Category Archives: Cryptocurrency

Estonia wants to issue its own virtual currency with the help of Ethereum founder Vitalik Buterin.

The cryptocurrency, called "estcoin," could be launched via the digital coin community's version of crowdfunding an initial coin offering (ICO).

ICOs enable start-ups to raise funds by selling off cryptocoins, such as bitcoin and ether, in return for cash. They are similar to initial public offerings (IPOs), but differ in that they deal with supporters of a project, making the investment more personal.

The small eastern European country is no stranger to digital innovation. It was the first country to offer citizens of the world "e-residency," a digital ID for non-Estonians that offers access to services like banking, payment processing and taxation.

Kaspar Korjus, managing director at e-Residency, Enterprise Estonia, said that the initiative was about creating a "borderless digital nation".

"A government-supported ICO would give more people a bigger stake in the future of our country and provide not just investment, but also more expertise and ideas to help us grow exponentially," Korjus said in a blog post on Monday.

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Estonia wants to launch its own government-backed cryptocurrency called 'estcoin' - CNBC

Via CoinMarketCap

The combined value of all publicly traded cryptocurrencies has set a new record, surpassing $150 billion for the first time today.

At press time, the value of ether, bitcoin and more than 800 other blockchain-based assets had reached a high of around $154 billion, according to CoinMarketCap.

Overall, the figure indicates that the cryptocurrency market continues to grow at a steady pace. At $154 billion, the market is up 13 percent over the last seven days, 67 percentover the last month and an astounding 1,240 percent year-over-year.

What might be most notable, however, is that the new high came during a trading session in which there were no individual all-time highs for major cryptocurrencies.

At $4,275 and $324, bitcoin and ether were edging up at press time,though still short of their highs above $4,500 and $400, respectively. Further, the new combined recordcame in spite of the fact there were no big gains in litecoin, monero or dash, some of the more popular alternative cryptocurrencies among traders.

The lone breakout, in fact, was Ripple's XRP token a cryptographic asset issued by a San Francisco startup seeking to build enterprise blockchain solutions. On the day's trading, XRP was up more than 50% to $0.28, a movement that built on impressive gains yesterday as well.

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

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$150 Billion: Total Cryptocurrency Market Cap Hits New All-Time High - CoinDesk

A senior official forSouth Africa's central bank has saidit's "too risky" for the institution to launch its own cryptocurrency.

Speaking during theStrate GIBS FinTech Innovation Conference 2017 on Monday, the deputy governor of the South African Reserve Bank, Francois Groepe, commented on developments in the fintech space, taking a particular focuson blockchain and distributed ledgers.

According to regional news sourceITWeb, Groepe suggested that the central bank has an open mind on the question of issuing its own digital currency. That said, he struck a cautious note about the short-term prospects of doing so.

"Virtual currencies have the potential of becoming widely adopted," he told attendees, going on to say:

"However, for the central bank to issue virtual currencies or cryptocurrencies in an open system will be too risky for us. This is something we really need to think about."

Groepe's comments come almost a year to the day after the South African Reserve Bank indicated that it would adopt an open perspective on the tech even leaving the door open to applications of its own.

"We are willing to consider the merits and risks of blockchain technology and other distributed ledgers," the bank's governor, Lesetja Kganyago, said at the time.

Other major financial players in the country, including its central securities depository, have also moved to investigate possible uses of blockchain.

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South Africa's Central Bank: It's 'Too Risky' to Launch a Cryptocurrency - CoinDesk

Mark Cuban wants in on the cryptocurrency boom even if it turns out hes right that bitcoin is in a bubble.

Cuban is investing in 1confirmation, a fund that plans to raise $20 million to invest in blockchain-based companies, the tech billionaire said in an interview. Venture capital firm Runa Capital is among other investors, and its technical advisors include Andreessen Horowitz board partner Balaji S. Srinivasan and programming language JavaScript founder Brendan Eich.

I have always looked at blockchain as a foundation platform from which great applications can be built, Cuban said in an Aug. 19 email response to questions. Hopefully we can find a few.

Runa Capital principal Nick Tomaino was an early employee at digital currency exchange Coinbase Inc. and runs the cryptocurrency-focused blog The Control. They plan to differentiate 1confirmation from the slew of digital currency hedge funds that have sprung up recently by taking a page from the venture-capital play book.

