Banking is Broken? Start-ups try to fix it.

I have written earlier about problems in banking security and credit card security issues. But what about some other banking issues?

Banking is Broken: A Financial Revolution is Coming article tells that a trio of startups are seeking to change the way we manage our money, by focusing on the customers traditional banks are ignoring. Banks have been slow to embrace new technology.

Finland’s Holvi, Sweden’s iZettle and Estonias TransferWise all took the stage at the Slush startup conference in Helsinki last week, and while they all offer completely different services, they are share a similar goal – to empower the customers that they believe traditional banks are ignoring.

Holvi offers customers an alternative type of current account, integrating bookkeeping and money management in a clean, simple online interface. TransferWise, founded by the first ever Skype employee Taavet Hinrikus, is looking to bring the essence of Skype’s ethos of offering cut rate international phone calls to the money exchange market. Speaking at Slush last week de Geer said that iZettle was “effectively about democratising card payments.”

Keep in mind that Holvi, TransferWise and iZettle are just three of the hundreds of companies looking to cash-in on the revolution that is coming to the banking industry.

What made the article really interesting to me is that I happen to know one of the Kristoffer Lawson, Founder and CEO of Holvi. I have personally heard the story of how the company was put up, that they were applying the needed license and when they got it. But the article includes some a bold new statement: traditional banks are ignoring 80% of their customers.

Lawson believes that Holvi’s new type of account is “the future of banking” and his company is rethinking what it means to be a bank: Holvi offers customers an alternative type of current account, integrating bookkeeping and money management in a clean, simple online interface. It is designed for use by groups and organisations so they can collaborate, making it ideal for events such as Slush, which used the Holvi system for all its budgeting and ticketing operations this year.

And I have also heard of some other events in Finland do the same. The reason why such events have actively started to use the system is that Lawson had been earlier active on organizing different computer events, so he knows the needs of this type of organizations.


  1. Tomi Engdahl says:

    Michael del Castillo / CoinDesk:
    Enterprise Ethereum Alliance announces new members: Mastercard, Cisco, the Indian state of Andhra Pradesh, Scotiabank, others

    150 Members: Indian Government, Mastercard Join Enterprise Ethereum Alliance

    The Enterprise Ethereum Alliance is revealing its newest members.

    As with previous announcements, entrants are divided between legacy institutions and startups building on the ethereum blockchain. Included on the list is Mastercard, Cisco Systems, Scotiabank, Loyyal Corporation and QIWI Blockchain Technologies, among 29 other firms.

    But the member that perhaps stands out most in this latest batch of companies is the government of the rapidly growing Andhra Pradesh state in India, the first state government outside the US to join the alliance.

    The special chief secretary and IT advisor to the state’s chief minister, J.A. Chowdary, described in a statement the government’s ambition to leverage the membership as a way to turn the region into a financial technology tech hub.

  2. Tomi Engdahl says:

    Ingrid Lunden / TechCrunch:
    Sources: Swedish e-commerce payments firm Klarna raises around $250M at a $2.5B valuation from private equity firm Permira

    Fintech startup Klarna taps Permira for around $250M at $2.5B valuation

    Klarna, the Swedish startup that works with e-commerce businesses and retailers to provide financing and other payment services, today announced that it has picked up yet another large investment, its third inside of two months. Permira, the private equity firm and prolific late-stage tech investor, has taken a minimum 10 percent stake in the fintech business. Klarna and Permira are not confirming the exact amount getting invested, or the valuation. But TechCrunch understands that it is more than $225 million, and the FT is reporting a value of $250 million.

    Klarna the startup was last valued at $2.25 billion in 2015 and a source confirmed to us that this valuation has gone up as the business has grown.

    Klarna has raised somewhere in the region of $500 million in the last 7 weeks.

    The funding comes at a time when Klarna is doubling down on its business and making some big plans for how it wants to expand.

  3. Tomi Engdahl says:

    How fintech companies are trying to make cryptocurrency investments safer

    Trading in cryptocurrencies like Ethereum, Ripple and Litecoin can be complicated and not without risk. Fintech companies are offering easier and safer methods.

    Remember when cryptocurrencies used to be straightforward, revolutionary and weirdly romantic-capitalist? A bunch of cypherpunks were going to topple the monetary system from a subreddit and everything would be all sunshine and rainbows? It doesn’t seem that fun anymore. There’s infighting, hacks, distrust mixed with a pinch of pure greed.

    What happened?

    The main thing that happened is that these idealistic cypherpunks met cold capitalism in the form of well funded, hyper-organized cartels that weren’t interested in the culture behind the cryptocurrency movement, but just cold dead profit.

  4. Tomi Engdahl says:

    Haseeb Qureshi / freeCodeCamp:
    Recent $30M+ hack of Parity wallets shows programmers need to rethink the “move fast and break things” mindset when it comes to blockchain and security

    A hacker stole $31M of Ether — how it happened, and what it means for Ethereum

    Yesterday, a hacker pulled off the second biggest heist in the history of digital currencies.

    Around 12:00 PST, an unknown attacker exploited a critical flaw in the Parity multi-signature wallet on the Ethereum network, draining three massive wallets of over $31,000,000 worth of Ether in a matter of minutes. Given a couple more hours, the hacker could’ve made off with over $180,000,000 from vulnerable wallets.

    But someone stopped them.

    Having sounded the alarm bells, a group of benevolent white-hat hackers from the Ethereum community rapidly organized. They analyzed the attack and realized that there was no way to reverse the thefts, yet many more wallets were vulnerable. Time was of the essence, so they saw only one available option: hack the remaining wallets before the attacker did.

    By exploiting the same vulnerability, the white-hats hacked all of the remaining at-risk wallets and drained their accounts, effectively preventing the attacker from reaching any of the remaining $150,000,000.

    Yes, you read that right.

    To prevent the hacker from robbing any more banks, the white-hats wrote software to rob all of the remaining banks in the world. Once the money was safely stolen, they began the process of returning the funds to their respective account holders. The people who had their money saved by this heroic feat are now in the process of retrieving their funds.

    It’s an extraordinary story, and it has significant implications for the world of cryptocurrencies.

    It’s important to understand that this exploit was not a vulnerability in Ethereum or in Parity itself. Rather, it was a vulnerability in the default smart contract code that the Parity client gives the user for deploying multi-signature wallets.

    This is all pretty complicated

  5. Tomi Engdahl says:

    Stan Higgins / CoinDesk:
    SEC issues investigative report concluding DAO tokens, a digital asset, were securities, and securities law “may apply” to token sales — The US Securities and Exchange Commission said today that the offering and sale of digital tokens “are subject to the requirements of the federal securities laws”.

    SEC: US Securities Laws ‘May Apply’ to Token Sales

    The US Securities and Exchange Commission said today that the offering and sale of digital tokens “are subject to the requirements of the federal securities law.”

    The agency, in its statement, revealed that it had been investigating the issuance of tokens connected to The DAO, the ethereum-based funding vehicle that collapsed dramatically last summer following an exploit of a flaw in its code.

    Per the SEC, those “DAO tokens” constitute securities, though the agency said that it was not going to pursue any charges in connection with the project, but is releasing its finding “to caution the industry and market participants.”

    SEC Issues Investigative Report Concluding DAO Tokens, a Digital Asset, Were Securities

    U.S. Securities Laws May Apply to Offers, Sales, and Trading of Interests in Virtual Organizations

  6. Tomi Engdahl says:

    Camila Russo / Bloomberg:
    LedgerX is set to become the first federally regulated cryptocurrency options exchange and clearinghouse in the US after receiving CFTC license

    Bitcoin Options Will Be Available This Fall

    Start your day with what’s moving markets in Asia. Sign up here to receive our newsletter.

    Digital currency investors and miners will be able to hedge the volatile assets under U.S. regulatory oversight for the first time in just a couple of months.

    “It’s an important milestone for the digital currency market broadly,” said Paul Chou, a former Goldman Sachs Group Inc. trader, who is LedgerX’s chief executive. “This will pave the way for others globally to look at the space and the appropriate way to regulate a new market like this.”

