laut der C24-Website, die dieser Tage liveging, zwei gestandene Banker an: Robert Genz, zuletzt Risikochef der Hyundai Bank. Und der langjähriger Targobank-Vorstandschef Franz Josef Nick, der beim Düsseldorfer Ratenkreditfinanzierer 2015 ausschied. „Sobald die Lizenz erteilt ist, werden Herr Nick und Herr Genz die Leitung übernehmen“, sagte Röttele.

Wohin das Geschäftsmodell der künftigen „C24 Bank“ gehen soll, lässt sich dem Webauftritt andeutungsweise entnehmen. Dort prangt der Claim „Die Open Banking Plattform“, ergänzt um den selbstbewussten Zusatz: „Erleben Sie 2020 die neue Dimension des mobilen Bankings“. Was genau damit gemeint ist, wollte Röttele zwar nicht verraten. Er betonte allerdings, „dass es uns ausdrücklich nicht darum geht, in Wettbewerb zu den etablierten Banken zu treten. Vielmehr stellen wir seit Jahren fest, dass die regulatorischen Anforderungen im Finanzbereich immer weiter steigen. Darum war uns seit langem klar: Wenn wir unser Geschäftsmodell weiterentwickeln wollen, dann brauchen wir früher oder später eine eigene Bafin-Lizenz. “ Das bedeute aber nicht, dass Check24 eine klassische Bank werde. Sondern: „Unsere Vision ist die einer offenen Plattform, die wir allen Bankpartnern  zur Verfügung stellen wollen“, so Röttele.

Tatsächlich hat sich Geschäftsmodell von Check24 in den vergangenen Jahren verändert. Die Münchner treten nicht mehr nur als Vergleichsportal auf, das für die Vermittlung von Produkten Provisionen kassiert – sondern bietet auch selbst Produkte an. Ein Beispiel hierfür sind die hauseigenen Ratenkredite namens „Kredite24“. Allerdings: Mangels Banklizenz brauchte Check24 für die Entwicklung solcher Produkte bislang die Unterstützung einer Partnerbank, in diesem Fall die SWK Bank kommt. Mit eigener Lizenz ist Check24 auf den White-Label-Partner nicht mehr zwingend angewiesen oder gewinnt zumindest deutlich mehr Unabhängigkeit.

Eine ähnlich Konstellation lässt sich – wenn man genau hinschaut – auch im Bereich Geldanlage ausmachen: Schon vor einem Jahr enthüllte Finanz-Szene.de, dass Check24 beim Tagesgeld mit dem Hamburger Fintech Deposit Solutions kooperiert. Da allerdings auch die Hanseaten keine eigenen Banklizenz besitzen, sind sie ihrerseits auf die Hilfe der Sutor Bank angewiesen. Das bedeutet in letzter Konsequenz: Wenn die Kunden ihre Ersparnisse via Check24 bei einer ausländischen Hochzinsbank parken wollen, eröffnen sie de facto ein Konto bei der Sutor Bank. Auch hier gilt künftig: Mit einer eigenen Banklizenz kann Check24 die Abhängigkeit von solchen White-Label-Partner deutlich verringern.

Dann gibt es noch ein weiteres Geschäftsfeld, auf dem die Banklizenz für Check24 von Nutzen sein könnte. So beherbergt das Vergleichsportal seit einiger Zeit eine Rubrik, die sich „Profis“ nennt – und die darauf hinausläuft, dass die Nutzer über Check24 zum Beispiel einen Handwerker, einen Klavierlehrer oder einen Hochzeitsfotografen finden können. Das Besondere hier: Anders als beim Tagesgeld, beim Ratenkredit oder bei der Kfz-Versicherung tritt das Vergleichsportal in diesem Bereich nicht nur als Produktvermittler aus, sondern bietet dem Kunden auch die Abwicklung des Zahlungsverkehrs an. „Weil wir dieses Geld als Check24 aber weder vereinnahmen noch halten noch auszahlen dürfen, brauchen wir auch hier einen White-Label-Partner, nämlich den US-Zahlungsdienstleister Stripe“, sagt Röttele. Auch in dem Fall könnte Check24 mit Banklizenz in der Zukunft freier agieren.