Rather than investing in digital tokens through initial coin offerings or in the secondary market,1confirmation plans to invest from $100,000 to $500,000 in early stage companies before their ICO, and help those companies develop their product. Once the startup is ready to issue an ICO, the fund hopes to negotiate a discounted price.

Its a more cautious approach to the frenzy that has consumed the space this year, with startups raising hundreds of millions of dollars in days, or even minutes, with little real business applications besides a white paper and a website. Startups had raised $1.8 billion in ICOs as of last week, according to Coindesk.

The fund will focus investments in projects that help developers build decentralized applications, rather than those aimed at end users, on the belief that the sector isnt mature enough for blockchain applications to be adopted on a mass scale.

A number of funds focused on blockchain companies and their tokens have opened in the past year as bitcoins price more than tripled and cryptocurrencies market capitalization surpassed $100 billion. Polychain Capital, founded by another Coinbase alum, Blockchain Capital and Pantera Capital are some examples.

Cuban, who is a majority owner of the Dallas Mavericks basketball team and star of startup investing theme show Shark Tank, tweeted in June that bitcoin was in a bubble, causing the cryptocurrency to drop in price. Cuban says thats beside the point given the developing underlying technology.

1Confirmation would be Cubans second foray into cryptocurrencies as he also plans to invest in tokens sold by his portfolio company Unikrn. Cuban says he plans to invest on a third crypto-related project in the future, as well as potentially buying crypto currencies, which he doesnt currently own.

Its hard to establish any intrinsic value for bitcoin or any of the the cryptocurrencies. Ifeveryone continues to tell their grandparents, cousins and co-workers to buy,the price can go a lot higher as there is a definable, finite amount, but if the number of buyers dry up or there are a few massive sellers we could see under $1,000 again, Cuban said. None of this has anything to do with the applications that can be built with blockchain. The question is whether great companies can be financed and built and I think the answer is yes.

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Bitcoin Skeptic Mark Cuban to Invest in Cryptocurrency ...

Onetime bitcoin skeptic Mark Cuban is warming to the digital currency world.

The billionaire is backing a new venture capital fund for cryptocurrency-related investments called 1confirmation. Founded by Nick Tomaino, former business development manager at Coinbase, the fund plans to raise $20 million, according to a Monday filing with the Securities and Exchange Commission.

"It's an interesting space that I [want] to get involved with and learn more" about, Cuban said in an email to CNBC Tuesday. He did not specify the size of his investment.

Cuban's opinion on digital currencies has changed fairly recently. In an Aug. 14 tweet, the Dallas Mavericks owner admitted he "might have to finally buy some" bitcoin, contrasting with a June tweet that said he thought bitcoin was in a "bubble."

"Bias should be up because of finite supply. Until crypto or US politics intrude, and they will," he added in another tweet on Aug. 14.

In late June, Cuban said he planned to participate in an initial coin offering by Unikrn, an online esports betting site in which he holds a stake.

Earlier that month, Cuban tweeted that he didn't know when or by how much the price of bitcoin, which has soared in value this year, would correct. He did acknowledge then that the blockchain technology backing bitcoin had value and that it "will be at the core of most transactions in the future. Healthcare, finance etc all will use it."

IBM announced Tuesday that it will work with major food companies such as Wal-Mart, Unilever, Tyson Foods, Dole and Kroger to "identify new areas where the global supply chain can benefit from blockchain."

However, bitcoin's surge and a rush of funds into initial coin offerings have attracted more investment attention.

Bitcoin has quadrupled in value this year and hit a record last Thursday of $4,522.13 with a market capitalization of about $74 billion, according to CoinDesk. Initial coin offerings, which are fundraising events used by cryptocurrency-related start-ups, have raised $1.37 billion so far this year, CoinDesk data showed.

Source: CoinDesk

The launch of the 1confirmation fund comes amid increased fundraising for cryptocurrency-related businesses.

On Aug. 10, digital currency storage and exchange company Coinbase announced it raised $100 million in private equity funding led by Dropbox investor IVP. That marks the largest single traditional funding round for a public blockchain or cryptocurrency start-up, according to CoinDesk.

Other participants in 1confirmation include Brendan Eich, creator of the JavaScript computer programming language; Balaji Srinivasan, board partner at technology venture capital firm Andreessen Horowitz, and David Vorick, who is building a blockchain-based cloud storage system called Sia. The fund's founder, Tomaino, is also a principal at venture fund Runa Capital.

Disclosure: CNBC owns the exclusive off-network cable rights to "Shark Tank," which features Mark Cuban as a panelist.