    The New York-based company plans to offer one to six month bitcoin-to-dollars options contracts in late September to early October, Chou said in a telephone interview. Contracts for other digital currencies including for Ethereum’s ether are expected to follow, as well as longer-term protection.

  7. Tomi Engdahl says:

    Greek police arrest Russia’s Alexander Vinnik on suspicion of laundering $4B+ via bitcoin; sources say Vinnik was key person behind the BTC-e currency exchange

    Greece arrests Russian suspected of running $4 billion bitcoin laundering ring

    ATHENS/MOSCOW/NEW YORK (Reuters) – A Russian man suspected of being the anonymous mastermind behind one of the world’s oldest crypto-currency exchanges and of laundering at least $4 billion has been arrested in Greece, police and sources said on Wednesday.

    Two sources close to the BTC-e virtual currency exchange, who declined to be named while commenting on an ongoing case, said Vinnik was a key person behind the platform, which has been offline since reporting “technical problems” late on Tuesday.

    Police said “at least” $4 billion in cash had been laundered through a bitcoin platform since 2011 – the year BTC-e was founded – with 7 million bitcoins deposited, and 5.5 million bitcoins in withdrawals.

    Founded in 2011, BTC-e is one of the oldest and most obscure virtual currency exchanges, allowing users to trade bitcoin anonymously against fiat currencies, such as the U.S. dollar, and other virtual currencies. Until today, the people behind it had remained anonymous.

  8. Tomi Engdahl says:

    Financial Crimes Enforcement Network:
    US Treasury’s FinCEN fines BTC-e $110M for violating US anti-money laundering laws

    FinCEN Fines BTC-e Virtual Currency Exchange $110 Million for Facilitating Ransomware, Dark Net Drug Sales

    The Financial Crimes Enforcement Network (FinCEN), working in coordination with the U.S. Attorney’s Office for the Northern District of California, assessed a $110,003,314 civil money penalty today against BTC-e a/k/a Canton Business Corporation (BTC-e) for willfully violating U.S. anti-money laundering (AML) laws. Russian national Alexander Vinnik, one of the operators of BTC-e, was arrested in Greece this week, and FinCEN assessed a $12 million penalty against him for his role in the violations.

    BTC-e is an internet-based, foreign-located money transmitter that exchanges fiat currency as well as the convertible virtual currencies Bitcoin, Litecoin, Namecoin, Novacoin, Peercoin, Ethereum, and Dash. It is one of the largest virtual currency exchanges by volume in the world. BTC-e facilitated transactions involving ransomware, computer hacking, identity theft, tax refund fraud schemes, public corruption, and drug trafficking.

    “We will hold accountable foreign-located money transmitters, including virtual currency exchangers, that do business in the United States when they willfully violate U.S. anti-money laundering laws,” said Jamal El-Hindi, Acting Director for FinCEN. “This action should be a strong deterrent to anyone who thinks that they can facilitate ransomware, dark net drug sales, or conduct other illicit activity using encrypted virtual currency. Treasury’s FinCEN team and our law enforcement partners will work with foreign counterparts across the globe to appropriately oversee virtual currency exchangers and administrators who attempt to subvert U.S. law and avoid complying with U.S. AML safeguards.”

  9. Tomi Engdahl says:

    Nathaniel Popper / New York Times:
    Some Bitcoin backers plan to launch a competing version called Bitcoin Cash on August 1, with support for more transactions per block

    Some Bitcoin Backers Are Defecting to Create a Rival Currency

  10. Tomi Engdahl says:

    Cybercriminals Study-up on Credit Card Fraud

    Credit card fraud has been big business for quite some time with losses expected to reach $24 billion by 2018. There are two types of credit card fraud – physical card fraud which involves the cloning of credit cards and Card Not Present (CNP) fraud, when the card is used online and over the phone. While the Europay, Mastercard and Visa (EMV) chip technology has made physical card fraud more difficult, online card spending is expected to double by 2021 and business will likely continue to boom for fraudsters.

    We all know that cybercriminals don’t operate alone. Benefitting from a rich ecosystem that provides supporting infrastructure, malware and money services, even less sophisticated actors can turn a profit. Lately we’ve seen an influx of extremely professional online tutorials designed to educate bad actors on the latest fraud tactics and tools. Complete with webinars, instructors and reading material, these online courses also provide insights that defenders can use to protect against this increasingly popular threat. Here is just a glimpse into what students can learn from one class that costs nearly $1,000 and is conducted in Russian, targeting fraudsters in that geography.

    How to find shops that sell credit card details. Alphabay, one of the largest marketplaces for illicit goods, was recently shut down, but a Google search returns almost 25,000 results of other shops that traffic in credit card information.

    How to socially engineer individuals. A week-long lecture series focuses on how to build local knowledge and rapport with the target.

    How to cash out. Fraudsters are coached on three main ways to make a profit – direct purchase, agent fraud and through the use of drops and middlemen. For direct purchase they target sites that are “card-able,” meaning susceptible to fraudulent purchases as a result of lax security controls. Agent fraud involves impersonating an agent, for example from an airline or hotel, making a reservation in the cardholder’s name, and then changing the reservation name once the card is authorized. The use of drops and middlemen includes a range of techniques that involve duping individuals and legitimate delivery companies to reship stolen goods and counterfeit money to safe addresses.

    As the opportunity for payment card fraud grows, it’s safe to assume that more cybercriminals will take advantage of new, sophisticated online courses to get a piece of the pie. Even as you put additional precautions in place, remember that attackers continue to innovate and update their training regularly.

  11. Tomi Engdahl says:

    Cryptocurrency miners are renting Boeing 747s to ship graphics cards

    Have you ever had a moment where you didn’t know whether to laugh or cry? That’s the situation playing out in the graphics card market because of the cryptocurrency mining boom, a topic we’ve covered extensively in recent months. But just when we thought there was nothing left to report on the matter, it’s come out that some of the most active Ethereum miners are renting Boeing 747 airplanes to ship orders of graphics cards. Yes, seriously.

    That is the sort of money that is at stake here. Cryptocurrency is highly volatile, Ethereum included. For miners with massive setups, shipping by sea is just too slow.

    “Time is critical, very critical,” Marco Streng, chief executive of Genesis Mining, told Quartz. “For example, we are renting entire airplanes, Boeing 747s, to ship on time. Anything else, like shipping by sea, loses so much opportunity.”

    Ethereum miners are renting Boeing 747s to ship graphics cards and AMD shares are soaring

    Advanced Micro Devices’ (AMD) share price jumped after it beat revenue estimates thanks to cryptocurrency miners snapping up the firm’s graphics cards. Shares rose 11% after the chip company announced earnings on July 25, but the firm’s stock is up 152% over the last 12 months, making it the fourth best performer on the S&P 500, CNBC reported.

    Lisa Su, AMD’s chief executive, said the firm saw “elevated demand” from cryptocurrency miners during the quarter. This need for graphics cards helped AMD give a “solid beat” to analyst estimates,

  12. Tomi Engdahl says:

    Frank Chaparro / Business Insider:
    As Bitcoin splits in two, many exchanges including Coinbase don’t support Bitcoin Cash fork — Bitcoin power brokers were unable to come behind a single solution that would have preserved a unified cryptocurrency by Tuesday morning’s deadline.

    Bitcoin splits in 2

    Bitcoin power brokers were unable to come behind a single solution that would have preserved a unified cryptocurrency by Tuesday morning’s deadline.

    As such, the digital currency has officially forked and split in two: bitcoin cash and bitcoin.

    Miners were able to seek out bitcoin cash beginning Tuesday morning, and the cryptocurrency-focused news website CoinDesk said the first bitcoin cash was mined at about 2:20 p.m. ET.

    “There seems to be some technical issues that might be slowing it down, but yes, the fork has happened,” Peter Borovykh of Blockchain Driven, a blockchain technology company, told Business Insider earlier on Tuesday.