Freilich: All das sind nur Beispiele, wo die Lizenz den Münchnern jetzt schon helfen würde. Man darf aber davon ausgehen, dass Check24 auf weitere Einsatzfelder abzielt – die aber erst dann sichtbar werden, wenn die Bafin-Genehmigung irgendwann da ist. Eher wenig hat die Vollbank-Lizenz hingegen mit einer Meldung aus dem Juli zu tun: Damals hatte der Vergleichs-Gigant mitgeteilt, eine sogenannten „PSD2-Lizenz“ erhalten zu haben, also eine Zulassung der Bafin zur Zahlungsauslöse- und Kontoinformations-Dienste: „Dabei ging es um andere Anwendungen, nämlich in erster Linie um unseren Kontomanager, mit dem Kunden prüfen können, welche Verträge etwa beim Strom- oder Gasanbieter auslaufen und wie sie bei einem Neuabschluss möglicherweise Geld sparen kann“, so Röttele.


  • Wir wissen, dass der Begriff „Vollbank-Lizenz“ im Grunde quatsch ist, weil „Banklizenz“ genügen würde. Es ging uns bei der Wortwahl darum, dem etwaigen Missverständnis vorzubeugen, wir hätten es hier mit irgendwelchen „Light-Lizenzen“ im Sinne von ZAD, KID, E-Money oder so zu tun … Nope, haben wir nicht. Es geht i.d.T. exakt um das Ding, das z.B. die Deutsche Bank oder die Commerzbank auch haben.


from: https://www.finanz-szene.de/digital-banking/vergleichsportal-check24-stellt-antrag-auf-vollbank-lizenz/




Uno-Bericht: 7 Plattformen beherrschen den Weltmarkt

GAFA, Microsoft, Tencent, Alibaba.

Laut dem erstmals erstellten „Digital Economy Report 2019“ der Uno dominieren sieben Plattformen aus den USA und China den weltweiten Markt, darunter Microsoft, Amazon und Alibaba.

Die weltweite Digitalwirtschaft wird von sieben Internet- und Tech-Konzernen aus den USA und China sowie deren Plattformen dominiert. Das hat der erstmals erstellte „Digital Economy Report 2019“ ergeben, den die Uno am Mittwoch vorgestellt hat. Die Uno spricht dabei von sogenannten „Superplattformen“, auf die zwei Drittel des weltweiten Marktes entfallen sollen, wie ORF.at berichtet. Bei diesen Plattformen handelt es sich der Uno-Studie zufolge um Microsoft, Apple, Amazon, Google und Facebook sowie Tencent und Alibaba.

China und USA: 90 Prozent Marktanteil an digitaler Wirtschaft

Noch größer wird die Kluft zwischen US- und chinesischen Konzernen und dem Rest der Welt, wenn man alle Internetplattformen in die Rechnung einbezieht. Dann sollen laut Uno die großen Konzerne aus den USA und China auf einen weltweiten Marktanteil von 90 Prozent kommen. Europäische Unternehmen kommen auf gerade einmal vier Prozent. Die übrigen sechs Prozent verteilen sich auf alle übrigen Länder der Welt. Die Uno forderte vor diesem Hintergrund zu globalen Anstrengungen auf, um diesen Zustand zu ändern.

Dazu gehört laut Uno-Generalsekretär Antonio Guterres auch, dass mehr als die Hälfte der Welt keinen oder nur einen geringen Zugang zum Internet hat. Es müsse daran gearbeitet werden, „diese digitale Kluft schließen“. Interessanterweise arbeiten derzeit gerade große US-Plattformen sowie chinesische Konzerne daran, das Internet in ländliche und entlegene Gebiete zu bringen. Während die US-Tech-Riesen Facebook, Amazon und Google dies mithilfe von Ballons, Drohnen oder Satelliten schaffen wollen, setzt China auf das Infrastrukturprojekt „Digitale Seidenstraße“.

