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A New Trading Simulation Platform Comes Up With a Gamification Concept

Betting on assets without owning it, in fact, seems to be a well-known model, this idea is used by Forex-like brokers and being successfully implemented to the crypto market as well. Although, the betting process may even get more entertaining if you add a contest element. And this is exactly what a new Blockchain project, FundFantasy, offers on its platform, which allows investors to become players and compete with other players by making the best investing portfolio and winning a money prize.

Invest for fun, play for profit

According to the white paper, FundFantasy is currently beta-testing its own Financial Fantasy Contest Platform, which is “simulating investments in financial assets in a fun, secure, and responsible environment, free of the ​conflicts ​of ​interest ​which ​plague the online trading market.” According to the company’s data, over 75 percent of the test users expressed an interest in playing again, the team states. Following the project’s roadmap, the official launch of the main version of the platform is planned for Q3 2018.

The FundFantasy’s hybrid platform of ‘gaming while trading’ has drawn its inspiration from the principle of fantasy sports, an online sports segment that is getting much popular nowadays. For instance, there are approximately 60 mln people in the US and Canada, that play some form of online fantasy sports, according to the recent report by Fantasy Sports Trade Association. In a nutshell, players bet on their own virtual teams, receive points while playing and compete for a virtual or real money prize.

The similar principle of online competition is used in the FundFantasy platform, which offers a simplified version of trading based on the Ethereum Blockchain and smart contracts. The platform will allow users to open and organize their own contests, invite their friends and even earn a percentage of the fee that is charged from the contests prize pool.

The best portfolio to win

According to FundFantasy, the platform acts as a complete solution where users can safely bet on a range of assets without the risk of losing a fortune, while still keeping the possibility of making large gains. Users can create and submit portfolio from four asset classes: cryptocurrencies, fiat currencies, commodities and stocks, but a portfolio may have its own specifications.

The FundFantasy team states that the investing simulator is based on real market data and pays out crypto-prizes. “Our platform gives users a chance to win large prizes while keeping expenses fixed regardless of the market’s volatility or black-swan events. The required “capital” can be as low as zero, as we will also feature free daily contests carrying cryptocurrency prizes,” says the white paper.

The FundFantasy crowdsale  starts on Feb. 25. Purchasers of tokens called FUNDZ during the sale will enjoy a bonus on their token purchase, with 25 percent during the first eight hours, 15 percent during the next 24 hours, and 10 percent during the rest of the first week.

The FundFantasy team has also opted to airdrop any unsold tokens to investors after the ICO to protect the investors in the event of low selling or ETH/Dollar fluctuations, the team claims.

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

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How Will a $100 Mln Grant Help Ethereum Scale?

On Feb. 16, six large-scale Blockchain projects OmiseGo, Cosmos, Golem, Maker and Raiden, that have completed successful multi-million dollar initial coin offerings (ICOs) last year, along with Japanese venture capital firm Global Brain have created the Ethereum Community Fund (ECF), to fund projects and businesses within the Ethereum ecosystem.

The ECF will begin with $100 mln, likely raised by the six Blockchain projects. Some members of the Ethereum Foundation including Ethereum creator Vitalik Buterin plan to advise the fund. Buterin told TechCrunch:

“Ethereum has grown beyond my expectations over the last few years, but the work is clearly not finished. Delivering value that matches the hype should be the mantra of 2018; efforts such as the ECF which help organize the development of the ecosystem are going to help to make that possible.”

Buterin’s personal goal of funding open-source projects

In September 2017, Buterin revealed that his advisor shares from $1.8 bln project OmiseGo and $370 mln decentralized cryptocurrency exchange Kyber Network will be allocated in a private fund to finance open-source projects building innovative technologies such as scaling solutions for the Ethereum Blockchain network.

Buterin emphasized that he will no longer advise any other Blockchain project apart from OmiseGo and Kyber Network and that all of the incentives he received from the two Blockchain projects will be used to improve the Ethereum protocol. At the time, Buterin said:

“I’m announcing that 100% of my OmiseGo + Kyber Network advisor shares will be either donated to charity (AMF, GiveD, SENS etc) or used to privately fund Ethereum second-layer infrastructure (state channels, multisig wallets etc) or some combination of the two.”

But, Buterin noted that all projects eligible to receive financing from his private fund must be completely open-source and have no profit schemes in place.

“Must be 100 percent open source, no baked-in profit scheme (including ICO token), must be good,” noted Buterin, emphasizing that open-source projects, especially those focusing on Ethereum scalability, are struggling to obtain funding.

“Open source infrastructure projects currently are struggling to get funding without the ICO+token route; hopefully this can help.”