    It took a couple of hours after the official fork for miners to unlock the first bitcoin cash coins.

    Bitcoin was the first digital currency built on blockchain technology, in which transactions are independently verified by the network without the need of a middleman like a bank. Bitcoin cash is built on the same blockchain network as bitcoin, but the new software increases the size of the “blocks” that make up the network to allow it to process more information.

    Supporters of the newly formed bitcoin cash believe the currency will “breath new life into” the nearly 10-year-old bitcoin by addressing some of the issues facing bitcoin of late, such as slow transaction speeds.

    The solution is a fork of the bitcoin system. The new software has all the history of the old platform; however, bitcoin cash blocks have a capacity 8 megabytes.

  13. Tomi Engdahl says:

    Bitcoin Cash Just Mined its First Block, Making Blockchain Split Official

    Bitcoin • News • Technology News
    An effort to create an alternative version of the bitcoin blockchain is officially moving ahead.

    According to CoinMarketCap, the price of Bitcoin Cash is trading at roughly $219 on digital currency exchange Kraken. The exchange’s top marketplace, for the BTC/BCH trading pair, is reporting more than $3m in volume since launch

  14. Tomi Engdahl says:

    Tomio Geron / Wall Street Journal:
    Startup incubator Science announces blockchain-related program, called Science Blockchain, funded via ICO starting Sept. 18; sources say ICO has $50M-$100M goal

  15. Tomi Engdahl says:

    Coinbase to Let Users Withdraw Bitcoin Cash After Outcry

    The world’s most popular digital currency exchange, Coinbase, reversed course on Thursday and announced it would accept a new bitcoin offshoot that was issued to every bitcoin owner.

    The reversal comes after days of tumult as angry Coinbase customers demanded to know why the company had not released their new currency, called Bitcoin Cash, to them. The exchange rate for the currency, which began trading on August 1, briefly reached $700 on Wednesday and is currently trading around $400.

    Coinbase announced the decision in a blog post, explaining it wanted to first ensure the company could safely support Bitcoin Cash before developing technology to support it. The exchange said it would start supporting Bitcoin cash begining on Jan. 1, 2018.

    Update on Bitcoin Cash

    Forks enable innovation and improvements to digital currency and we believe that we will see an increasing number of forks in the future. We expect this to be a vibrant and innovative community.

    When a digital currency forks, it creates a new digital asset. Adding new digital assets to Coinbase must be approached with caution. Not every asset is immediately safe to add to Coinbase from a technical stability, security, or compliance point of view.

    Our top priority is the safety of customer funds and we spend extensive time designing, building, testing and auditing our systems to ensure that the digital assets we support remain safe and secure. We may not always be first in adding an asset

    In the case of bitcoin cash, we made clear to our customers that we did not feel we could safely support it on the day it was launched. For customers who wanted immediate access to their bitcoin cash, we advised them to withdraw their bitcoin from the Coinbase platform. However, there are several points we want to make clear for our customers:

    Both bitcoin and bitcoin cash remain safely stored on Coinbase.
    Customers with balances of bitcoin at the time of the fork now have an equal quantity of bitcoin cash stored by Coinbase.
    We operate by the general principle that our customers should benefit to the greatest extent possible from hard forks or other unexpected events.

  16. Tomi Engdahl says:

    Stan Higgins / CoinDesk:
    Blockchain-based data storage network Filecoin sold $52M worth of tokens to accredited investors including USV and Sequoia in a pre-sale ahead of ICO next week

    Filecoin Presale Raises $52 Million Ahead of ICO Launch

    San Francisco-based startup Protocol Labs has sold $52 million in a token pre-sale ahead of an initial coin offering launch next week.

    Notable backers of the Filecoin pre-sale include Union Square Ventures and Sequoia Capital, according to a representative of the startup. The Wall Street Journal covered the pre-sale earlier today, and in a tweet, reporter Yuliya Chernova said that Winklevoss Capital, Digital Currency Group and Y Combinator president Sam Altman also took part.

    The startup did not immediately respond to a request for additional information about the pre-sale’s backers.

    Filecoin is a blockchain-based data storage network with its own built-in cryptocurrency. The idea is that users can effectively offer some of their excess storage capacity for sale, and receive payment in the form of filecoins.

  17. Tomi Engdahl says:

    Beyond the boring blockchain bubble

    The silly season continues. Speculators are piling into the cryptocurrency space in the hopes of–sometimes very literally–making money fast. As I write this Ethereum’s value has halved since June but is still 20x since January. Litecoin is up 12x since then. Even Bitcoin has tripled, again. It seems like everyone now has an opinion on, and a position in, cryptocurrencies.

    And hey, if you want to speculate, and casinos seem too sedate and controlled to you, then more power to you, jump right in. But for those of us who are interested in the technology, not the money — who think that blockchains are primarily interesting because, unlike most modern technology, they decentralize power — so far this has actually been a mostly disheartening year.

  18. Tomi Engdahl says:

    Jeff John Roberts / Fortune:
    Delaware law that lets corporations maintain shareholder lists and other corporate records using blockchain technology went into effect this week

    Companies Can Put Shareholders on a Blockchain Starting Today

    Blockchain got a big boost on Tuesday when a Delaware law went into effect that lets corporations maintain shareholder lists, along with other corporate records, using the technology. Already, several companies, including the retailer Overstock, say they intend to use it.

    Delaware’s decision to bless blockchain—which is a type of software that creates indelible records across multiple computers—is significant because the state is America’s de facto corporate law capital, and more than two-thirds of Fortune 500 companies are incorporated there.

    “The Delaware statute is enabling—it doesn’t require any particular type of blockchain ledger,” said Marco Santori, a partner with the law firm Cooley, who advised the state on the plan.

    Santori said it will take some time for companies to get up to speed on the technology, and for vendors to build tools to begin recording their shareholder lists and other documents onto blockchains. He added that a number of big companies have been speaking with Delaware officials about using the technology, but was not at liberty to say which ones.

  19. Tomi Engdahl says:

    Samson Mow / Fortune:
    Bitcoin Cash is an untested Bitcoin fork that is putting undue pressure on Bitcoin exchanges and wallet providers to support the currency — The newly created Bitcoin Cash (BCH) is a rushed spinoff of Bitcoin (BTC), a clonecoin of which there have been many in Bitcoin’s past.

    The Bitcoin Cash Fork Was a Dangerous Trick

    The newly created Bitcoin Cash (BCH) is a rushed spinoff of Bitcoin (BTC), a clonecoin of which there have been many in Bitcoin’s past. Because the name is confusing, many have taken to calling it “Bcash” to avoid buyer confusion.

    There have been myriad clonecoins of various types since Bitcoin’s inception. Bitcoin Cash is a style of clone that copies Bitcoin’s codebase along with its blockchain up until a certain point. Normally when new alternative cryptocurrencies are created, developers just clone the code and not the blockchain. But Bitcoin Cash copied Bitcoin’s blockchain as well, which created a situation in which everyone that had one bitcoin suddenly also had one bitcoin cash.

    The creation of Bitcoin Cash was an orchestrated scheme, rushed to the point of engendering significant safety risks. Digital currencies just don’t spontaneously appear out of nowhere. The Bitcoin Cash fork was created by a developer that wanted to increase block sizes, with the hypothetical result being more transactions being processed on the blockchain.

    This might sound like a good idea, but clonecoins can be incredibly disruptive to risk management and operational demands on digital currency infrastructure companies. The cost to launch a clonecoin is minimal, but the overhead for the ecosystem to actually support it is high. As Bitcoin Cash duplicated Bitcoin, at the time of the fork every bitcoin holder now had coins on another blockchain, and therefore skin in the game. This was a type of psychological experiment to see if people as a group could be tricked into ascribing value to something created from nothing, if they were given it as a gift. This experiment seemed to work, and it put a great deal of pressure on exchanges and wallet providers to support Bitcoin Cash, whereas a new altcoin would largely just be ignored.