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Mark Cuban backs new $20 million cryptocurrency venture fund - CNBC

Computer hardware maker Asus hasrevealed a new motherboard with features geared specifically toward cryptocurrency miners.

Dubbed the B250 Mining Expert, the board was debuted over the weekend by Asus'Republic of Gamers, the Taiwan-based manufacturer's high-end gaming brand.

And while the product'srelease date and price aren't known yet, it nonetheless represents the latest signal that the mainstream hardware industry is expanding its cryptocurrency footprint.Further, theannouncement comes months after Asusbegan rolling outGPUsdesigned specifically with crypto-miners in mind aimed to take full advantage of the digital "gold rush" now taking place.

The B250 Mining Expert motherboard itself boasts a total of 19 PCI-Express expansion slots, compared to the 12, eight or six slots featured oncompetitors' products.

The idea is that cryptocurrency miners who use computing power (and lots of electricity) toadd new transactions to a blockchain, receivingnewly minted coins as a reward want to run as a many graphics cards as possible. The forthcoming board, according to the specs that are circulating, has roughly the capacity of two to three regular-sized motherboards.

The 19 expansion slots are split into threegroups, each containing 24 dedicated pins. This allows the mining rig to be connected to three power supply units at once, stabilizing the rig for multi-GPU usage. The board also boasts a variety of features likely toappeal to miners, such as live visual statistics.

As previously reported by CoinDesk, other major GPU makers like Nvidia and AMD have moved in recent months to capitalize on the spike indemand for products that can be used for mining.

Earlier this month,Nvidia CEO Jen-Hsun Huang issued bullish statements on the prospects for his firm's entry into the mining space, suggesting that it could be a long-term revenue driver.

"Cryptocurrency and blockchain are here to stay," he said.

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Asus Debuts Specialized Motherboard for Cryptocurrency Miners - CoinDesk

The digital financial services developer Enigma prides itself on ultra-secure products . The company's Catalyst platform protects financial info with a cutting-edge combination of blockchain-inspired privacy technology and cryptography. So it comes as no small surprise that on Monday, scammers took over the company's website, mailing lists, and Slack accounts by exploiting some extremely basic security mistakes Enigma had made. The blunders also facilitated a scam that ultimately cost Enigma supporters almost $500,000.

Enigma has planned an Initial Coin Offering for September 11an unregulated cryptocurrency fund-raising campaign that startups use when they want to raise capital for their company without going through the process of working with an established financial institution or venture capital fund. (The SEC has promised to clamp down on these ICOs , but so far is in the exploratory phase.)

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With the ICO in mind, scammers compromised official Enigma channels to create a sense of legitimacy and urgency. The plot proved easy to pull off. At least one of the passwords protecting the Enigma accounts, which included a Slack account with administrative privileges, had previously leaked, and reports indicate that the accounts weren't protected by two-factor authentication.

The hackers began defacing the company's main site and Slack accounts, and pushed a special "pre-sale" ahead of the ICO, directing money toward their own cryptocurrency wallet. They also went rogue on the company's mailing lists. Many users realized that the push was a scam, but the hustle did tempt some interested backers into sending 1,492 coins in the cryptocurrency Ethereum, which converts to almost $495,000.

Enigma said in a statement on Monday that its community fund-raiser, also called a crowd sale, was always set definitively for September 11, and emphasized that its secure servers had not been hacked. But a spokesperson confirmed that the scammers compromised account passwords using various methods. And in response to the incident, the company says it is adding strong, random passwords and two-factor authentication for each account, plus implementing robust password changing and better system compartmentalization. "Weve moved up a number of critical security steps and taken additional measures to protect the community going forward," says Tor Bair, Enigma's head of marketing and growth. "Were now very well aware of the potential threats and are taking no chances."

Though honest mistakes can happen at any growing organization, the Enigma community grappled with the implications of the incident on Monday, wondering how a specialized cryptography company could only now be realizing the need for stringent account hygiene. "This will go down in crypto history as one of the stupidest moments ever. We need a meme," one Reddit user wrote. Some Redditors even claimed that they used the breached credential repository Have I Been Pwned to determine that the Enigma accounts scammers accessed reused a previously exposed account password from CEO Guy Zyskind. But Zyskind told WIRED that none of the breached Enigma accounts relied on reused passwords.