Given Buterin’s support towards open-source projects, the same rule of only funding open-source projects used by his private fund will likely be applied to the $100 mln ECF. TechCrunch reported that grants will be in the range of $50,000 to $500,000, and some projects may even receive additional funding to complete long-term development of technologies and solutions. Only open-source projects with no profit schemes will most likely be eligible for the grants.

Lack of developers working on scaling

Previously, Augur co-founder and cryptocurrency venture capital firm chief investment officer Joey Krug publicly expressed his concerns regarding the lack of developers and open-source projects working on scaling solutions to enhance the Ethereum network. Krug  said:

“Ethereum really needs more developers on problems like sharding, proof of stake, and plasma, right now there simply aren’t enough. It should also hire some more operations people to help orchestrate it all, for instance, Solidity is just now being formally audited.”

Without open-source scaling projects, the Ethereum network will continue to struggle with scaling issues, and the network is currently processing just over a million transactions per day. Coinbase co-founder Fred Ehrsam also noted that the Ethereum network would have to improve by 100-fold in order to support decentralized applications with millions of users.

Scaling solutions needed to address popular Dapps

Over the past few months, the entrance of successful decentralized applications such as CryptoKitties, CryptoKribs, Bancor and EtherCraft had led the Ethereum Blockchain network to struggle with scaling issues. Because decentralized applications like CryptoKitties can severely congest the Ethereum network by processing several transactions every time an order is executed, an efficient scaling solution is necessary to address the growing demand.

Dapp Radar

Image source: Dappradar.com

The development of scaling solutions such as Sharding and Plasma that can expand the transaction capacity of the Ethereum network can be sped up through funds and grant systems like ECF, and with that, Ethereum could evolve into a better platform for decentralized applications.

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Contentious Ethereum Fund Recovery Proposal Continues To Spark Debate

The Ethereum Improvement Proposal (EIP) that led to the resignation of an EIP editor over his personal legal concerns has been closed, but an identical proposal has been reopened on Github to relatively negative fanfare.

The original EIP proposal #867 was introduced by Musiconomi developer Dan Phifer as an option for how to more easily modify the Ethereum (ETH) Blockchain to redistribute address balances in the circumstance of lost funds.

EIP editor Yoichi Hirai had criticized the draft for what he saw as its violation of a Japanese law about the creation of electromagnetic records, as well as it being “at odds with Ethereum philosophy.”

When the original proposal was closed, the Ethereum Reddit community responded positively in a thread that congratulated the community, one user calling it a “big win for the Ethereum community and network.”

Comments on Github on the opened version of proposal #867 showed the polarity of users’ views on standardizing lost fund recovery.

User oxidizer called the proposal a “Trojan horse for Ethereum,” writing that “adding a recovery mechanism, no matter the amount of refinement and “safeguards” put in place, weakens the protocol.”

User Aribo went into more detail about the functions of the Ethereum philosophy, stating that fund recovery is not the responsibility of the system’s developers:

“Instilling the recovery of funds as a necessary function of the system is IMO misunderstanding the function of the system. Ethereum is not a bank or a private company that has profits/losses and investments. If someone loses money in the economic system created within Ethereum is at its own peril, and it never should be the function and responsibility of the system, and thus its developers, to allow the recovery of these funds and, even less, build the rules/standards for this to happen.”

Implementing a standardized method for returning lost or stolen crypto has long been a contentious point of debate in the crypto community, for some view any such action as going against the values of Blockchain’s supposedly inherently immutable nature.

The Ethereum community has already been divided once over such a dispute, when a hard fork was implemented in the aftermath of the DAO hack, leading to the split between Ethereum (ETH) and Ethereum Classic (ETC) — with ETC maintaining the Blockchain with the stolen money still with the hackers.

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Vitalik Buterin To Advise New ‘Ethereum Community Fund’ Sponsoring ETH Infrastructure

Several large Ethereum-based projects have come together to create the Ethereum Community Fund (EFC), a vehicle to connect and fund the growth of Ethereum (ETH) infrastructure, according to the EFC website.

The founding members of the EFC are OmiseGo, Cosmos, Golem, Maker, Global Brain Blockchain Labs, and Raiden.

Ethereum co-founder Vitalik Buterin, Ethereum Foundation executive director Ayako Miyaguchi, and OmiseGo managing director Vansa Chatikavanij will join the project as advisors, according to Jun Hasegawa’s, the founder of OmiseGO, announcement on Medium.

The beginning basis of the EFC is the Infrastructure Grant program, which the website describes as a

“Permanent financial endowment to support and aid projects in building crucial open-source infrastructure, tooling, and applications.”

Jun Hasegawa tweeted at the participating members of the fund yesterday in celebration:

The EFC is not the first Ethereum-based global initiative created to develop Ethereum infrastructure. The Enterprise Ethereum Alliance (EEA) launched in Feb. 2017 is the world’s largest open-source Blockchain initiative.