    In Bitcoin Cash, keys controlling ownership of coins are shared with real Bitcoin investments totaling $50 billion. Sharing those Bitcoin keys with untested software in order to claim a Bitcoin Cash gift is highly risky—maybe too risky.

    The Bitcoin Cash chain may survive, but its value will likely dip below $100. It’s currently trading anywhere from $200 to $300 on various exchanges, but this price is artificially inflated due to many exchanges refusing to accept deposits, as well as the Bitcoin Cash blockchain not functioning properly.

    Bitcoin’s blockchain processes a block of transactions roughly every 10 minutes, but Bitcoin Cash average block times are an hour (sometimes with no blocks for 13 hours). This means that users are having issues with even sending their bitcoin cash to exchanges to sell off.

  20. Tomi Engdahl says:

    Mary Jo Foley / ZDNet:
    Microsoft debuts open source Coco Framework to address limitations of enterprise blockchain by making it more scalable, governable, and confidential

    Microsoft debuts Coco Framework to improve blockchain performance, privacy

    Microsoft is working to address some of the current limitations of enterprise blockchain with a new cross-platform framework designed to make it more scalable, governable and confidential.

    The Coco Framework — short for “confidential consortium” — is meant to work with any ledger protocol and work on any operating system and hypervisor that supports a compatible Trusted Execution Environment (TEE), or secure area of a processor. The Framework can be used on-premises and/or in various vendors’ clouds, officials said.

    Microsoft is making a technical whitepaper about the Coco Framework available today. Officals said they will make the framework available on GitHub in 2018 as an open source project.

  21. Tomi Engdahl says:

    Here’s What Goldman Is Telling Big Money Clients About Bitcoin

    Strategists say ‘hype cycle’ in full effect for cryptos
    Q&A to customers doesn’t address whether to buy digital assets

    Goldman Sachs Group Inc. is acknowledging that it’s getting harder for institutional investors to ignore the cryptocurrency market with total assets ballooning to $120 billion and bitcoin soaring more than 200 percent this year.

    “Whether or not you believe in the merit of investing in cryptocurrencies (you know who you are), real dollars are at work here and warrant watching,” analysts including Robert Boroujerdi and Jessica Binder Graham wrote in a Q&A sent to clients.

  22. Tomi Engdahl says:

    Wolfie Zhao / CoinDesk:
    Bitfinex to stop all services to US clients in the next 90 days, citing SEC’s recent investigative report that said securities law may apply to ICO token sales

    Bitfinex to Bar US Customers from Exchange Trading

    Bitfinex, one of the largest cryptocurrency exchanges by volume, has announced it will no longer allow U.S. investors to purchase certain tokens on its exchange that may be at risk of running afoul with regulators.

    According to the company’s latest announcement, Bitfinex will also be making other changes to its service, no longer accepting verification requests for U.S. individuals effective immediately. Further, in the next 90 days, it will gradually discontinue all services to U.S. customers.

    The exchange explained that the decision follows a recent investigation by the U.S. Securities and Exchange Commission (SEC) on how tokens issued by way of an initial coin offering (ICO) may be considered securities.

    Announcements > Service Changes for U.S. Customers (Amended as of August 12, 2017)
    August 11, 2017

  23. Tomi Engdahl says:

    Fitz Tepper / TechCrunch:
    Bitcoin passes $4,000 mark amid ICO frenzy and a slowdown in momentum behind Bitcoin Cash

    Bitcoin just passed $4,000

    24 hours ago the cryptocurrency was trading below $3,700. About an hour ago it surged passed $4,000 and has no signs of stopping. It’s now trading around $4,135.00. For reference, a week ago Bitcoin hit an all-time high as it passed $3,000 for the first time.

    Two weeks ago Bitcoin went through a hard fork, and came out essentially unscathed. Sure, a bitcoin-clone called Bitcoin Cash was created, but it’s gotten a lot less attention than most people expected. A few days later Bitcoin locked in SegWit, a code modification that fixes malleability issues and frees up space in blocks, allowing for more transactions to be stored in each one.

    These two code-related developments have helped boost conference in Bitcoin’s future.

    Another reason – the ICO frenzy. The amount recently raised via initial coin offerings have now (at least temporally) topped amount raised via early stage venture capital.

    Another reason – Wall Street’s new obsession is bitcoin. You can’t watch CNBC for five minutes without seeing a trader or analyst give their opinion – which is usually something insanely bullish like “it’s going to be the best performing investment of the year”. For better or for worse, statements like these are getting non-technically inclined investors interested in bitcoin, some of which are definitely buying coins for the first time.

    So what happens next? No one knows. Bitcoin could crash 50% to $2,000 tomorrow or spike to $5,000

  24. Tomi Engdahl says:

    Blockchain Fortifies Supply Chain

    Thanks in part to increasing globalization, supply chain for consumer and industrial goods alike has over time become convoluted and opaque. Enter the concept of blockchain.

    BADEN-WÜRTTEMBERG, GERMANY — Where was it made? By whom? Amid densely wooded mountains and valleys, these are perennial questions asked by tourists to Germany’s Black Forest region, dotted with medieval castles, half-timbered houses, and stone-bridge villages. Home to global manufacturing champions such as Carl Zeiss AG and Robert Bosch GmbH, the region is also birthplace to countless Mittelstand firms famed for their world-class products from wristwatches to furniture to beer. As such, Baden-Württemberg is at once contributor and ambassador to the proud label “Made in Germany” and all the gravitas that comes with.

    Baden-Württemberg’s tourists are not alone in their search of authenticity and provenance. Thanks in part to increasing globalization, supply chain for consumer and industrial goods alike has over time become convoluted and opaque. Indeed semiconductor counterfeiting has long been a serious concern to design engineers, supply chain professionals, and the semiconductor industry itself. Just last week, AspenCore’s EE Times and EE Times Asia covered the most recent incident of counterfeit AMD Ryzen 7 processors listed for sale on Amazon here and here. Moral of the story: buy only from official franchisees, and partner with your distributor to regularly audit your supply chain.

    And yet at AspenCore we are surprised for all its benefits and “here now” application in the financial services sector, blockchain technology seems to have garnered disproportionately little public attention in semiconductor circles. A simple protocol that allows transactions to be simultaneously anonymous and secure by maintaining a tamper-proof distributed ledger of value, blockchain has been dubbed The Trust Protocol by advocates and has been re-shaping money as we know it.

  25. Tomi Engdahl says:

    Cash disappears in Sweden over the next ten years

    Cash use in Sweden is slowing down.

    This development is also promoted by the fact that an increasing number of business people, such as restaurants and shops, are not receiving cash.

    According to an unpublished study by Kungliga Tekniska Högskolan, in 2030 two-thirds of the Swedish trade would no longer receive cash.

    One of the authors of the study notes Ny Teknik , believing that Sweden will move to a cashless society by 2030 at the latest.

    Cash handling is a waste for banks. Today, 80 per cent of Swedish purchases are made on a card.



  26. Tomi Engdahl says:

    Bitcoin Is Forking. Again.

    Merely weeks after it was announced that Bitcoin was splitting into two separate entities, the initial version of bitcoin and it’s new “bitcoin cash,” the network is adding a third version, according to a report

    On Wednesday, a group of bitcoiners scheduled yet another split for the network in November, which would create a third version of bitcoin. So, what makes this version different from the others? Right now, the bitcoin network can sometimes take a long time to process transactions due to so many people using it. This is because the “blocks” of transaction data that get added to bitcoin’s public ledger, the blockchain, are getting full. In the weeks preceding the fork, bitcoin coalesced around a solution called “segregated witness,” which will change how data is stored in blocks to free up some space when it kicks in later in August. But the size of the blocks themselves will stay at one megabyte on the original bitcoin blockchain.

    They call the fork Segwit2x. Now, that’s exactly what’s happening. According to an announcement posted to the Segwit2x GitHub repository, a bitcoin block between one and two megabytes will be created at block 494,784.