While the Enigma team worked to restore secure Slack service, the community's discussion moved to secure messaging app Telegram. "No word on honoring those who were scammed b/c of y'all negligence and poor security? Speaks volumes," a user called Jay wrote in the open chatroom. Many users indicated support for Enigma, though, and seemed satisfied with the company's remediation efforts.

"Hacking accounts that do not have dual-factor authentication enabled and other best in class security measures is a trivial hack for most dedicated attackers," says Chris Pierson, the general counsel and chief security officer of the payment platform Viewpost. "To the public it looks as if the company has been hacked, and provides a significant amount of negative press about the companys security and privacy responsibilities."

Enigma said on Monday evening that it is working to mitigate the damage. We're actively investigating the scam attempt and the parties involved with multiple partners, including vigilant members of our community, other companies in our space, and exchanges, Bair says.

Since they are unregulated by the governmentfor now, anywayICOs have perks that make them appealing to cryptocurrency companies, but by their nature they are also less predictable than standard fund-raising avenues. In mid July, scammers stole roughly $7 million from supporters during the ICO of the cryptocurrency management platform CoinDash. A few days later, hackers stole $32 million in Ethereum (though much of it was later recovered) by exploiting a vulnerability in a crypto product called Parity Wallet.

"The news of the attack is certainly not surprising," says Eric Klonowski, a senior advanced threat research analyst at the internet security firm Webroot. "Investors were ready to part with their money at a moments notice, and the attacker was prepared to capitalize.... That said, recent core cryptocurrency heists are all a result of third-party vulnerabilities and their handling of investments, and not in the cryptography or implementation itself."

With the September 11 ICO still rapidly approaching, at least Enigma has some time to get its first-line security right.

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A Very Dumb Mistake Costs Cryptocurrency Investors Big Time - WIRED

Estonia is considering taking advantage of the cryptocurrency hype to do an initial coin offering (ICO) for its own country.

Kaspar Korjus, a representative for the Baltic country, wrote that if investors showed enough interest, Estonia would issue its own cryptocurrency to raise funds.

Estoniaalready has an e-residency program where anyone in the world can become a digital resident of the country, allowing them to open a business there. It sees issuing a coin as the next step in advancing its economy and expanding its global presence.

Major investors have taken notice, too. Sequoia Capital and Andreessen Horowitz, major Silicon Valley venture capital firms, invested in Filecoins record breaking ICO earlier in the month.

Its unclear how an "estcoin" would differ from other cryptocurrencies that already exist, though.

By using our APIs, companies and even other countries could accept these same tokens as payment, Korjus wrote. It will also be possible to build more functions on top of the estcoins and use them for more purposes, such as smart contracts and notary services.

Ethereum, the second largest cryptocurrency, is already capable of handling smart contracts and powering notary services. Rootstock allows Bitcoin, the largest cryptocurrency, to do the same things.

A hypothetical estcoins fate being tied to a country, would also undermine its appeal to many in its community who are drawn to cryptocurrencies because there usually is no central authority to trust.

Bitcoin, for example, is decentralized and not reliant on any single hub of activity. Its not based on any single set of servers nor does it require trust in any country or institution, like "estcoin" likely would.

Korjus did not immediately respond to request for comment on this, however, Ethereums developer, Vitalik Buterin, consulted the country on the proposed coin and spoke favorably of it.

An ICO within the e-Residency ecosystem would create a strong incentive alignment between e-residents and this fund, and beyond the economic aspect makes the e-residents feel like more of a community since there are more things they can do together, says Buterin.

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Estonia wants to launch its own cryptocurrency - The Hill

The central bank of the Philippines has granted licenses to two local bitcoin exchanges, according to reports.

Daily newspaper The Philippine Starreportedthe developments on Sunday, citing statements from central bank chief Nestor Espenilla Jr.

The Bangko Sentral ng Pilipinas firstreleased its rules for domestic exchanges in February, seeking to lay down a foundation for the country's nascent cryptocurrency space. Yet the central bank has seen relatively little interest from prospective applicants, according to one official who commented to local media in late July.

That said, Espenilla, who spoke during a financial technology event over theweekend, indicated that the central bank is being proactive about bringing exchanges under its regulatory auspices.

"We see a rapid increase in the trajectory. It is coming from a small base but increasing that is why we decided to require them to register," he told attendees.

Espenilla also offered some figures on the local bitcoin trade, according to the news source, saying that exchanges are seeing as much as $6 million in volume a month a figure that represents three times the $2 million per month seen last year.

"We are moving to regulate them," Espenilla emphasized.

