IBM Z provides a simple way to encryption and fight Cybercrime – Irish Tech News

Posted on July 26, 2017 by admin

By Oscar Michel, Masters in Journalism, DCU

IBM unveiled on IBM Z, the next generation of the worlds most powerful transaction system, capable of running more than 12 billion encrypted transactions per day.

With IBM Z it is now possible to encrypt data associated with any apps, clouds or database.

The launch of IBM Z that took place in Armonk, NY on July 17th ushers in new era of data protection. $8 trillion of the global economy will be stolen via cybercrime by 2022. Since 2013, 9 billion data records were lost or stolen. Only 4% of the data records were encrypted making the data vulnerable to theft.

The vast majority of stolen or leaked data today is in the open and easy to use because encryption has been very difficult and expensive to do at scale. We created a data protection engine for the cloud era to have a significant and immediate impact on global data security said Ross Mauri, General Manager of IBM Z.

The main issue with encryption is that it can degrade the performance and therefore the users experience and can be too complex and expensive to manage. Only 2% of corporate data is encrypted today.

IBM Z brings significant advances in cryptography technology, building on a proven encryption platform that safeguards the worlds banking, healthcare, government and retail systems. IBM Z pervasive encryption delivers breakthroughs including Pervasive encryption of data at all times, tamper-responding encryption keys and encrypted APIs.

The General Data Protection Regulation(GDPR) will require organisations to report data breaches to the regulatory authority within 72 hours and face fines of up to 4% of annual worldwide revenues or 20 million Euro, unless the organisation can demonstrate that data was encrypted and the keys were protected.

The US Federal Institutions Examination Council (FFIEC) provides guidance on the use of encryption. Singapore and Hong Kong has done the same.The New York State Department of Financial Services published requirements regarding encryption in the Cybersecurity Requirements for Financial Services Companies.

The war against cybercrime has started and encryption is the solution.

IBM Z also created the most secure Blockchain Service byrunning IBM Blockchain services to provide the highest commercially available levels of cryptographic hardware.

The powerful combination of IBM Z encryption and secure containers differentiates IBM Blockchain services on the cloud by supporting the trust models new blockchain networks require, said Marie Wieck, general manager, IBM Blockchain. Enterprise clients also benefit from the ease of use making management transparent to the application and the user.

Regarding to the Transaction System for the Cloud Era, enormous amountsof sensitive data produced by transactions can now be better protected against fraud and cybercrime, analysed, and monetised using IBM Z. Encryption will be easy, fast and wont impact to service level agreements.

IBM has also announced new Container Pricing models for IBM Z. Microservices and applications will enable clients to maximise the value from security-rich on premises entreprise systems in real time.Application development and test with the freedom to triple capacity of all development environments on z/OS to support latest DevOps tooling and processes.Payment systems pricing based on the business metric of payments volume a bank processes, not the available capacity.

If you would like to have your company featured in the Irish Tech News Business Showcase, get in contact with us at [emailprotected] or on Twitter: @SimonCocking

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IBM Z provides a simple way to encryption and fight Cybercrime - Irish Tech News

Quantum Cryptography System Breaks Daylight Distance Record – IEEE Spectrum

Posted on July 25, 2017 by admin

Satellites can now set up quantum communications links through the air during the day instead of just at night, potentially helping a nigh-unhackable space-based quantum Internet to operate 24-7, a new study from Chinese scientists finds.

Quantum cryptography exploits the quantum properties of particles such as photons to help encrypt and decrypt messages in a theoretically unhackable way. Scientists worldwide are now endeavoring to develop satellite-based quantum communications networks for a global real-time quantum Internet.

However, prior experiments with long-distance quantum communications links through the airwere mostly conducted at night because sunlight serves as a source of noise. Previously, the maximum range for day-time free-space quantum communication was 10 kilometers,says study co-senior author Qiang Zhang, a quantum physicist at the University of Science and Technology of China in Shanghai.

Now researchers led by quantum physicist Jian-Wei Pan at the University of Science and Technology of China at Hefei have successfully established 53-kilometer quantum cryptography links during the day between two ground stations. This research suggests that such links could work between a satellite and either a ground station or another satellite, they say.

