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Blockchain and Crypto in the Labor Market: Overview of Salaries Taxes and the Most In-Demand Jobs

Blockchain and Crypto in the Labor Market: Overview of Salaries, Taxes and the Most In-Demand Jobs

                                 

Over the past months, the cryptocurrency market has been demonstrating bearish sentiment,

with crypto prices falling to a yearly lows. This is making some blockchain companies rethink their business models and cut employees. However, the slump didn’t prevent the blockchain industry from experiencing a human resources boom, as evidenced by an active growth of vacancies associated with blockchain and digital assets, according to the latest study by recruiting site Glassdoor.

Increase in demand for blockchain-related jobs

As estimated by LinkedIn analysts, 645 vacancies tagged with the words “blockchain,” “Bitcoin,” or “cryptocurrency” were published on the site in 2016. By 2017, this value has surged to approximately 1,800 and to 4,500 vacancies by mid-May of this year. As of now, LinkedIn’s search system displays 13,816 records related to blockchain and 2,479 records related to cryptocurrency.

These estimates are supported by recent data published by Glassdoor’s recruitment portal. As of August 2018, United States companies had posted 1,775 vacancies related to blockchain technology, which is three times more compared to the previous year. As noted in the Glassdoor report, 79 percent of the vacancies are concentrated in the 15 largest American cities, and the most saturated demand regions show that New York and San Francisco account for 24 percent and 21 percent of the total number of crypto-industry job openings. The current total number of blockchain and cryptocurrency vacancies worldwide has grown to around 3,000 and 900 correspondingly.

Software developers are the highest demanded occupation, with 19 percent of vacancies published by employers seeking employees falling into this category. In addition to programmers and technical specialists in the crypto industry, there is a shortage of product managers, risk analysts and marketing specialists. Traders and investment analysts are not among the most sought-after professionals in the crypto industry. But there are more and more vacancies for specialists in new disciplines that have appeared in the wake of blockchain technology’s popularity — “Decentralized Finance,” “Decentralized Internet,” and “Security Hardware.”

However, if taking into consideration the last three months, a fuller picture looks partially different. According to the extended analytics shared by job-search platform Indeed with Cointelegraph, from October 2017 to October 2018, job-seeker interest for roles related to Bitcoin, blockchain and cryptocurrency declined by 3 percent, while employer interest for roles related to the same terms only rose (25.49 percent), which was different than the interest levels from the year before by both parties. If looking at data from 2016 to 2017, job-seeker interest for roles related to Bitcoin, blockchain and cryptocurrency rose by 481.61 percent, while employer interest for roles related to the same terms rose by 325 percent. The following graph shows both the growth of job-seeker interest in jobs with these keywords and the growth of job postings for jobs with these keywords for that time period.

Today, IBM, ConsenSys and Oracle have the greatest need for qualified personnel. Each of them has more than 200 corresponding vacancies, as Glassdoor reports. They became strong competitors of the industry leaders like crypto exchanges, among which Coinbase and Kraken have the greatest need for qualified personnel. The list of major employers for blockchain professionals has also been joined by larger consulting firms Accenture and KPMG. At the same time, the lack of vacancies related to blockchain from such giants as Facebook, Google and Apple could be noted. The need for crypto industry experts isn’t a uniquely American phenomenon. In August, Cointelegraph reported a 50 percent increase in the number of vacancies associated with blockchain and cryptocurrency in Australia, India, Singapore and Malaysia compared with 2017. At the same time, developers who are proficient in the Python programming language are among the most desirable candidates.

“Half-a-million-dollar” jobs and “insane” packages

The lack of qualified personnel means higher salaries for blockchain specialists. As estimated by Glassdoor, the average base salary for such employees is $84,884 a year. This is 62 percent higher than the average wage in the United States ($52,461 per year). At the same time, the variation in salaries ranges from $36,046 for junior developers to $223,667 a year for qualified software engineers. Blockchain developers with three to five years of experience can earn “half-a-million-dollars” a year, according to Blockchain Developers recruitment agency. At the same time, analysts suggest that newcomers can count on a salary “definitely well over $120,000.”