    Bitcoin Is Forking. Again.
    Jordan Pearson

    Jordan Pearson
    Aug 16 2017, 9:41pm
    In November there will be three versions of the world’s most popular cryptocurrency.

    Just a few years ago it seemed like bitcoin was a singular force, which in retrospect was incredibly naive since it’s open source tech managed by a bunch of fighting nerds.

    After a years-long debate about how best to speed up the bitcoin network failed to resolve in unanimous agreement, in July bitcoin “forked,” a term for when open-source software gets cloned by users who want to create their own version. This created two different versions of the world’s most popular digital currency. Now, the fork is becoming a trident. On Wednesday, a group of bitcoiners scheduled yet another split for the network in November, which would create a third version of bitcoin.

    Now, that’s exactly what’s happening. According to an announcement posted to the Segwit2x GitHub repository, a bitcoin block between one and two megabytes will be created at block 494,784. After that, anybody who wants to join the New York Agreement signatories on the Segwit2x chain can create bitcoin blocks on top of that one. Thus, a new blockchain with its own set of rules will be created. Bitcoin’s timing works via blocks, which can come at unpredictable intervals (although usually around one every ten minutes), and so the exact timing of the hard fork isn’t known, but it should occur in November.

  27. Tomi Engdahl says:

    Just so it’s super-crystal-clear, here’s what the main differences are:

    - One megabyte blocks
    - Segregated witness

    Bitcoin Cash
    - Eight megabyte blocks
    - No segregated witness

    Segwit2x/New York Agreement
    - Two megabyte blocks
    - Segregated witness

    What does any of this mean? Well, basically, things are about to get even more interesting as the community and industry ecosystem decides which bitcoin versions to support, and how. One may even die out. At the very least, we’ll get a real-time test of how these different approaches to scaling bitcoin eventually work out.


  28. Tomi Engdahl says:

    Toronto Receives its First Ethereum ATMs, Targeting Mainstream Adoption

    LocalCoinATM, the Ontario-based bitcoin and Ethereum ATM manufacturer, has installed its first batch of Ethereum ATMs in Canada

  29. Tomi Engdahl says:

    Christine Chiang / Brave New Coin:
    ZeroEx raises $24M in an ICO for 0x protocol that enables the trading of Ethereum’s ERC-20 compliant tokens without the need of centralized exchanges

    Zero Ex Intl is making decentralized trading a reality

    Application coins, or “appcoins,” are being minted at an astounding rate. Many of these coins have gone through a fundraising process named Initial Coin Offering (ICO), token sale, or token distribution event.

    The company behind the 0x project, Zero Ex Intl, recently raised US$24 million in a token sale utilizing a sybil-resistant distribution process by using Vinny Lingham’s Civic mobile application. 50% of a total 1 billion tokens were distributed to sale participants, who were limited to 20 ether’s worth of ZRX per account.

    ZRX is an ERC-20 compliant token, launched on Ethereum, the platform for decentralized applications, or dApps, built on smart contracts. The number of ERC-20 token complaint contracts in existence, at the time of press, is above 5,297. This rapidly growing token economy’s market capitalization is above $2.2 billion.

  30. Tomi Engdahl says:

    Stan Higgins / CoinDesk:
    Decentraland, a virtual reality world project that uses blockchain tech to track ownership of digital plots of land, raises $25M via ICO — A virtual reality project built on top of blockchain technology has raised over $26 million in ether via an initial coin offering (ICO).

    $26 Million: Blockchain VR Project Decentraland Raises New Funding in ICO

    A virtual reality project built on top of blockchain technology has raised over $26 million in ether via an initial coin offering (ICO).

    Decentraland, as previously reported by CoinDesk, is looking to create a virtual world, in which blockchain acts as a registry for digital plots of land. Among those involved is developer Manuel Aráoz, who also built the bitcoin document timestamping tool Proof of Existence.

  31. Tomi Engdahl says:

    Taylor Cromwell / Bloomberg:
    How US restaurant chains are enlisting Facebook, Amazon, and adopting new tech like chatbots and digital payments, to make ordering and paying for food easier — TGI Fridays is letting customers pay bill with Amazon accounts — Largest U.S. pizza chains are locked in game of oneupmanship

    Americans Love Ordering Pizza on Facebook

    TGI Fridays is letting customers pay bill with Amazon accounts
    Largest U.S. pizza chains are locked in game of oneupmanship

    The cutthroat U.S. restaurant industry is getting increasingly aggressive about technology, enlisting Facebook Inc. and Inc. in their race to make it easier for customers to order and pay for their food.

    Last month, TGI Fridays began letting customers foot the bill using their Amazon accounts. And pizza chains are locked in an escalating battle to adopt new ordering methods — a contest that involves chat bots, voice-activated devices and social networks.

    Papa John’s International Inc. went so far as to declare itself an “e-commerce company” this month after delivering surprisingly strong results.

    “We’re much more close, I would argue, to Amazon than we are to a brick-and-mortar restaurant,” Brandon Rhoten, Papa John’s chief marketing officer, said in an interview.

  32. Tomi Engdahl says:

    This 18-year-old digital-currency millionaire thinks bitcoin could hit $10,000 a coin

    Erik Finman may be only 18, but he’s a millionaire, thanks to a very shrewd and early investment in bitcoin.

    And despite the recent tumult in the world of digital currency and a huge run-up in the value of bitcoin, Finman is still a bitcoin believer. By his reckoning, the cyber currency still has a ton of upside.

    The teen mogul is putting his money where his mouth is. He owns 403 bitcoins, which give him a net worth of around $1.7 million. He’s not going to college, and he doesn’t have a steady job. He’s just focusing on his bitcoin investments. Well, that and launching a satellite stocked with a signed Taylor Swift CD into low-earth orbit.

    His faith in bitcoin hasn’t been shaken by recent events, such as the explosive growth of Ethereum, a rival digital currency system, the “hard fork” to bitcoin that divided the market for the currency, or the big rise in the value of bitcoin. Each coin is now worth more than $4,300, up from less than $1,000 each as recently as March.

  33. Tomi Engdahl says:

    WhatsApp beta for Android 2.17.295: what’s new?


    Recently we wrote about Business serviced synced and the Business app.
    Next WhatsApp step, that should be available when all business services will be released for all users, will be payments.

    WhatsApp Payments: “the immediate bank to bank transfer with UPI”, reports the official WhatsApp Payments section for Android, that’s still hidden and under development.
    As mentioned in the screenshot, in order to use WhatsApp Payments, you will have to accept the WhatsApp Payments and Bank Terms and Privacy Policy.

  34. Tomi Engdahl says:

    Robert Hackett / Fortune:
    IBM announces collaboration with Walmart, Unilever, Nestlé, and other food giants, to apply blockchain tech to food supply chains and improve food safety

    Walmart and 9 Food Giants Team Up on IBM Blockchain Plans

    Walmart and a group of food giants are teaming up with IBM to explore how to apply blockchain technology, also known as distributed ledger tech, to their food supply chains.

    The coalition includes retailers and food companies such as Unilever (ul, +0.57%), Nestlé , and Dole (dole). They will be aiming to use blockchains, a technology that made its name as the basis of the cryptocurrency Bitcoin, to maintain secure digital records and improve the traceability of their foodstuffs, like chicken, chocolate, and bananas.

    These companies see blockchains as an opportunity to revamp their data management processes across a complex network that includes farmers, brokers, distributors, processors, retailers, regulators, and consumers. One potential benefit: investigations into food-borne illnesses to take weeks (see this summer’s fatal Salmonella outbreak linked to papayas), but a blockchain-based system has the ability to reduce that time to seconds.

  35. Tomi Engdahl says:

    Mark Cuban Backs Cryptocurrency Fund After Saying Bitcoin Is a Bubble

    Billionaire investor and Bitcoin doubter Mark Cuban is coming around on cryptocurrency.