It is currently partnered with more than 200 organizations, including big financial institutions like  JPMorgan, Santander, and Mastercard, Intel. The non-profit’s aim is to bring privacy, scalability, and security to developing Ether and the Ethereum Blockchain.

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Ethereum Code Editor Resigns Over Legal Concerns For Ledger Amendment Proposal

Ethereum code editor Yoichi Hirai has resigned from his position following personal concerns that an Ethereum Improvement Proposal (EIP) over a standardized format for lost fund recovery would potentially violate Japanese law.

Hirai both tweeted his resignation as well as posted a more dramatic explanation of his reasons for resigning on Github:

“My blood pressure is higher since I found this draft. I don’t sleep well. My family accuses me of mental absence. I believe these are signs that my abilities are not ready for the task of the EIP editorship. I resign from the post of an EIP editor.”

Musiconomi developer Dan Phifer and two developers from startup TapTrust introduced said proposal, which seeks to create a solution method for a simpler way to amend the Ethereum blockchain that would allow to redistribute address balances in the case of lost funds.

A hack last June on the Parity Ethereum client caused Musiconomi to lose their ether raised by crowdfunding when Parity froze their multi-sig wallet. Phifer’s proposal would allow such lost funds on the Ethereum platform to be returned in the case of a similar future hack.

Hirai’s reportedly main problem with the proposal is what he sees as its conflict with a Japanese penal code on the “Unauthorized Creation of Electromagnetic Records.” He writes on Github that he doesn’t think that “anybody has the authority to make an irregular state change”, because he doesn’t believe that Ethereum users know about or authorize the EIP process, and thus doesn’t want the non-democratically chosen EIP leaders to make these kind of rules for Ethereum users.

Hirai adds that he thinks the proposal is “at odds with the Ethereum philosophy”, because Ethereum was made to avoid “single points of failure and the need of trust”. In a later comment, Hirai amended that he could ignore his understanding of the Ethereum philosophy, but that he can’t ignore violations of the penal code.

Software engineer Afri Schoedon, who also works in community management at Ethereum and technical communication at Parity, has come out strongly in favor of Phifer’s proposal. In response to Hirai’s negative comments about the proposal on Github, Schoedon tweeted asking Hirai to step down as an EIP editor:

Hirai responded directly to the call for resignation, tweeting that stepping down would signal that he allows other people to ignore the penal code and thus break the law. However, Hirai did resign about 10 hours after that tweet.

Hirai’s resignation over this proposal, even though he cites his personal legal responsibility as his impetus, brings up the question of whether Blockchain should be modifiable in the case of hacks or errors that lead to a loss of user funds.

The recent hack of Nano from the BitGrail exchange caused a furor in the crypto world when it came out that Bitgrail’s owner had allegedly asked for the altcoin’s ledger to be altered to cover the losses.

The largest example of conflict over the nature of Blockchain’s ability to be edited was the aftermath of the DAO hack, when stolen funds were moved back to their rightful accounts through a hard fork that led to the split between Ethereum (ETH) and Ethereum Classic (ETC). Ethereum Classic is the original Blockchain where the stolen money remained with the hackers.

Vitalik Buterin, co-founder of Ethereum, had tweeted on Feb. 14 in response to a @whalepool tweet criticizing him for his decision to hard fork Ethereum, “doing rescue forks in exceptional circumstances can be a great choice for nascent early-stage blockchains.”

In response to Buterin’s tweet, Greg Maxwell, former Bitcoin developer, posted on Reddit that Ethereum’s operators are missing the main point of the hard fork debate:

“The point they’re missing? No one should have that power. If there is even a choice to make the system has already failed.”

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Wallet Wars? MyEtherWallet Developer Goes Solo To Launch MyCrypto

Popular Ethereum wallet interface MyEtherWallet (MEW) has released a unexpected alternative product, MyCrypto.com, one of MEW’s original developers announced in a blog post Feb. 9.

MEW has become one of the most popular Ethereum and ERC20 token storage management tools over the past year, and will continue to exist along with a new project, which has an almost identical interface.

In the blog post, one of MEW’s original developers Taylor Monahan gave a brief history of the project and the impetus behind her creating MyCrypto, while remaining silent on relations between herself and her fellow co-developer of MEW, known as Kvhnuke.

“MyEtherWallet LLC was sufficient for the early stages of growth. MyCrypto is designed with next-level scaling in mind from the beginning,” Monahan explained in the post, adding she had spent nine months assembling a team to oversee all operations. She also added:

“Kvhnuke remains in control of the MEW github repository, the MEW domain, the AWS instances, and the MyEtherWallet social media accounts.”

MEW’s structure has allowed it to avoid the common pitfalls ‘true’ wallet providers have struggled with increasingly as cryptocurrency has gained value and an influx of new users.