To overcome interference from sunlight, the researchers switched from the roughly 700-to-900-nanometer wavelengths of light used in all prior day-time free-space experiments to roughly 1,550 nm. The sun is about one-fifth as bright at 1,550 nanometers as it is at 800 nanometers, and 1,550-nanometer light can also pass through Earth's atmosphere with virtually no interference. Moreover, this wavelength is also currently widely used in telecommunications, making it more compatible with existing networks.

Previous research was reluctant to use 1,550-nanometer light because of a lack of good commercial single-photon detectors capable of working at this wavelength. But the Shanghai group developed a compact single-photon detector for 1,550-nanometer light that could work at room temperature. Moreover, the scientists developed a receiver that needed less than one tenth of the field of view that receivers for night-time quantum communications links usually need to work. This limited the amount of noise from stray light by a factor of several hundred.

In experiments, the scientists repeatedly established quantum communications links across Qinghai Lake, the biggest lake in China, from 3:30 p.m. to 5 p.m. local time on several sunny days, achieving transmission rates of 20 to 400 bits per second. Furthermore, they could establish these links despite roughly 48 decibels of loss in their communications channel, which is more than the roughly 40 to 45 decibels of loss typically seen in communications channels between satellites and the ground and between low-Earth-orbit satellites, Zhang says. In comparison, previous day-time free-space quantum communications experiments could only accommodate roughly 20 decibels of noise.

The researchers note that their experiments were performed in good weather, and that quantum communication is currently not possible in bad weather with todays technology. Still, they note that bad weather is only a problem for ground-to-space links, and that it would not pose a problem for links between satellites.

In the future, the researchers expect to boost transmission rates and distance using better single-photon detectors, perhaps superconducting ones. They may also seek to exploit the quantum phenomenon known as entanglement to carry out more sophisticated forms of quantum cryptography, although this will require generating very bright sources of entangled photons that can operate in a narrow band of wavelengths, Zhang says.

The scientists detailed their findings online 24 July in the journal Nature Photonics.

IEEE Spectrums general technology blog, featuring news, analysis, and opinions about engineering, consumer electronics, and technology and society, from the editorial staff and freelance contributors.

Sign up for the Tech Alert newsletter and receive ground-breaking technology and science news from IEEE Spectrum every Thursday.

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Quantum Cryptography System Breaks Daylight Distance Record - IEEE Spectrum

SK Telecom Develops Quantum Cryptography Chip for IoT – SDxCentral

Posted on July 25, 2017 by admin

SK Telecom is adding a new level of security to the Internet of Things (IoT) by embedding a small quantum random number generator (QRNG) chip into its IoT devices. QRNG chips generates random numbers without any pattern, which is intended to increase the level of security.

The South Korean operator also said that its QRNG chip will be just 5 millimeters (mm) by 5 mm in size, making it small enough to embed in a variety of devices.

According to Sam Hale, analyst with MachNation, hardware-based random number generation, like the QRNG chip, has existed for some time and is already largely deployed in some business sectors. In fact, Hale said that random number generators (of which QRNG is a subset), have existed in various formats for decades and Intel currently uses this type of technology for its Intel Secure Key brand.

The benefit to IoT is that QRNG ensures common encryption methods cannot be broken due to weaknesses within their random number generators. The QRNG technology magnifies very small scale quantum uncertainties to a much larger scale.

SK Telecom has not yet determined the price of its QRNG chips, but said that it will work with partners to accelerate the popularity of QRNG and increase its presence in the market.

However, Hale said that SK may have some difficulty getting traction for its QRNG chip as both Intel and ARM, which currently produce the majority of IoT processors, already use competing technologies or have QRNG technology already embedded in them.

SK Telecom has been investing heavily in IoT. The company said earlier this year that it would invest $9 billion over the next three years in artificial intelligence (AI), IoT, autonomous vehicles, and 5G.

Sue is VP of Content and Editor-in-Chief at SDxCentral. Sue covers 5G and IoT for SDxCentral as well as overseeing all the editorial content on the site. Prior to SDxCentral, Sue was the Editor-in-Chief of FierceMarkets Telecom Group. Sue has more than 20 years of experience reporting on the telecom industry, including roles as the Executive Editor at Wireless Week and Managing Editor at Convergence magazine. She has also worked as an analyst for Paul Kagan Associates, specializing in wireless and broadband technologies. She can be reached at smarek@sdxcentral.com

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SK Telecom Develops Quantum Cryptography Chip for IoT - SDxCentral

China set to launch ‘unhackable’ messaging network using quantum cryptography – International Business Times UK

Posted on July 25, 2017 by admin

China is set to launch a new "unhackable" communications network built upon cutting-edge quantum cryptography, promising to revolutionise the process of encryption. State media said the city of Jinan will be "the first in the world" to use the secure technology in government.