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Philippines Central Bank Grants First Cryptocurrency Exchange Licenses - CoinDesk

Eugne Etsebeth is an ex-central bankerwho was employed as a technologist at the South African Reserve Bank from 2013 to 2017. During his time at the reserve bank, he notablychaired the virtual currency and distributed ledger working group.

In this opinion piece, Etsebeth outlines why he believes central banks won't be able to adapt to innovations in cryptocurrency, arguing they simply aren't set up to compete with sea changes in technology.

It's a familiar trend, one that happened in communications (internet), and that is now playing out in energy (solar), manufacturing (3D printing)and finance (cryptocurrency) power and control are moving into the hands of the individual and away from nation states.

This has huge implications for central banks, which today enable nation states to maintain their monopolies over the issuance of notes, coins and sovereign bonds. While communications and manufacturing are not their focus, cryptocurrencies and initial coin offerings (ICOs) fall predominantly in the realm of central banks.

In these systems,central banks don't issue legal tender. Rather, miners and algorithms now control the issuance of tokens effectively, the money supply. Whereas previously banks were licensed to store, send and spend currency, now wallet providers and exchanges allow the same features.

The currency renaissance has arrived and central banks are studying cryptocurrencies, though some central banks are more open to change than others.

Singapore has been investigating the notion of using distributed ledger technologies to settle cross-border transactions in real time, and the Bank of England has experimented with Ripple. Central banks are even looking to build their own versions of central bank-issued digital currency (CBDC).

Even still, central banks are not well equipped to deal with the cryptocurrency renaissance.

In fact, there are10 good reasons why most central banks will find cryptocurrencies insurmountable. Sure, a small number of forward-thinking (and acting) central banks willmaintain monetary competiveness with the burgeoning cryptocurrencies and ICOs that have reared their decentralized heads.

Still, most will succumb to a mix of the following issues:

Central banks will need to attract and retain fresh talent that will enable them to deal with the new openness and transparency demands, as well as digital transformation and the increasingly complex global world.

Decision-making in central banks is like wading through treacle decisions take months because of numerouslayers of hierarchy.

Working groups need to compile voluminous and detailed documents that need to be reviewed and signed by all parties before they can proceed to the heads of departments or the deputy governors.

Academics, economists and big-picture thinkers excel in central banks. The academics ponder on conceptual issues andthe economists make interpretations from data, whereas the policy makers and regulators mull over the cause and effect of promulgating laws.

However,technologists are generally not part of the discussion when it comes to policy and economic decisions for currency.

Although some central banks are engaging in experimentation, there is a fear of going from proof-of-concept to pilot phase.

This is natural, should a central bank make an error, it may turn out to be a reputation buster and reputation is the cornerstone of central banks. There is also some trepidation that the early regulation of cryptocurrencies, and associated new technologies, may legitimize their adoption.

Central banks are similar to conglomerates in that they have a number of different and distinct departments that require diverse skills and outputs.

These differences make it difficult to approach a new technology and economic tour de force like cryptocurrency, because it doesnt fit neatly into any one of the industrial-style conglomerate domains.

To highlight the conglomerate type nature of central banks, the core departments and skill sets are listed below:

Most central banks do not have substantial software development capability. Therefore any new project will have to buy its technology. There is an acute shortage of central bankers who can explain or use Merkle trees.

A large portion of central bankers are career central bankers, so the desire and ability to change arenot incentivised. Change is often considered a threat to staff, and threats are met with jelly-like stickiness to the status quo.

Banks are licensed to operate by central banks, giving them the ability to create money from customer deposits.

The central bank asks the banks to protect depositor's hard-earned money and to serve as many customers as it can: i.e. maximizingfinancial inclusion. The task of banks is therefore to service anation's citizens at the behest of the central bank.

These relationships and licenses are expensive to buy and will not easily be changed to include new members.

Just as the departments within central banks tend to be siloed, so too are the intergovernmental departments that look at currency matters.

They cover treasury, financial intelligence (KYC), financial services conduct authority, central bank, tax revenue and secret service units. Each of these units may have different acts and regulations that overlap cryptocurrencies and ICOs.

Internationally the nation-state must get guidance from a multitude of organisations like the G20 or G7, International Monetary Fund (IMF), Bank of International Settlements (BIS), Financial Action Task Force (FATF) and INTERPOL. International coordination often requires prolonged diplomacy and mismatched agendas.

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10 Reasons Why Central Banks Will Miss the Cryptocurrency Renaissance - CoinDesk