Ostensibly designed to serve even more users via a similar setup, MyCrypto will enter public beta testing in the near future, Monahan nonetheless stating she was “terrified” about the road ahead. She continued:

“I was terrified — am terrified — at the potential harm this change will have on myself, the team, and/or the Ethereum community but ultimately, the risks created by continuing down the road we were on are greater than the risks of splitting to a new brand, new company, new name, and new domain. While contemplating this decision, I began to see that my inaction would be the only thing that guaranteed my failure.”

Online, the circumstances surrounding the changes continue to cause suspicion and confusion among users.

While MEW has not yet published any comment about the new brand, curious statements about what staff describe as an “unlawful social media account switch” on Twitter have coincided with the release of the MyCrypto news.

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The Ethereumization Of Wall Street Is Inevitable: Expert Take

In our Expert Takes, opinion leaders from inside and outside the crypto industry express their views, share their experience and give professional advice. Expert Takes cover everything from Blockchain technology and ICO funding to taxation, regulation and cryptocurrency adoption by different sectors of the economy.

If you would like to contribute an Expert Take, please email your ideas and CV to [email protected].

The mainstream media has become obsessed with the crypto frenzy with the main focus on Bitcoin price. By treating cryptocurrencies like any other asset class or just as a fad, journalists are missing the elephant in the room: investment banks are about to be disrupted big time.

More than 1,500 cryptocurrencies already

These days it is much easier to raise funds through an ICO than through traditional venture capital funds. As a result, there are already more than 1,500 cryptocurrencies out there. Just a few years ago, it would have been unthinkable for a small company with just a handful of employees to raise millions of dollars on the back of a simple white paper. Now, startups can do it with just an exciting concept and a white paper of a few dozen pages (sometimes less). Thanks to the ERC20 standard that uses the existing Ethereum Blockchain, anyone can launch a token at a limited cost without having to worry about building a Blockchain infrastructure from scratch.

Obviously,  Ethereum can be taken by another, more advanced platform. But for now, it makes more than 80 percent of the market. Out of the 580 tokens out there, 475 are on the Ethereum Blockchain.

Number of tokens per platform

Source: Coinmarketcap.com, February 2, 2018

The genius of the Ethereum Blockchain was making fundraising so incredibly easy: all you have to do is create a smart contract to do an ICO. Every time ETH (Ethereum tokens) are sent to the contract address, the contract issues newly minted tokens that are automatically sent back to the sender. Wall Street should be terrified because Ethereum has just made investment banks redundant.

Book building (the process of lining up investors to buy security to be issued) has historically been very juicy for Wall Street, and investment banks acted as intermediaries between asset managers and companies or governments wishing to raise debt (bond offerings) or equity (IPOs). Until recently there was no way to bypass them. Now there is. Banks have not started feeling the pain yet, but venture capitalists have. Nowadays, it is not uncommon to see them in the list of pre-ICO investors (see the upcoming Telegram ICO). VCs have to adapt or be history, and Wall Street is next.

Market Capitalization of tokens per platform

Source: Coinmarketcap.com, February 2, 2018

Beyond Uberization

Initially, I entitled this post “The Uberization of Wall Street,”  but then realized that what Uber is doing is what banks are already doing: connecting supply (of capital) with demand (investors) and taking a hefty fee in the middle. Uber simply disrupted a sector that had not evolved ever since it had been invented where supply and demand were just incredibly inefficiently connected. Banks are already connecting supply and demand, but with the Blockchain technology, they are not needed anymore, at least not for what they are doing now.

How Ethereum can disrupt the bond market

Let’s have a look at one of the most lucrative businesses on Wall Street: the issuance of corporate bonds. Last year, companies around the world issued more than $3.5 tln worth of bonds. The way this currently works is the following: a company mandates an investment bank that is going to sell the bond to be issued to pension funds and asset managers. Investment banks control this market because they have access to these funds managers. But as ICOs have successfully demonstrated, you do not need such intermediaries anymore, and companies could reach investors directly by issuing smart bonds. How could this work in practice?

The issuance

  1. Company V creates a smart contract on the Ethereum Blockchain that replicates how a bond works (i.e., payment of coupons semi-annually and repayment of principal at maturity).
  2. Investors who wish to participate in the IBO (Initial Bond Offering) send ETH to the contract address and specify the lowest coupon they are willing to receive.
  3. Once the IBO is over, the smart contract automatically builds the order book with investors willing to accept the lowest coupon first, the marginal investor needed to fill the order book sets the coupon for a bond.
  4. All the investors who did not make it to the final order book automatically get back the ETH they had sent to the smart contract.