Scientists claimed the network, which reportedly cost 120m yuan ($19.5m, 15m) to construct, will connect government offices in the city. Roughly 50 rounds of testing indicated it will be capable of encrypting more than 4,000 pieces of data every second, China Daily reported.

It will be used by 200 users across Jinan's government, finance and military departments, state media said. Experts from the Institute of Quantum Technology located in Jinan revealed the revolutionary network would be rolled out by August later this year.

Unlike the encryption of today, quantum-based networks send messages inserted into particles of light.

The "unhackable" claim comes from the fact that if anyone attempts to break into the network the particles will change and the message will be destroyed.

"We plan to use the network for national defence, finance and other fields, and hope to spread it out as a pilot that if successful, can be used across China and the whole world," said Zhou Fei, assistant director of Jinan Institute of Quantum Technology, as noted by the Financial Times.

It's not the first time China has invested in quantum tech. Last year it launched a "hack-proof" communications satellite, which was put on a two-year mission to help develop stronger communications at speeds "faster than light".

Many other nations have been reluctant to invest in such systems at scale, but why?

"For a long time people simply didn't think it was needed," Professor Myungshik Kim of Imperial College, London, told the BBC. "The mathematical difficulty of the current coding system was so high that it was not thought necessary to implement the new technology."

Now, it appears that China is leading the charge. "While nothing can truly be deemed as 'unhackable', new and radical approaches are very much needed to help secure technology and communications," said Javvad Malik, an expert at security firm AlienVault.

He added: "Having applications utilising technologies that make them more difficult to hack, or can detect quickly and reliably when a compromise has occurred is always a welcome addition and one would hope to see such improvements in all new technologies and national infrastructure."

Andrew Clarke, director at security firm One Identity, said that the promise of quantum technology continued to be a "bright spot on the horizon".

He elaborated: "The latest experiments in China have adopted satellite systems and increased wavelengths to establish quantum cryptography links during the day.

"The concept behind the technology is that if there is any interference in the communication such as an attacker trying to steal an encryption key then the quantum mechanics theory indicates that the key would immediately change to prevent that from being successful.

"At this stage, the experiments involve point-to-point encrypted communication, but when extended could provide a new approach to wider communications between multiple trusted parties.

"It will require much more research; experimentation and investment to extend to wider use; boost transmission rates and distance. This is certainly a step in the right direction to address global security concerns concerning public internet use."

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China set to launch 'unhackable' messaging network using quantum cryptography - International Business Times UK

A brief history of Alice & Bob, cryptography’s first couple – Boing Boing

Posted on July 25, 2017 by admin

Alice and Bob are the hypothetical communicants in every cryptographic example or explainer, two people trying to talk with one another without being thwarted or overheard by Eve, Mallory and their legion of nefarious friends.

Alice and Bob's first known appearance was in Rivest, Shamir, and Adleman's 1978 Communications in the ACM paper, A Method for Obtaining Digital Signatures and Public-key Cryptosystems." Since then, they have enjoyed many adventures.

The potted history of Alice and Bob at Cryptocouple is a delightful way to explore the history of crypto and the way we think about secrecy and privacy.

Alice and Bob are the worlds most famous cryptographic couple. Since their invention in 1978, they have at once been called inseparable, and have been the subject of numerous divorces, travels, and torments. In the ensuing years, other characters have joined their cryptographic family. Theres Eve, the passive and submissive eavesdropper, Mallory the malicious attacker, and Trent, trusted by all, just to name a few.

While Alice, Bob, and their extended family were originally used to explain how public key cryptography works, they have since become widely used across other science and engineering domains. Their influence continues to grow outside of academia as well: Alice and Bob are now a part of geek lore, and subject to narratives and visual depictions that combine pedagogy with in-jokes, often reflecting of the sexist and heteronormative environments in which they were born and continue to be used. More than just the worlds most famous cryptographic couple, Alice and Bob have become an archetype of digital exchange, and a lens through which to view broader digital culture.