    Despite saying Bitcoin was a bubble in early June, Cuban has backed venture capital firm 1confirmation, according to Bloomberg. The firm not only has plans to invest some $20 million in companies developing blockchain technologies, but it also wants to invest in early stage companies before they head into an initial coin offering (ICO)—a fundraising effort in which the offering company issues tokens rather than ownership stakes.

    Founded by Runa Capital principal Nick Tomaino, 1confirmation hopes an early stage investment in a promising albeit unproven company could lead to a discounted token price once young company holds an ICO, according to Bloomberg.

    5 Ways Businesses Are Already Using Blockchains

    Amid the hype surrounding Bitcoin and Ethereum, it’s easy to overlook how blockchains—the technology behind those currencies—are already transforming major industries. For businesses, the opportunities to secure supply chains, eliminate middlemen, and cut costs are increasingly compelling. Here are five examples of blockchains in action.


    Maersk, the world’s largest shipping company, completed an inaugural test this spring of using a blockchain to track its cargo. The test involved not just Maersk but a series of third parties—the shipper, Dutch customs, and the U.S. Department of Homeland Security—with all of them tracking containers remotely.


    Despite its sophistication, the banking industry is still bedeviled by sluggish systems that can take hours or days to confirm basic transactions such as stock sales or money transfers. But the ongoing adoption of blockchains by the likes of Barclays, which conducted a groundbreaking transaction (it involved butter exports) using the technology in 2016, means this is changing.


    You might not peg Walmart (wmt, +0.39%) as a blockchain pioneer. But the retail giant began using the technology in 2016 to track how pigs from China moved through the supply chain to the American table.


    All sorts of agreements—from home sales to business purchases to employee contracts—require lawyers and courts to enforce. Now, more firms are experimenting with “smart contracts” that execute themselves: A blockchain system can, for instance, release money from escrow once one party to a contract transfers a deed.


    The diamond business is a tight-knit industry whose members and customers share common concerns over stones’ origins and authenticity. This helps explain the success of Everledger, a company that can record over 40 identifying features of a diamond, including color and clarity, and register them to a blockchain.

  36. Tomi Engdahl says:

    Joon Ian Wong / Quartz:
    Profile of China’s Bitmain, which is a major player in bitcoin mining rig market, controls 29% of Bitcoin hash rate, and is entering deep learning ASIC market

    China’s Bitmain dominates bitcoin mining. Now it wants to cash in on artificial intelligence

    Two years ago, a Chinese chip-design expert named Micree Zhan was reading China’s seminal science-fiction novel, The Three-Body Problem, by Liu Cixin, while wrestling with how to create a new processor. He had already designed custom chips for the company he co-founded, Bitmain, that had made it into the world’s leading bitcoin miner, allowing it to dominate the new, hyper-competitive industry of unearthing bitcoins. Now he needed a chip that could launch Bitmain onto a new trajectory, one that would help it master a world-altering technology called deep learning, a branch of artificial intelligence.

    Bitmain’s newest product, the Sophon, may or may not take over deep learning.

    he Sophon unit will include Bitmain’s first piece of bespoke silicon for a revolutionary AI technology

  37. Tomi Engdahl says:

    Here’s Why People Don’t Buy Things With Bitcoin

    One reason for this, if you live in Toronto like me (or anywhere else for that matter), is that there’s basically nowhere to spend digital coins in the real world. Coinmap, a service that maps bitcoin-accepting locations all over the world, shows a few places that accept bitcoin in Toronto, but it’s clearly out of date

    Here’s Why People Don’t Buy Things With Bitcoin
    Thankfully, a potential fix is about to kick in.

    You may have heard that bitcoin is a digital currency worth more than $4,000 USD. What you may not have heard is that it’s basically impossible to buy anything normal with it.

    One reason for this, if you live in Toronto like me (or anywhere else for that matter), is that there’s basically nowhere to spend digital coins in the real world. Coinmap, a service that maps bitcoin-accepting locations all over the world, shows a few places that accept bitcoin in Toronto, but it’s clearly out of date—I called several businesses listed on the site and they had no idea what bitcoin even is.

    A bigger problem is perfectly illustrated in a Reddit post from Wednesday morning complaining that a bitcoin transaction worth just $9 still hasn’t gone through the network after two days of waiting. Two. Days. The likely reason is that the fee attached to the transaction in order to incentivize faster confirmation—50 cents, which is about as much of a premium as I’d pay for a $9 transaction—simply wasn’t enough.

    What this means is that during a traffic spike in the bitcoin network, if you want to pay $3 for a coffee with bitcoin, you might have to pay an extra $3 or more just to get your transaction confirmed in a timely manner. The restaurant (or bar, or shop) could let you go before the transaction is confirmed, but then they take on the risk of selling their goods for IOUs.

    This state of affairs has been a looming problem for a while: We wrote about the dying dream of buying coffee with bitcoin last year. Arguments over how to fix this have torn the community apart, and splinter groups are coming up with their own solutions.

  38. Tomi Engdahl says:

    Aaron van Wirdum / Bitcoin Magazine:
    As SegWit has now been activated, a look at the history of arguably the biggest Bitcoin protocol upgrade, including the politics, criticism, and more — Segregated Witness (SegWit) has activated on Bitcoin. As of today, all SegWit-ready nodes on the Bitcoin network are enforcing the new rules …

    The Long Road to SegWit: How Bitcoin’s Biggest Protocol Upgrade Became Reality

    Segregated Witness (SegWit) has activated on Bitcoin. As of today, all SegWit-ready nodes on the Bitcoin network are enforcing the new rules, marking Bitcoin’s biggest protocol upgrade to date.

    But activation did not come easy, and it did not come fast.

    This is a look back at the long road to SegWit.

    The Problem

    Bitcoin transactions consist of two main parts. One part is “base transaction data.” That covers which bitcoins are being moved and where they are being moved to, as well as some other data. The second part is called the “witness.” This contains a bit of code with cryptographic signature data, which proves that the owner of a bitcoin really did want to spend the bitcoin.

    It’s this signature data that brings a slight complication with it. In what is referred to as the “malleability bug,” Bitcoin signatures can be slightly altered by anyone, even after these signatures are created and without invalidating the signatures. This in turn means that the appearance of the whole transaction, and more specifically the transaction identifier, can be altered by those relaying transactions over the Bitcoin network or by miners that include transactions in blocks.

    Transactions are still valid and will move the bitcoins from the same place to the same place, under all the same conditions. However, it does complicate creating newer transactions depending on unconfirmed transactions: New transactions need to know the transaction identifier they rely on. This, in turn, makes it significantly harder to build certain second-layer protocols on top of Bitcoin, like bi-directional payment channels.

    The general idea to solve the malleability bug by “separating” signature data from other transaction data stems back several years.

    But despite initial excitement, Segregated Witness had its critics, too.

    At the same time that SegWit was being developed, block size tensions in the Bitcoin community were once again heating up. This time spearheaded by Bitcoin Classic, a number of Bitcoin companies and miners appeared determined to hard fork in order to increase the block size limit to 2 megabytes.

  39. Tomi Engdahl says:

    Estonia could offer ‘estcoins’ to e-residents

    The proposal to issue crypto tokens would make the Republic of Estonia the first country with an Initial Coin Offering (ICO).

    What would happen if a country, such as Estonia, issued its own crypto tokens?

    This radical question is at the heart of an ambitious new proposal that, if implemented, has the potential to benefit both the country and its fast growing community of e-residents.

    ‘Estcoins’ could be managed by the Republic of Estonia, but accessed by anyone in the world through its e-Residency programme and launched through an Initial Coin Offering (ICO).

    Just a reminder — this is not national policy yet, but it is an idea worth considering, which has the potential to become reality.

    ‘Estonia has just 1.3 million residents, but what would happen if our country had 10 million digital residents too?’

    At that time, every citizen and resident could already obtain a secure digital identity that enabled them to access Estonia’s public services entirely online. This minimised bureaucracy and made every day life easier, especially for entrepreneurs.