Drei viertel aller Blockchain-Patente stammen aus China oder den USA

Neben dem 90-prozentigen Marktanteil bei den großen digitalen Konzernen sieht die Uno-Studie auch in weiteren Bereichen eine Dominanz von China und den USA. So verantworten die beiden Länder 75 Prozent aller Blockchain-Patente sowie mehr als 75 Prozent des weltweiten Cloud-Marktes. Zudem stammen rund die Hälfte der weltweiten Ausgaben für das Internet der Dinge aus China und den USA, wie Xinhua schreibt.

from: https://t3n.de/news/digitalwirtschaft-laut-uno-7-usa-1194897/


local copy: https://www.bgp4.com/wp-content/uploads/2019/09/Digital-Economy-Report-2019-der2019_en.pdf

original link: https://unctad.org/en/PublicationsLibrary/der2019_en.pdf


UN Digital Economy Report 2019

Value Creation and Capture: Implications for Developing Countries


The rapid spread of digital technologies is transforming many economic and social activities. While creating many new opportunities, widening digital divides threaten to leave developing countries, and especially least developed countries, further behind. A smart embrace of new technologies, enhanced partnerships and greater intellectual leadership are needed to redefine digital development strategies and the future contours of globalization.

This first edition of the Digital Economy Report – previously known as the Information Economy Report − examines the scope for value creation and capture in the digital economy by developing countries. It gives special attention to opportunities for these countries to take advantage of the data-driven economy as producers and innovators – but also to the constraints they face – notably with regard to digital data and digital platforms.

Digital advances have already led to the creation of enormous wealth in record time, but this is highly concentrated in a small number of countries, companies and individuals. Meanwhile, digitalization has also given rise to fundamental challenges for policymakers in countries at all levels of development. The Report presents recent trends and discusses key policies for value creation and capture in the digital economy, notably with regards to entrepreneurship, data, trade, competition, taxation, intellectual property and employment.

These are early days in the digital era and there are still more questions than answers about how to deal with the digital challenge. Given the absence of relevant statistics and empirical evidence, as well as the rapid pace of technological change, decision-makers face a moving target when trying to adopt sound policies relating to the digital economy. The Report provides valuable insights and analyses to support policymakers at the national and international levels to ensure that no one is left behind by the fast-evolving digital economy.




Die 10 innovativsten Volkswirtschaften der Welt

von  am 05.09.2019

Krebsforschung, Fleischersatzprodukte und Smart-Home-Technologien zählen zu den großen Entwicklungen unserer Zeit. Doch welche Länder sind weltweit führend bei Forschung und Entwicklung? Ein aktuelles Bloomberg-Ranking zeigt die innovativsten Länder nach Indexwert. Darin steht Deutschland auf dem zweiten Platz.

In dem Ranking wurden Faktoren wie die Forschungs- und Entwicklungsausgaben, die Anzahl der inländischen Patentanmeldungen und die Zahl der inländischen öffentlichen High-Tech-Unternehmen mit einbezogen. Auf Rang eins landete wie bereits im Vorjahr Südkorea, mit einem Indexwert von 87,38 von 100 möglichen Punkten, wie die Statista-Grafik zeigt. Deutschland liegt nur knapp dahinter mit einem Wert von 87,30. Ebenfalls unter den Top 5 steht die Schweiz, die in diesem Jahr den vierten Platz der innovativsten Volkswirtschaften belegt.


from: https://de.statista.com/infografik/19237/die-innovativsten-laender-der-welt/



Youth Myth: Founders of Successful Tech Companies Are Mostly Middle-Aged

Aug. 29, 2019

It took an entrepreneur to reimagine the mundane home thermostat as an object of beauty — and then to make a fortune based on that vision.

The entrepreneur was Tony Fadell, who had that thermostat epiphany after decades in the tech industry, including at companies like Apple. Mr. Fadell embodied his idea in a new company, Nest, which he started with the help of a colleague from Apple in 2010, at age 41.

The Nest thermostat had a sleek and intuitive design, smartphone connectivity and the ability to learn its owner’s temperature-setting habits. The product was a big hit, and within a few years Google acquired Nest for $3.2 billion.

Mr. Fadell’s deep experience and relatively mature age when he started Nest are typical of superstar entrepreneurs, who are rarely fresh out of college — or freshly dropped out of college. That’s what a team of economists discovered when they analyzed high-growth companies in the United States. Their study is being published in the journal American Economic Review: Insights.

The researchers looked at start-ups established between 2007 and 2014 and analyzed the top 0.1 percent — defined as those with the fastest growth in employment and sales. The average age of those companies’ founders was 45.