Company executives also noted the increase in salaries in the blockchain and cryptocurrency industry. According to David Schwartz, chief cryptographer at Ripple, the hiring packages have "gotten insane" since “ICOs dumped a bunch of money on the industry.” In particular, a couple of Ripple developers received “$1 million signing bonus offers,” Schwartz disclosed. Notably, the current average salary of software engineer at Ripple is $125,000, as estimated by Glassdoor. Given the fact that the same job was paid $85,000 in May 2018, according to Paysa, it doesn’t seem the crypto market prices affect the developers salaries, at least not at Ripple.

Some employers attribute the decline in the quality of products produced by developers to the increase in salaries. According to Alex Ferrara, partner at Bessemer Venture Partners, which invests in crypto funds, such an “overeagerness” is “impacting the pace of development. A lot of these projects are way behind on their launch schedules.” The current realities of the blockchain industry has been continuously battered by a declining cryptocurrency market, which is partially responsible for the tightening of staff shortages. As raising funds through ICO became more accessible than crowdfunding, qualified specialists prefer to launch their own projects and begin to assemble their development teams, as was the case with Amber Baldet. The leader of JPMorgan Chase’s blockchain team left the company on April 2 to start her own project. As a result of such “forks” inside companies, the shortage of personnel is becoming increasingly acute.

Who needs salaries in crypto?

The popularity of cryptocurrency as a means of remuneration is also growing, although not as quickly. On Sept. 17, HR startup Chronobank published the results of its survey of 445 crypto enthusiasts from around the world, including the U.S., Australia and Russia. The respondents were asked in which currency they preferred to receive wages. Two-thirds (66 percent) of them stated that they were ready to be paid for work in Bitcoin or other cryptocurrencies. The majority (83 percent) of respondents indicated they were supportive of receiving their bonus payments in digital money. Of the individuals interviewed, 72 percent said that, when choosing their next job, they would prefer an employer who offered the possibility of paying salaries in cryptocurrency.

One-fifth of the respondents indicated that they would exchange cryptocurrency, received as wages, for traditional money. Notably, half of the respondents believe that if they receive a salary in cryptocurrency, they will spend less than they do now. The results of the latest survey conducted by peer-to-peer (p2p) platform Humans.net demonstrated the high level of interest and readiness among U.S. citizens to get paid in cryptocurrencies. Eleven percent of 1,100 freelancers responded that they would like to have their salaries be paid in digital money, and 18 percent expressed their desire to receive a part of their wages in crypto.

Today, wages in cryptocurrency are popular mainly inside the industry. On Aug.18 TechCrunch editor Michael Arrington tweeted that Binance CEO Changpeng Zhao told him that 90 percent of the company's employees preferred to receive a salary in the platform’s native token, Binance Coin (BNB).In December 2017, GMO Internet, a Tokyo-based IT giant, announced its plans to start paying salaries in cryptocurrency. The company intended to pay up to 100,000 yen ($884) of over 4,000 employees monthly salary in Bitcoin. Bitcoin.com also offers its employees the opportunity to get paid in Bitcoin Cash, given the information from job openings located on its website.

However, cryptocurrency wage payment goes beyond the industry. In August, semi-professional football club "Gibraltar United" announced plans to pay its players a salary with a cryptocurrency called Quantocoin. Club owner Pablo Dan believes that the use of cryptocurrency provides greater transparency and, most importantly, simplifies financial relations with foreign footballers playing for the club. Experts believe that the salaries in cryptocurrency will help international companies attract remote foreign specialists.

“Several U.S.-based companies are paying their international workers in Bitcoin, as it can save both the company and the employee money,” Bloomberg Law analysts suggest. According to the statistics published on the company’s website, nearly 200 companies use Bitwage, a service allowing employees and freelancers to receive payments in cryptocurrency. As estimated by Bloomberg Law, about 65 percent of Bitwage clients are U.S. companies, and 95 percent are using it for paying wages to international workers.

The current statistics, located on the Bitwage’s website, shows that over $31 million has been paid to employees by the companies through this service. Among the clients mentioned are Google, Facebook, Uber and Airbnb. For some people, cryptocurrency payments become more than just a new way to carry out the transactions. Workers in such regions like Latin America, which might not have a matured banking system or stable currency, are given the ability to be paid in cryptocurrencies. For example, developers in Venezuela got more business opportunities and revenues with the advent of Bitcoin. However, receiving wages in cryptocurrency may involve tax liability.