  40. Tomi Engdahl says:

    Burger King has launched its own cryptocurrency in Russia called ‘WhopperCoin’

    Burger King launched its own version of bitcoin in Russia – called the “WhopperCoin”
    WhopperCoin tokens would be used to reward customers for each purchase of a Whopper sandwich
    The Russian government seems to have relaxed its stance on cryptocurrencies in recent weeks

    Burger King has waded into the cryptocurrency market with the launch of its own virtual coin called “WhopperCoin” in Russia.

    With each purchase of the burger chain’s signature Whopper sandwich, customers can receive WhopperCoin tokens via a digital wallet.

    Bitcoin traders have previously gotten a lot of flak in Russia, with reports last year suggesting users could even face jail time under proposed legislation.

    However Russia’s First Deputy Prime Minister Igor Shuvalov has since shown support for cryptocurrencies. In an interview with Russian media organization RBC, he said: “I am a supporter, a cryptoround (sic) must exist.”

    How WhopperCoin would work

    WhopperCoin transactions will be powered by Ethereum rival Waves’ distributed ledger network. The blockchain platform allows users to issue and transfer custom blockchain tokens, and to trade them on an integrated peer-to-peer exchange.

    A blockchain is essentially a ledger of transactions that cannot be tampered with or changed. Such technology has been promised to revolutionize processes from financial trades to legal “smart” contracts.

    Burger King has launched its own cryptocurrency in Russia called ‘WhopperCoin’

    Burger King has waded into the cryptocurrency market with the launch of its own virtual coin called “WhopperCoin” in Russia.

    With each purchase of the burger chain’s signature Whopper sandwich, customers can receive WhopperCoin tokens via a digital wallet.

    Bitcoin traders have previously gotten a lot of flak in Russia, with reports last year suggesting users could even face jail time under proposed legislation.

    However Russia’s First Deputy Prime Minister Igor Shuvalov has since shown support for cryptocurrencies. In an interview with Russian media organization RBC, he said: “I am a supporter, a cryptoround (sic) must exist.”

    In a press announcement Friday, Waves said the tokens would be used to reward customers for each purchase of the Whopper, and eventually to buy burgers in exchange for the tokens once a customer has collected enough.

    The coins can also be transferred and traded online, allowing customers to either save their rewards or sell them to new buyers.

  41. Tomi Engdahl says:

    Why cybercriminals like AI as much as cyberdefenders do

    Artificial technology may escalate a long-running arms race between financial institutions and cybercriminals.

    The technology is helping banks’ cybersecurity teams detect and deal with breaches. Unfortunately, AI also creates new vulnerabilities in systems, since leaving machines in charge opens up opportunities for mistakes and manipulation. Further, AI helps attackers do their jobs more efficiently. For example, in attacks carried out last year, the writers of the Petya malware used AI to identify vulnerabilities and scan millions of ports in seconds to find the holes.

    “AI is a hammer that can be used for good or bad,” said Jim Fox, a partner, principal and cybersecurity and privacy assurance leader at PwC. “And if your adversaries have a hammer, you’d better have one, too.”

    In the right hands, this mighty hammer can do a lot of good. Artificial intelligence software can monitor all network activity and quickly discern odd patterns that could indicate foul play, even if such patterns haven’t been flagged before. It can learn over time to discern truly suspicious behavior from normal patterns.

    “Most of the threats we’re dealing with now aren’t solved by traditional tools like signature-based antivirus [software], or anything that has a signature,” Shaffer said. “The real threat actors know how to get by them. What you’re really interested in is trying to figure out what the smart actors are doing. That’s where machine learning and AI come into play.”

    Shaffer installed an AI-based system from Vectra that watches all network traffic at Greenhill. It spots anomalies that standard intrusion detection software can’t see, he said. (Other companies offering AI-based or enhanced cybersecurity products include IBM, Darktrace, FireEye and McAfee.)

    “That to a lot of systems would look like somebody doing a scan on your network,” Shaffer said

    The dark side of AI

    The U.S. intelligence community has raised a litany of concerns about the use of artificial intelligence: that it increases vulnerabilities to cyberattacks, raises difficulties in attribution, facilitates the advances of foreign weapon and intelligence systems through technology, increases the risks of accidents and substantially increases liability for the private sector, including financial institutions.

    “What the U.S. government has said is if everything is run by machines and there’s no more human intervention, then AI is our total law enforcement, our total gatekeeper of everything,” said Christine Duhaime, an attorney at Duhaime Law, based in Toronto. “So the more we get interconnected — the more there are systems deciding what’s safe, what’s good, what’s bad — the more it’s going to be vulnerable because we’re counting on our systems to be smarter and better than the hacker in another country who wants to do us harm.”

    The government has also said AI could increase the risks of accidents and substantially increase liability for the private sector including financial institutions, she pointed out. In other words, the more systems decide things on their own, the greater the likelihood they’ll make a massive mistake that’s really hard to undo.

    How criminals use AI

    “The reason we have so much financial cybercrime is it’s a very efficient way to steal money with a lower risk of arrest and prosecution,” Grobman said. “The reason cybercriminals don’t knock over banks as much as they use malware or other cyber techniques is because the technology lends itself to providing better outcomes.”

    “We’re looking at: how will bad actors attempt to poison models?” he said. For instance, crooks might introduce specially crafted data into the data sets the models look at that will make the models easier to evade in the future.

    Bad actors are also starting to use AI to automate formerly human tasks, Grobman said. For instance, AI can generate spear phishing emails tailored to an individual through tidbits found through email or social media searches.

    “Instead of requiring humans to tailor content to the individual, they can en masse create content that is tailored to individuals and thus can have a higher victim conversion rate,” he said.

    Grobman has mixed feelings about the government’s warnings about AI.

  42. Tomi Engdahl says:

    Cryptocurrency Mining Post-Bitcoin

    While the age of using your own computer to mine Bitcoin during spare CPU cycles has long passed, average folks aren’t entirely shut out of the cryptocurrency game yet. Luckily, Bitcoin isn’t the only game in town anymore, and with GPUs coming down in price it’s possible to build a mining rig for other currencies like Etherium.

    [Chris]’s build starts with some extruded aluminum and a handful of GPUs. He wanted to build something that didn’t take up too much space in the small apartment.

    Building a Cryptocurrency Mining Rig – Part 1

  43. Tomi Engdahl says:

    Ethereum: GPU Mining Is Back But For How Long?

    By now, everyone and their dog has at least heard of Bitcoin. While no government will accept tax payments in Bitcoin just yet, it’s ridiculously close to being real money. We’ve even paid for pizza delivery in Bitcoin. But it’s not the only cryptocurrency in town.

    Ethereum initially launched in 2015 is an open source, it has been making headway among the 900 or so Bitcoin clones and is the number two cryptocurrency in the world, with only Bitcoin beating it in value. This year alone, the Ether has risen in value by around 4000%, and at time of writing is worth $375 per coin. And while the Bitcoin world is dominated by professional, purpose-built mining rigs, there is still room in the Ethereum ecosystem for the little guy or gal.

    Ethereum is for Hackers

    There may be many factors behind Ethereum’s popularity, however one reason is that the algorithm is designed to be resistant to ASIC mining. Unlike Bitcoin, anyone with a half decent graphics card or decent gaming rig can mine Ether, giving them the chance to make some digital currency. This is largely because mining Ethereum coins requires lots of high-speed memory, which ASICs lack. The algorithm also has built-in ASIC detection and will refuse to mine properly on them.

    Small-scale Bitcoin miners were stung when the mining technology jumped from GPU to ASICs. ASIC-based miners simply outperformed the home gamer, and individuals suddenly discovered that their rigs were not worth much since there was a stampede of people trying to sell off their high-end GPU’s all at once. Some would go on to buy or build an ASIC but the vast majority just stopped mining. They were out of the game they couldn’t compete with ASICs and be profitable since mining in its self uses huge amounts of electricity.

    Economies of scale like those in Bitcoin mining tend to favor a small number of very large players, which is in tension with the distributed nature of cryptocurrencies which relies on consensus to validate transactions.