Debt servicing

  1. Every six months, investors receive the coupon (interest) as set in the original smart contract.
  • If company V does not want to take the risk that the value of Ethereum increases substantially, payments can be made in ETH but adjusted with the exchange rate of Ethereum with the fiat currency of the bond. Before payment of the coupon, the smart contract will get the exchange rate between the fiat currency and Ethereum from an oracle (data provider) and pay the right amount of ETH such that the bond replicates precisely how a fiat currency bond would have behaved.
  • Alternatively, payments of coupons and repayment of principal can be made directly in tokens backed by fiat currency and redeemable with a reputable, audited financial institution.

    2. At maturity of the bond, the smart contract pays out both the coupon and the principal (either the same amount of ETH or the same amount of US dollar paid in Ether or fiat-backed tokens).

Mechanics of a smart bond

How many human actions were required to run all this process? Zero. The only thing that needs to be done is to write the smart contract. But just like with the ERC20 standard, you can expect standardized smart bond contracts to be available soon. A well reviewed and audited smart bond contract would mitigate the risk of bugs in the smart contract.

Huge potential for smart bonds

The way the bond market currently works keeps many investors out. Buying a single piece of a bond often requires from $5,000 to $200,000. Hence, many investors are left with no choice but to buy mutual funds or ETFs that include a basket of bonds. With a smart bond, anyone could invest as little as $10 and get a piece of the bond. Diaspora investors who want to invest in their home countries will be able to do so, small and medium enterprises will have access to new financing options beyond what commercial banks can offer them and micro-bonds could also be issued, all at close to zero cost. ICOs were just the beginning, the real disruption of financial markets is yet to come.

Disclaimer: The views and interpretations in this article are those of the author and do not necessarily represent the views of Cointelegraph.com and the World Bank.

Vincent Launay is a finance specialist at the World Bank in Washington DC. He holds an MSc in Finance from HEC Paris and a CFA charter.

 

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UNICEF Asks PC Gamers To Mine Ethereum And Donate To Syrian Children

UNICEF (United Nations International Children’s Emergency Fund) has started a new kind of charity drive for Syrian children, asking PC gamers to use their computers to mine Ethereum and donate their earnings.

The two-month long charity campaign that began Feb. 2, dubbed Game Chaingers, is aimed at gamers that use high level graphics cards capable of cryptocurrency mining, turning the cards into “humanitarian tool[s]:”

“Today, humanitarian collections often solicit the same people with the same methods, but cryptocurrencies and their revolutionary approach are an opportunity to raise funds differently. Have you heard of Bitcoin? The Ethereum is the same, except that you can more easily ‘mine’ the Ethereum coins via your computer and that money will go directly into the UNICEF wallet.”

Donations work in the following way: when participating gamers take a break from their computers or go to sleep, they can turn on UNICEF’s Ethereum mining program, thus donating without giving away anything but access to their computer’s processing power.

The website reads:

“Through the use of mining we create an opportunity for those who can not give or have never had the opportunity to do so.”

Game Chaingers’s statistics currently shows a total of 360 contributors, 44 of which are currently active at press time, that have mined almost 900 euros in donations for humanitarian aid for Syrian children.

According to the website’s project info, 8.3 mln children in Syria and bordering countries are in need of vital emergency help. UNICEF will use the donated Ethereum to give these children access to water, education, and health and hygiene services.

This isn’t the first time that UNICEF has thought to mix cryptocurrencies and humanitarian aid.

In January 2017, UNICEF presented “Donercoin” at London Blockchain Week, a Blockchain-based program aimed at creating transparency in global aid by digitizing donations.

More recently, in August 2017, UNICEF Ventures, a branch of the main organization, began testing Ethereum-based smart contracts also to improve the transparency of asset transfers.

Pineapple Fund, a Bitcoin-only charity founded by an anonymous donor, has also made large donations in Bitcoin to a number of philanthropic organizations in the past few months. According to their website, the Fund plans to give out a total of $86 mln to charity.

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Vitalik Buterin Donates $2.4 Million In Ether To Anti-Aging Research

The SENS Research Foundation, a charity funding research for treating-age related diseases, has received a $2.4 million Ether donation from Ethereum co-founder Vitalik Buterin, according to a press release on the charity’s website Friday, Feb. 1.

The foundation was co-founded in 2009 by Aubrey de Grey, a gerontologist who is researching rejuvenative therapies to extend people’s biological ages, hoping to permit humans to live much longer than ever before.

Buterin, who is quoted in the press release as a “fan of Aubrey’s work since [he] first read Ending Aging [de Grey’s book] as a teenager”, also said:

“I am happy to have been blessed with the opportunity to personally support SENS’s efforts. Their focus on creating solutions to the diseases of aging, one of the greatest problems facing humanity, is very much in line with my goal to positively impact the lives of millions of people around the world.”

The SENS Research Foundation has already received two large donations totaling $2 million in Bitcoin (BTC) from the anonymous Bitcoin-only charity fund, Pineapple Fund — the first million dollars in December 2017 and another $1 million in BTC on Feb. 2.