There are, of course, famous counterexamples. Mark Zuckerberg was 19 when he co-founded Facebook. Bill Gates was 19 when he founded Microsoft with Paul Allen. Steve Jobs was 21 when he founded Apple with Steve Wozniak. The origin stories of those companies and a handful of others helped to shape a myth that tech, and American innovation overall, is fueled by wunderkinds. But fresh-faced founders are the exception, not the rule, according to the study.

The research, by the economists Pierre Azoulay of M.I.T., Ben Jones of Northwestern, J. Daniel Kim of the University of Pennsylvania and Javier Miranda of the United States Census Bureau, provides the first systematic calculation of the ages of the founders of high-growth start-ups in the United States.

Previous studies had documented that owners of small businesses tended to be in their late 30s and 40s. But most small businesses stay fairly small: restaurants, dry cleaners, retail stores and the like. They are important but aren’t central to innovation in the economy.

The new study was able to zero in on high-flying start-ups by bringing together anonymized data collected by different agencies within the federal government. The government matched sales and employment data for start-ups collected by the Census Bureau with information on the founders extracted from Internal Revenue Service filings.

After stripping identifying information, the government provided the researchers with a data set including 2.7 million business founders. The researchers calculated that the founders’ average age was 42. And for the founders of the 0.1 percent fastest-growing firms, the average age was 45. Firms that were successful enough to have an initial public offering or be acquired by a larger company showed the same pattern: Their founders were generally middle-aged.

Steve Jobs in 1977. He was 21 when he co-founded Apple.

That isn’t to say that youth has no advantages.

Younger people often have a risk-taking mind-set and that might help them develop game-changing ideas. In addition, raw problem-solving ability — what psychologists call fluid intelligence — seems to peak early. It may already be declining by the time we’re in our 20s.

Still, the findings on age and entrepreneurship echo earlier myth-busting by researchers about scientific breakthroughs. While Albert Einstein did pathbreaking work on special relativity and the photoelectric effect at 26, such early discoveries aren’t typical. A study of Nobel laureates in physics over the 20th century found that those scientists did their prizewinning work at an average age of 37.

In applied science, crystallized intelligence, gained through experience, appears to be even more vital: Nobel-worthy breakthroughs in medicine arrived a bit later, at age 40, on average.

In short, entrepreneurial success isn’t just a function of raw intelligence and a propensity for risk-taking. It depends on a variety of ingredients, many of which appear to improve with age.

Consider Mr. Fadell’s story.

He started working in Silicon Valley in the early 1990s, designing products at General Magic and Philips Electronics. In the 2000s he moved to Apple, where he led the engineering team that created the iPod digital music player, and played a crucial role in the development of the early iPhone. In 2010, after amassing all that experience, he founded Nest with Matt Rogers, a young Apple engineer.

In an interview, Mr. Fadell recounted how, after he left Apple, he and his family traveled the world and designed an eco-friendly home for themselves in Lake Tahoe. He said he was dissatisfied with the clunky thermostats offered by his contractor or visible during his travels.

“Thermostats were ugly, outdated, and didn’t help you save money or keep you comfortable,” Mr. Fadell said. He recalls thinking: “There’s something fundamentally wrong here and there’s no product in the market to address it.” So he created a new thermostat and a new company.

Mr. Fadell said he had tried to start successful companies in college and earlier in his career but they failed because he wasn’t ready.

“There were a lot of things I needed to learn to finally be able to nail it,” he said. He learned about product design at General Magic, he said, and about managing teams and financing at Philips Electronics. At Apple, he said, Mr. Jobs showed him how to go beyond designing a product; the key, Mr. Fadell said, was to design the customer’s whole experience, from packaging to messaging.

When he needed to recruit a team for Nest, he said, he was already a Silicon Valley veteran. “I’d been in the Valley for 20 years so I had a huge network of people I’d worked with before,” he said.

His thinking, as an older man, was different, too. In his 20s, he said, he was barely aware of thermostats. “College students know what college students need,” he said. “When you get older, you start to need and understand other things.”

A lot of innovation in business benefits from experience. Youth has its triumphs, but some roads to success are lengthy. They require age and staying power.


from: https://www.nytimes.com/2019/08/29/business/tech-start-up-founders-nest.html



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