Alice & Bob A History of The Worlds Most Famous Cryptographic Couple [Cryptocouple]

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The 5 Craziest Moments in Showtime’s Julian Assange Documentary, ‘Risk’ – Decider

Posted on July 25, 2017 by admin

Though the Wikileaks founder is likely best known for his ties to Chelsea Manning, Edward Snowden, and the Hillary Clinton email dump last fall, much of the documentary actually revolves around Assanges response to the sexual assault allegations that have been levied against him. Assange visited Sweden in 2010, and soon afterwards he was accused of two counts of sexual molestation, one count of unlawful coercion and one count of lesser-degree rape. In May of this year, the charges were dropped against Assange with authorities claiming they could not expect the Ecuadorian embassy to communicate reliably with Assange.

Since Risk was filmed over the course of six years, the sexual assault case is referenced fairly consistently. At one point, to the chagrin of his lawyer, Assange claims the whole case is actually a feminist-led conspiracy designed to discredit him. He also makes the comment that the case is difficult because, since there are two women, its harder to discredit them. Its truly a bizarre moment that helps to paint Wikileaks organization of hackers as a sexist organization.

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The 5 Craziest Moments in Showtime's Julian Assange Documentary, 'Risk' - Decider

HRM: Julian Assange notices something interesting about Kurt Eichenwald’s Twitter bio – Twitchy

Posted on July 25, 2017 by admin

Hrm. Interesting indeed.

It would appear that Kurt Eichenwald has removed the word Newsweek from his Twitter bio.

Assange went on:

Could this be why?

From Paste:

The lawsuit was settled amicably and to my satisfaction, Moran toldPaste. After the settlement, the stories were removed, the parties agreed not to speak about the terms of the settlement, so I cant talk to you about what the settlement entails.

When asked how it felt to finally be done with the whole affair, Moran would only say he was relieved.

Our institutions actually do work, he said, a pensive look creeping over his face. I was a young journalist with no power, but the facts were on my side, and the system worked. Our institutions are made to last.

Newsweeks policy apparently kept them from commenting on this particular story.

Wonder what brought all of this on in the first place with Assange:

Oh dude.

Yeah, this will end well. *popcorn*

At least its not tentacle porn this time, Kurt.

Identity politics FAIL: Lefties attack 3 black women for being successful business owners

7 Cryptocurrency Predictions From the Experts – Fortune

Posted on July 25, 2017 by admin

Fortune convened some top cryptocurrency entrepreneurs, venture capitalists, bankers, and others to chat about the future of digital money at Fortunes Brainstorm Tech conference in Aspen, Colo. last week. A select group met at the Aspen Institute for a breakfast roundtable discussion on Wednesday morning.

Headliners on the panel included Balaji Srinivasan , CEO and cofounder of 21.co, a cryptocurrency startup that has raised more in traditional VC funding than almost other one. Another was Peter Smith, CEO and cofounder of Blockchain, a U.K.-based cryptocurrency wallet company that recently raised $40 million from GV , the venture capital arm of Alphabet , parent company of Google ( goog ) . And Kathleen Breitman, CEO and cofounder of Tezos, a blockchain startup that this year raised more than $200 million in an initial coin offering, or ICO, and which counts celeb investor Tim Draper among its backers.

The crew of experts weighed in on everything from the longevity of Bitcoin, the original cryptocurrency and blockchain, or cryptographically secured public ledger, to the latest trend of hosting so-called token sales to fund projects, especially on Ethereum , a rival blockchain to Bitcoins, to the future of a decentralized web. Here are some of the predictions we heard.

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Most people who are enthusiastic about cryptocurrency appear to agree that Bitcoin and its newer rival Ethereum have staying power, though they may be more bullish on one versus the other. "In terms of 5 to 10 years, Bitcoin and Ether will be around I bet," Balaji Srinivasan told the room of more than 70 people.

Peter Smith said his company, Blockchain, which was early to Bitcoin, has only just started to warm up to newcomer Ethereum. In contrast, Mike Cagney, CEO and cofounder of SoFi, a personal finance company, said during a separate session on the main stage that he was hotter on the latter technology .

Bitcoin "has some purpose but its application for commercial transaction is limited right now," Cagney said. "The blockchain and Ethereum, on the other hand, have absolutely fascinating infrastructure applications, he continued, mentioning the possibility to overhaul title insurance, which involves policies related to real estate, as one example.