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ICOs – Big Target For Hackers, E&Y Report

Thanks to Blockchain applications like Ethereum, initial coin offerings have become part and parcel of the cryptocurrency world.

As businesses integrate innovative ideas with Blockchain technology, they’ve been able to raise a large amount of capital through initial coin offerings (ICO) – much like companies that list themselves on stock exchanges in an initial public offering.

The popularity of cryptocurrencies has seen many investors look for the next best thing after Bitcoin and Ethereum prices skyrocketed over the past 12 months.

This has led to a number of ICOs receiving massive capital investments for their projects. But where there is wealth, there is bound to criminal interest – as a recent report from Ernst and Young suggests.

$400 mln in two years

According to Fortune, up to 10 percent of all the money raised by ICOs between 2015 and 2017 was either lost in the crypto ether or stolen in hacks. Putting a number on that amount, we’re talking $400 mln stolen by hackers.

In their haste to attract investors, companies launching Blockchain services often overlook the necessary security precautions needed to protect themselves and investors buying their tokens.

Ernst and Youngs’ report states that over $3.7 bln was raised by 372 ICOs during that time period. That is a massive amount of money for ‘start-up’ offerings, and it’s hardly surprising that hackers are looking for soft targets.

The report states that large ICOs are deemed to be soft targets for seasoned hackers:

“Hackers are attracted by the rush, absence of a centralized authority, Blockchain transaction irreversibility and information chaos. Project founders focus on attracting investors and security is often not prioritized. Hackers successfully take advantage— the more hyped and large-scale the ICO, the more attractive it is for attacks.”

You don’t need to scour the Internet to find stories of ICOs being pinched by hackers. A look back at Cointelegraph’s archives provides many examples.

As reported in August 2017, cybercrimes rose in tandem with the popularity of Ethereum, thanks to its smart contract system which allows developers to create their own decentralized applications on the Ethereum Blockchain.

These hacks have a compounding effect – as Ethereum’s Blockchain bears the brunt of the traffic from an ICO and even more so if there is a stress event around a hack as users look to get their funds out of the project.

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Enterprise Ethereum Alliance Appoints First Executive Director

The Enterprise Ethereum Alliance (EEA) has appointed Ron Resnick, the former president and chairman of the Airfuel Alliance, as the first executive director, according to a Jan. 17 press release.

Resnick also served as the President and Chairman of the WiMAX Forum, working with Intel’s Broadband Wireless Business on the launch of one of the first 4G broadband modems.

Chairman of the EEA board Julio Faura stated today in a press release:

“4G wireless broadband changed the world. We believe Blockchains will have a similar impact on society. Ron’s task as our first Executive Director is to build-out the organization, engage with members and foster the continued development of technical content.”

The EEA, which was launched in February 2017, was established to bring privacy, scalability and security to the development of Ether and the whole Ethereum Blockchain.

Resnick, who will host an EEA event at the World Economic Forum in Davos, Switzerland on Jan. 23, said in the press release:

“My focus is to drive the further development of Ethereum-based technology best practices, open standards and open-source reference architectures to evolve Ethereum into an enterprise-grade technology.”

Since February, the alliance has grown to 200 members, making it the largest open-source Blockchain initiative. Its member list includes founding members JPMorgan and Santander, newer members like Mastercard, Intel and Microsoft, and a number of Ether investors and Blockchain startups.

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Smart Contracts Are Taking Over Functions of Lawyers: Expert Blog

Expert Blog is Cointelegraph’s new series of articles by crypto industry leaders. It covers everything from Blockchain technology and cryptocurrencies to ICO regulation and investment analysis. If you want to become our guest author and get published on Cointelegraph, please send us an email at [email protected].

After reading about how a partner in one of the biggest and most prestigious international law firms was busted by an undercover US Federal Bureau of Investigations (FBI) agent for trying to garner Bitcoins in a corrupt transaction from a Silicon Valley tech company, it’s likely you won’t feel sad about smart contracts beginning to take over certain functions of lawyers. You might even secretly thank Ethererum’s co-inventor Vitalik Buterin, for it.   

“My life is over”

A calm lobby of Hilton Garden Hill in Cupertino, CA was transformed into a crime scene exactly at 9:55:10 am on Jan. 31, 2017 when a man, shrieked “my life is over” as he was being handcuffed and arrested by FBI agent William Scanlon. The arrested man was using a fake name “Dan” and wearing an obvious wig to disguise his identity.  Unfortunately, his cover was blown when the Scanlon, who worked at FBI’s public corruption division, identified him in his report as no other than Jeffrey Wertkin, a partner at Akin Gump Strauss Hauer & Feld who was an ex-US Department of Justice (DOJ) prosecutor.