    Ethereum’s rise to popularity has basically undone Bitcoin’s move to ASICs, at least in the gamer and graphics card markets. Suddenly, used high-end graphics cards are worth something again. And there are effects in new equipment market.

  44. Tomi Engdahl says:

    With Security at the Foundation, Blockchain Can Revolutionize the World

    The Only Way to Ensure That the Blockchain Revolution is Successful is Through Security

    The financial services industry is, in many ways, rather antiquated. You make a purchase using your credit card, the bitstream goes through a number of computers, some even legacy mainframes, and then the settlement is made a few days later. Why shouldn’t this be an instantaneous transaction? You can make a phone call from halfway across the world for free and almost instantly, but you can’t send money in the same way. A need to simplify these transactions has led to solutions like PayPal, Venmo, Square and Apple Pay. I expect further disruption as businesses look to reduce transaction costs and eliminate the need for this form of payment processors and verifiers. While third-party oversight can give the illusion of an added layer of security, in many ways it can actually be an added layer of vulnerability, as it introduces one further middleman that could potentially fall victim to some form of attack. Peer-to-peer transactions eliminate this middleman, lessening the risks associated with having information being passed from one intermediary to another.

    Retail and manufacturing are equally ripe for change. Manufactured goods are notoriously insecure because of susceptibility to counterfeiting. High margin and/or luxury goods, in particular, are targeted because of their high price tags and profit margins. Because of its decentralized nature, blockchain allows for objective verification down to the transistor level. Blockchain can ensure the integrity of the supply chain so that each transistor or component can be easily monitored or recalled, if necessary. Imagine retailers being able to pinpoint the location and manufacturing stage at any time in any part of the world, or consumers having the ability to verify the authenticity of their purchase through a public ledger.

    Then there’s the entertainment industry, a prime example of how blockchain can bring about improvements. Content distribution and purchasing, such as buying a song or movie, triggers a complex series of transactions, resulting in less money for the artist for his or her content. Blockchain could enable artists to become direct distributors and reap the financial benefits of working directly with fans. In addition, with blockchain, entertainment companies can improve copyright tracking, making it more difficult to distribute pirated materials. Piracy drastically reduces the value of the commodity, so implementing a public ledger system grants the ability to track where all the content originates from and ensure its value is maintained.

    Financial services, manufacturing and entertainment are just three examples out of many. Almost every industry can improve efficiencies with blockchain. But what will make blockchain a success is ultimately security. If this technology is going to be widely implemented into common transactions, customer reassurance of security becomes imperative. Security technologies can no longer remain an afterthought and not only will they have to be embedded into everything we do but also impact everything we do.

  45. Tomi Engdahl says:

    Paris Hilton inflates crypto bubble some more, backs Initial Coin Offering
    Meanwhile, China says of ICOs: That’s hot, we mean, er, banned

    Just in case we were in any doubt that we were in a crypto bubble, Paris Hilton has announced she will back an Initial Coin Offering venture.

    On Sunday, the famous “heir-head” tweeted she was participating in the upcoming “LydianCoin” ICO.

    In the much-hyped cryptocurrency startup market, ICOs allow startups to to bypass the regulated capital-raising process required by venture capitalists or banks, with a percentage of the cryptocurrency sold to early backers of the project in exchange for legal tender or other cryptocurrencies, such as Bitcoin.

    By sheer coincidence, China has today banned ICOs, saying they have “seriously disrupted the economic and financial order” and constituted “illegal fundraising”.

  46. Tomi Engdahl says:

    China bans crypto-currency fundraising schemes
    Bitcoin, Ethereum values dip after ‘Initial Coin Offerings’ ruled dangerously disruptive

    Digital currencies Bitcoin and Ethereum have slipped after the Chinese government banned Initial Coin Offerings, a tool that sees equities offerings bid in cryptocurrencies instead of fiat currencies, a share funding mechanism.

    The Peoples’ Bank of China’s joint announcement with six other agencies doesn’t translate smoothly, but the gist is clear: token-based Initial Coin Offerings (ICOs) that see rights to cryptocurrency issued in return for scrip are regarded as a threat to financial order and stability.

    The NIFA report also raises concerns about fraud and unlicensed trading in the sector, along with “illegal securities, illegal fund-raising and other acts”.

    The group is also concerned that organisations taking part in ICOs aren’t meeting the disclosure requirements associated with stock market listings.

  47. Tomi Engdahl says:

    ACM Queue:
    Most of Bitcoin’s components had been described in the 80s and 90s; Satoshi Nakamoto’s true genius was in assembling them to work in the real world

    Bitcoin’s Academic Pedigree
    The concept of cryptocurrencies is built from forgotten ideas in research literature.

  48. Tomi Engdahl says:

    KFC in China tests letting people pay by smiling
    Pay using your face and cellphone number

    Alipay has launched a new way to pay for your KFC in China — by smiling. So far, the facial payment system is only available at a single KFC in Hangzhou, China. The company behind the technology, Ant Financial, an Alibaba subsidiary, says its Smile to Pay technology needs about one to two seconds of facial scanning with a 3D camera and a “live-ness detection algorithm” to check the identity of the person paying, who must also enter their mobile phone number to help guard against fraud. A beta version of Smile to Pay was introduced in 2015 by Jack Ma the founder of Alibaba.

    “Taking the facial-recognition payment technology offline was no easy task,” said Jidong Chen, head of biometric identification technology at Ant Financial

  49. Tomi Engdahl says:

    Robert Shiller wrote the book on bubbles. He says “the best example right now is bitcoin.”

    Yale economics professor Robert Shiller won the Nobel prize for his work on bubbles. He wrote a seminal book on speculative manias, Irrational Exuberance, a deep analysis of the dramas over the centuries when otherwise sane people drove prices for tulips, stocks, and houses to inexplicable heights.

    Shiller developed some of the tools that are considered vital for taking a sober look at markets. He helped create indexes for measuring real estate prices and his stock market valuation indicator, the cyclically adjusted price-earnings ratio, or CAPE ratio, is seen as one of the best forecasting models for stock returns.

    As Shiller sees it, “big things happen if someone invents the right story and promulgates it.”

    Quartz: What are the best examples now of irrational exuberance or speculative bubbles?

    Shiller: The best example right now is bitcoin. And I think that has to do with the motivating quality of the bitcoin story. And I’ve seen it in my students at Yale. You start talking about bitcoin and they’re excited! And I think, what’s so exciting? You have to think like humanities people. What is this bitcoin story?

    It starts with Satoshi Nakamoto—remember him? The mysterious figure who may or may not be real. He’s never been found. That has a nice mystery quality to it. And then he has this clever idea about encryption and blockchain and public ledgers, and somehow the idea is so powerful that governments can’t even stop it. You can’t regulate this. It kind of fits in with the angst of this time in history.

    Somehow bitcoin fits into that and it gives a sense of empowerment: I understand what’s happening! I can speculate and I can be rich from understanding this! That kind of is a solution to the fundamental angst.

    So I’m trying to deconstruct the bitcoin story. Big things happen if someone invents the right story and promulgates it.

    So is bitcoin a bubble, or the biggest bubble?

    I don’t know how to quantify that. But I have a sense that something is exciting to you. Another thing that is exciting to people now is Donald J. Trump. You may have heard of this guy.

    Something you’ve written about is the role of media in speculative bubbles. In the past, you didn’t seem convinced that the internet has boosted the media’s ability to do that. Has that changed?

    The big thing that happened wasn’t the internet. It was the printing press, Gutenberg in the 1400s. It didn’t really get going until the 1600s. It was then that we started seeing bubbles.

    The problem with things going viral is that there has to be some transmission that’s adequate to the job. You can still go viral without newspapers, but it’s harder. There were celebrities and international stars, like Homer, who wrote the Iliad and the Odyssey. He did that by traveling from town and town and reciting his books. And it worked! He’s still going, long after he died.


Leave a Comment

Your email address will not be published. Required fields are marked *