Bitcoin and Ethereum may have stolen the show at this point, but the innovation wont end there. Expect more winners on the horizon.

Kathleen Breitman is hopeful that Tezos, her own blockchain bet, will fill a niche that solves problems with extant blockchains. In particular, she and her projects developers are designing Tezos to automatically push software updates out to the network, thus, in theory, avoiding the divisive feuding over upgrades that has wracked systems like Bitcoin over the past few years.

No one can say how many tokens and coins and blockchain protocols will eventually win out, but the experts seem to think theres room for a multitude. "Its likely that another one or two dominant ones we havent seen yet in the market," Smith projected. "Another really dominant coin could come out this year or next year.

For the time being, token sales might seem like a fantastic way to raise a lot of money quickly and with few questions asked. Will this lead to riches for some? Undoubtedlyindeed, it already has. And rip-offs for others? Almost certainly.

Smith said he presumes that market manipulation and insider dealing is rampant among purveyors of initial coin offerings. Were cautious about it in the short term, Smith said of his company. But you have to temper that with the idea that every new technology is going to be like that in the beginning.

Brad Garlinghouse, CEO of Ripple and a former executive at Yahoo , voiced his less forgiving concerns about the sector on a separate panel. Heavily regulated markets are typically heavily regulated for a reason, he said. Frauds are happening, people are going to jail.

The days of making a pilgrimage to the homes of the holders of purse strings are coming to an end. In a world where anyone can participate as an investor online, physical location matters much less.

It used to be you had to come to Silicon Valley, walk up Sand Hill Road, network with individuals, Srinivasan said about entrepreneurs seeking funding, often strolling up a strip to the west of Palo Alto that long has been associated with venture capital firms. ICOs change all that.

Projects are already getting funded this Kickstarter-like new way. Breitman said she that when she set up Tezos token sale, she aimed to get as many people who wanted to participate in the ecosystem to contribute. The company raised more than $200 million to date and, according to her, more than 30,000 Tezos wallets have been opened.

Elena Kvochko, chief information officer of the security division at Barclays, said that her bank has had talks with regulators about Bitcoin, blockchains, and their ilk. The rule-sticklers appear to be open to the idea as long as know your customer laws are obeyed, although its still early days.

Meanwhile, as governments settle on sets of rules of the road, countries like Switzerland, Singapore, and Estonia are jostling to develop frameworks that easily accommodate the new technology, Srinivasan said. Theyre seeking to displace geographic incumbents and become hubs for a new wave of business financing. If youre a U.S. person or business, you have a good deal to be concerned about, Smith said.

Breitman added that until the rules are agreed upon, its best to be transparent about what one is doing.

As cryptocurrency prices fluctuate wildly, speculators have been having a field day. However, theres reason to believe the markets will become more stable, as Bitcoin gradually has over the past couple of years (despite its still big price swings), Smith said.

In order for these computer coins to catch on big-time, they need a use-case that beats traditional money. Ideally, this ought to be better than merely buying drugs, as Jeff John Roberts, Fortune reporter and the sessions moderator, noted.

Srinivasan proposed one possible scenario. Imagine that all your waking hours are spent in the Matrix, he said, referring to a virtual reality in which everyone is enmeshed in the future. As people from all over the world meet and interact, they will need a medium of exchange. To transact, you cant just hand over a dollar bill, Srinivasan said. You need an international currency for that.

It might take a while but theres going to be more of a need to transact across borders than there is today, he said.

Whenever a consumer swipes or dips a credit card, payment processors charge a fee.

Nicko van Someren, chief technology officer of the Linux Foundation, pointed out that the fee companies like Visa or Mastercard charge exceeds the cost to clear or settle transactions. These businesses can potentially process transactions quicker and cheaper, he contended.

One potential outcome of the adoption of alternate systems, like Bitcoin, is to provide companies with the impetus to improve their services. Bitcoin is good because it will make banks move toward the real cost of handling these transactions, van Someren said. (By extension, in Ethereum's case, one could imagine upstart companies built on it forcing giants like Amazon , Facebook , or Dropbox to reconsider or improve their respective offerings.)