Apparently, Wertkin, while still working at the DOJ in Washington DC, stole whistleblower complaints brought against a Silicon Valley tech company, which was sealed from public view.   To give the tech company a leg up in the government’s ongoing investigation and to obstruct justice, Wertkin tried selling these sealed whistleblower complaints against the tech company, in exchange for 310 “untraceable” Bitcoins worth $310,000, but was instead busted by the FBI.

Wertkin’s dreams of becoming an “undetectable” Bitcoin millionaire was shattered on Nov. 29, 2017 — when Bitcoin was trading at $7,000 – and when he pleaded guilty to two charges of obstruction of justice and one count of transporting stolen goods across state lines. DOJ prosecutors said they would seek 30 to 37 months of prison time when he’s sentenced on March 14, 2018. The law firm has since fired Wertkin.

Blockchain to replace functions of lawyer

It should be noted that Bitcoins are ill-suited for corrupt transactions. Because, Bitcoin transactions are tracked and made public using Blockchain, which is a digital ledger distributed over a network of computers rather than located on a single or multiple servers. Transactions made in Bitcoins are recorded chronologically and publicly. It is almost impossible to alter the historical records on a Blockchain and more importantly, access to a Blockchain can also be restricted.   

Buterin explained, “All transactions under Blockchain come with auditable trails of cryptographic proofs.  Rather than simply hoping that the parties we interact with behave honorably, we are building Blockchains that inherently build the properties in the system, in such a way that they will keep functioning with the guarantees that we expect, even if many of the actors involved are corrupt.”

The Blockchain’s main disruptive element in today’s commercial and economic ecosystem is its ability to eliminate the necessity to trust intermediaries to certify a transaction. This feature lends Ethereum Blockchain well to being used to create smart contracts.

Smart contracts are computer protocols, or algorithms, which can verify the negotiation process or performance of contracts–to the extent, legal relationships can be reduced neatly into code-whereby clauses are automatically enforced once the pre-programmed conditions are satisfied. They are coded instructions, which execute on the occurrence of an event.

“‘Smart contracts’ – can automatically move digital assets, including ‘contracts’ according to arbitrary pre-specified rules, simply by writing up the logic in a few lines of code,” explained Buterin.

Lawyers realize that smart contract technology will be an unstoppable disruptive force for the profession.  

For example, Blockchain’s ledger with the inalterability of the data, mixed with smart contracts could help clients create an immutable, time-stamped and legally-defensible record of when a trademark or copyright is first used. Thus, should a client pursue registration of said mark, the evidence would be there to leverage the option in their favor. The Blockchain is the perfect mechanism for achieving these goals because by nature records in a Blockchain network are time-stamped, secured and scalable.

On Jan. 9, 2018 Kodak, a camera manufacturer, announced the launch of its KodakCoin cryptocurrency utilizing Blockchain security technology, a digital ledger of rights ownership for photographers to register both new and archive work that they can then license within the platform aimed at enabling image rights management for photographers. Using the Blockchain for copyright registration and tracking makes sense, so the company’s stock price shot up 89 percent upon this announcement.

“With KodakCoin, participating photographers are invited to take part in a new economy for photography, receive payment for licensing their work immediately upon sale and for both professional and amateur photographers, sell their work confidently on a secure Blockchain platform,” Kodak said.

The camera company’s “photo-centric” cryptocurrency is being launched in an ICO to accredited investors who meet the financial threshold of– either $200,000 in income or $1 mln of net worth – from the US, UK, Canada and other select countries under a licensing partnership with Wenn Digital. It will also involve a Blockchain-backed image rights management platform called KodakOne.

On a separate note, Kodak on the same day also announced a new Bitcoin mining rig leasing business line called “KashMiner.” Users of KodakCoin and KashMiner are urged to take into consideration the US as well as cross-border tax implications when evaluating the overall economics of transactions utilizing Kodak’s new virtual currency based products.

Selva Ozelli, Esq., CPA is an international tax attorney and CPA who frequently writes about tax, legal and accounting issues for Tax Notes, Bloomberg BNA, other publications and the OECD.

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Exclusive: MyEtherWallet Сlaims Hacking Rumors Are ‘Stupid Lie’

Cryptocurrency wallet MyEtherWallet (MEW) has told Cointelegraph that rumors about it being hacked are “FUD” and “a stupid lie.”

In a private message today, Jan. 9, the wallet provider categorically denied accusations circling on social media that hackers had gained access to their DNS, creating a phishing scam to gather login data.

The rumors that MEW had been hacked appeared to stem from developers of altcoin Ethereum Blue (BLUE) on Twitter, who posted a string of warnings about the DNS compromise, along with advice not to use MEW.

Referring to BLUE’s tweets, MEW told Cointelegraph:

“MEW is not compromised. They [BLUE] are either maliciously spreading FUD to harm others, maliciously spreading FUD to boost their own coin’s price, or just so incompetent and were confused. Regardless, it’s a stupid lie.”

Several of the tweets from BLUE today have already been deleted, but a screenshot of the original tweets was published in a reddit post, which has since marked the story as “fake.”

A reddit user who allegedly works for MEW replied to the post, stating that the wallet was “not aware of any compromises” and reminded users that they can always access the service offline.

BLUE - Trade BLUE on CoinExchange

Official tweets from MEW several hours after the BLUE rumors had circulated did not point any fingers directly, instead opting for a more general refuting of “FUD”:

For months before today’s rumors, MEW’s site has featured a pop-up tutorial about how users can protect themselves from phishing attacks.  

How To Protect Yourself from Phishers

In December 2017, MyEtherWallet dealt with an actual scam when a fake MEW wallet app appeared in the Apple App Store. The app rose to number three in the finance app category before it was taken down.

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Ethereum Advisor Predicts Greater Adoption

It may not have had the most growth in 2017, but Ethereum has regained its place behind Bitcoin as the second-biggest cryptocurrency by market capitalization.

Not to be outdone by Bitcoin’s 1,000 percent rise in value in 2017, Ethereum also moved from $10 per Ether to $1,000 in the space of 12 months.

The two cryptocurrencies enjoyed similar success, but their underlying Blockchain technology is contrastingly different.

Ethereum’s flagship smart contract system sets it apart from Bitcoin and has led to it becoming the leading platform for ICOs, allowing developers to use the underlying code for their own applications – commonly known as decentralized applications (dapp).

This is in essence Ethereum’s raison d’étre, providing a monetized Blockchain solution for developers to create applications as described by Investopedia.

Speaking to CNBC this week, Ethereum advisor Steven Nerayoff says the open-source functionality of Ethereum’s protocol could well lead to mass adoption for a wide variety of Blockchain applications.

“You’re seeing a tremendous amount of growth across a wide variety of industries. Fintech is actually the natural area, but now you’re seeing it becoming increasingly more creative — you find projects in the oil and gas industry, you’re finding government using it in their applications, you’re seeing it in gaming, all kinds of different areas.”

The success of CryptoKitties is a prime example of how developers can use the Ethereum software to create innovative applications. The popular online game was so successful that it placed a massive strain on the Ethereum network in 2017 as it became the biggest dapp.

Inevitably, the increasing use of Ethereum will see it’s price soar, according to Nerayoff.

“What you’re seeing with Ethereum is an exponential increase in the number of projects. There are billions of dollars being poured into the ecosystem right now, maybe 10 times more projects this year than last year, which could easily lead to a doubling, probably a tripling in price by the end of the year.”

Expanding market

While Nerayoff expressed bullish sentiments towards Ethereum’s growth this year, he didn’t write off the potential growth of other cryptocurrencies this year.

“The entire space is increasing. There is huge interest by the public and there are more areas in which the public can invest, even in Bitcoin, so you could just see an expansion in the entire space,”

At the time of writing, Ethereum’s total market cap was sitting at $116 bln.

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Combined Crypto Market Capitalization Races Past $800 Bln

The combined market capitalization of all cryptocurrencies hit $800 bln on Sunday, just days after reaching the previous all-time high of $700 bln. The number is at over $825 bln as of press time and keeps growing.

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Following a two-day period of sharp decline just before the New Year, the majority of cryptocurrencies are now growing again, contributing to the rapid increase in the combined market capitalization.

The latest all-time high comes just under a month after the market has achieved a total capitalization of $500 bln. This immense growth, coupled with the fact that 2017 started at a mere $18 bln combined, seems to indicate that cryptocurrency is well on its way to becoming a trillion-dollar industry.

Speaking of individual coins that are driving this upward dynamic, several are of note. Bitcoin, the original cryptocurrency, is hovering at a relatively stable price range between $16,500 and $17,000, with slight growth over the past week. However, the share of its capitalization against that of the market as a whole is still at all-time lows of around 34 percent, as major competitors seem to be outpacing it.

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Ethereum, for example, has surpassed the $1,000 mark for the first time this Friday and keeps growing. Among the likely reasons for this dynamic is the immense level of adoption of the cryptocurrency, which seems to be higher than that of the rest of the market combined.

Ripple is another major producer of growth on the market. It started skyrocketing in mid-December 2017 and has already managed to displace Ethereum as the second-highest cryptocurrency by market capitalization, making its own chairman potentially the richest person on the planet in the process.

However, even if you disregard the major players, there are a lot of factors as to why the numbers are growing so fast. When even meme coins are reaching billion-dollar capitalizations, countries are issuing their own cryptocurrencies, and prominent tech CEOs like Thiel and Zuckerberg are eyeing the industry, a trillion-dollar combined market cap can easily seem a distinct possibility.