Smith, meanwhile, was less optimistic about incumbents ability to adapt to such change. I dont think be lot of room for banks to simply adjust their price models, he said.

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7 Cryptocurrency Predictions From the Experts - Fortune

Bitcoin LIVE news: Cryptocurrency soars after fears of crash wobble … – Express.co.uk

Posted on July 25, 2017 by admin

GETTY

8pm: Universities join mass bitcoin giveaway

Fintech universities in 11 regions have agreed to participate in the upcoming Bitcoin Airdrop, organised by the Blockchain Education Network and bitJob.

The first giveaway event will take place on August 11 in Colombia, before moving to St Petersburg in Russia.

Several high schools will also be giving away bitcoin during the event, giving young adults the opportunity to learn about the cryptocurrency.

Dror Medalion, co-founder and CEO of bitJob, said that it is an honour to organise this years event.

bitJob shares a similar mandate with BEN to empower students and give them the necessary tools to compete in todays marketplace, he said in Bitcoin Magazine.

This years event is shaping up to be the largest ever as the popularity of Bitcoin and [b]lockchain [technology] continues to rise globally.

1.20pm: Bitcoin needs a few more 'swings' before trend continues

According to Sheba Jafari, head of technical strategy at Goldman Sachs, bitcoin will "need a few more swings" before the witnessed trend continues.

"Anything above 3,000 (Jun. 13th high) will suggest potential to have already started wave V, which again has a minimum target at 2,988 and scope to reach 3,691 (the latter being a preferred target as this assumes a new high)," Ms Jafari wrote in a note to clients.

11am: Bitcoin bounces back from price crash

Bitcoin has recovered from its recent crash, with the price of the cryptocurrency reaching $2,790 at 2.00am BST this morning before falling slightly to $2,691 as of 11.30am BST.

This is close to the high of $2,855 that was recorded on Sunday.

The price has stabilised after Bitcoin miners activated BIP91 a software update aimed at solving Bitcoins scalability problem.

On Saturday, BIP91 was activated after 93 per cent of miners signalled their support well above the 80 per cent threshold that was needed.

The Bitcoin market crashed between July 12 and July 16 amid fears that the update would not be accepted, which would have triggered a user-activated soft fork splitting the cryptocurrency into two assets.

Bitcoin's volatility is very high compared to the euro, the yen or even gold

Francisco Blanch, America Merrill Lynch

Andrew Lee, head of bitcoin-shopping startup purse.io, said: Were thrilled to get past this impasse.

In further good news, Bank of America Merrill Lynch has predicted that Bitcoin will go mainstream once banks start accepting it.

A crucial hurdle for the cryptocurrency will be whether institutions accept it as collateral, the banks commodity and derivatives strategist Francisco Blanch wrote in a report.

"But we are not aware of any major institution that takes cryptocurrency as collateral at the moment, he added.

Blanch detailed how currency has developed through the ages from salt and other commodities, to gold and finally to modern money.

He noted that in the last year, volatility in Bitcoin markets fell below levels witnessed in silver markets.

COIN.DESK

"Bitcoin's volatility is very high compared to the euro, the yen or even gold," he wrote, according to CNBC.

"But it fell twice last year below the volatility of silver, the world's currency for 400 years."

Bitcoins value has more than doubled since the start of the year and has soared almost 740 per cent in the past two years, according The Motley Fool.

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Bitcoin LIVE news: Cryptocurrency soars after fears of crash wobble ... - Express.co.uk

Start Your Hedging: LedgerX to Begin Trading Cryptocurrency … – CoinDesk

Posted on July 25, 2017 by admin

For the first time ever, the U.S. Commodity Futures Trading Commission (CFTC) has given permission to a private company to exchange and clear any number of cryptocurrency derivatives.

After three years of work, New York-based startup LedgerX was today granted a rare derivatives clearing organization (DCO) license allowing it to clear and custody financial instruments backed by bitcoin, ether and any number of blockchain-based cryptocurrencies.

The instruments, designed to mitigate investment risk, are the latest signal that the cryptocurrency markets are maturing, with the total value of the asset class crossing $115bn earlier this year.

But the guidance from the agency in charge of ensuring the integrity of all futures and swaps markets in the US could have bigger implications than just letting a single company finally open for business.

LedgerX co-founder and CEO Paul Chou told CoinDesk:

"It means a lot, not just for the industry, but globally, because the CFTC will set the example of what a well-licensed clearinghouse and exchange based around digital currencies will look like."

As part of the DCO license, LedgerX will be required to surveil the institutional investors it works with and create increased transparency about those customers for the regulatory agency. Eligible participants include broker dealers, banks, futures commission merchants, qualified commodity pools and qualified high net worth investors.

With the granting of this license, these groups will now be able to enter into complex contracts with one another, with values derived from the underlying cryptographic asset.

As a result, Chou believes the creation of these assets will mark a pivotal moment for cryptocurrency markets, giving investors more sophisticated ways to hedge, and possibly, helping to stabilize long-volatile cryptocurrency prices.

"We have a lot of in-progress talks with customers that are looking to work with retail customers that want to buy derivatives on bitcoin, binaries, all these exotic options," he said.

Though frequently described as a bitcoin exchange and clearinghouse, LedgerX's license did not require an overly broad definition of cryptocurrency. Rather, the permission is open to any of a series of instruments derived from the cryptographic primitives used to build a number of protocols.

Similar to how G5 currencies are typically viewed as safe investments due to their relative stability, Chou imagines three to five cryptocurrencies will be deemed "viable" candidates for the exchange and clearinghouse, based on market capitalization and functionality.

Initial coin offering (ICO) tokens sold to raise funds will not likely be considered for inclusion on LedgerX, given their gray area between CFTC-regulated commodities and SEC regulated securities.

Rather than of having to reapply for each currency and each derivative contract LedgerX will "self-certify" that the new opportunity is compliant.

"Instead of evaluating different governments," as with the case of a G5 currency, said Chou. "Youll be evaluating different technologies or approaches underneath these digital currencies."

The CFTC decision comes at a time when many in the cryptocurrency industry have been anxiously awaiting clear guidance including other regulators.

In March, another lengthy cryptocurrency regulatory application was refused by the Securities and Exchange Commission (SEC), citing among other things, a lack of "surveillance-sharing agreements," and a requirement that "markets must be regulated."

Currently under review by the SEC, the application would let Tyler and Cameron Winklevoss list a bitcoin-tied exchange-traded fund (ETF) on the BATS BTX Excahnge.

Given LedgerX's lengthy requirements to report on its customers and the regulatory body's history of co-regulating certain instruments, Chou believes today's decision could provide just the answer the SEC, and other agencies in Asia and Europe have been waiting for.

"I think the CFTC will set an example both for other regulators here in the U.S., but also globally as well," he said.

After years of working and waiting, progress had been moving swiftly leading up to today's news.

It was just earlier this month that the CFTC formally registered LedgerX as a swap execution facility (SEF) after operating with a temporary license for about two years, making the New York-based firm only the second cryptocurrency outfit to be regulated under the provision.

A close observer of the developing story might have even found a clue to the story back in May, when LedgerX announced it had raised an $11.4 million Series B led by Miami International Holdings and Huiyin Blockchain Venture Investments.

It turns out, the money for the startup that had already raised a $1.5 million seed round and an undisclosed Series A was intended to meet capital requirements implemented by the Dodd-Frank Act. In order to ensure agreements can be fulfilled in case of an emergency, the act requires that a DCO hold operating costs to run its business for a year.

Going as far back as September 2015, former CFTC commissioner Mark Wetjen has been sitting on the board of LedgerX parent company Ledger Holdings, and since January 2016, Chou has served on the CFTC technology advisory committee.

In a statement, Wetjen said:

"These are exciting times to have a new digital asset class emerge. I hope that the effort LedgerX put forward in the U.S. can set the stage for a global approach to this new digital asset class."

By moving the trading and settling of cryptocurrency assets into one, heavily observed operation, Chou expects he'll be able to generate revenue from an entirely new source: data analytics to an unprecedented depth.

In addition to charging other exchanges for his service, Chou expects the CFTC's heavy surveillance requirements will result in cryptocurrency markets data that can be cross-referenced with points from previously existing data sets.

When the platform formally launches later this year, these services and more will only be available to eligible contract participants. But, Chou described his business model as "multi-stage," eventually serving those who were previously unable to afford such services.

"At first we're going to target a lot of institutional customers that want to invest in this asset class," said Chou, who added:

"Then later, pretty much everybody."

Flames on hot rod via Michael del Castillo

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