Tax liabilities

The main obstacle to the spread of cryptocurrency salaries remains the lack of clearly defined legislation, including tax rules. Today, the regulatory approaches of different countries and their views on the taxation of digital money vary greatly. In the European Union, there are no special rules for regulating activities related to digital money, and the taxation of crypto transactions is regulated by the national legislation of each country. As a result, in France, digital currencies are subject to capital gains taxes, with fees of 14-45 percent. Germany doesn’t charge any taxes as long as cryptocurrency is used as a means of payment. Bitcoin has no established legal status in the U.K,, but is commonly treated as a foreign currency for most purposes, including value-added and goods-and-service taxes.

Asian countries offer a different approach to taxation of crypto-related activity. In Singapore, if digital currencies are part of the taxpayer's investment portfolio, then the profits from selling them are not taxed, since they are considered capital gains. Notably, Bitcoin is recognized not as money but as a service, and therefore a tax on goods and services (local analogue to VAT) is applied to it. In China, cryptocurrency transactions are subject to income tax and capital gains tax, and revenues are subject to taxation. Japanese individuals are charged from 15 to 55 percent for any activity related to Bitcoin. In Australia, cryptocurrency transactions are subject to income tax. In Canada, they are subject to income and capital gains tax, with up to 50 percent of the revenue charged. In the U.S., cryptocurrency owners pay taxes on digital money as they would on property.

Blockchain in recruitment

As blockchain technology and cryptocurrency give birth to new jobs, business models reliant on third-party involvement may become increasingly outdated. The bottom line is that smart contracts — decentralized, digitized commercial agreements — control the fulfillment of obligations by all parties and manage all essential financial flows. As a result, the third-party services of various kinds of intermediaries may no longer be required. Meanwhile, mediation services constitute a large segment of the modern economy. After all, in traditional contracts used by banks, brokers, authorities, realtors and others, it is the intermediary that describes the terms of the transaction, draws up the document template, monitors the execution of an agreement, and appropriates a significant part of the payment.

Smart contracts automatically coordinate and ensure the interests of all parties, almost instantly and free-of-charge. Moreover, the inability to change information in the blockchain provides the highest level of security to all participants in the transaction, eliminating the possibility of data manipulation and deception. Basically, one smart contract can replace a room full of corporate lawyers, realtors, recruiters, risk managers and other professionals whose work essentially boils down to the formal assessment of documents.

In addition to regulating labor relations inside the company, blockchain technology can become a magic pill for the freelancing industry. During the past couple of years, the scale of remote work around the world has increased significantly, and the sector is expected to continue to expand. Former U.S. Secretary of Labor Robert Reich calculated that in a couple of years, 40 percent of the U.S. workforce will be freelancers. However, this could lead to a number of issues since freelancers are not considered to be full-time employees, which means that they remain outside the scope of health insurance, pensions and other social benefits. Moreover, they are forced to use the services of aggregator sites, which primarily focus on the interests of the customer, and not the freelancers themselves. In addition, such platforms like Upwork charge up to 20 percent for a bill, and payments for the work performed are often delayed.

Some projects use the advantages of blockchain technology to solve the problems that currently plague the freelance economy. Some provide freelancers with service where blockchain is leveraged to ensure paid vacation and sick pay when needed. Other solutions offer a blockchain-based system for resolving disputes between customers and freelancers. Some platforms are deploying blockchain-powered Human Resource Bank to allow p2p matching of potential employers with contractors on the basis of verifiability of all user data, and excluding the possibility of falsification. The use of blockchain technologies in social networks and internet sites for freelancers demonstrates the high demand of the industry for new solutions using advanced technologies and cryptocurrencies. The exclusion of intermediaries, direct communication, reputation systems is what the blockchain brings to the labor industry.

What's next

The pace of development and the integration of blockchain and cryptocurrency in everyday life will likely depend on the position and attitude of national governments. Countries with a friendly position on cryptocurrency are already leaders in the use of blockchain technology. Florida residents pay for property taxes, driver's licenses, ID cards and car numbers in cryptocurrencies — Bitcoin and Bitcoin Cash — using the BitPay payment system. The corresponding decree has been approved by the State Department of Taxes.

Meanwhile, in 2017, China banned cryptocurrency trading, ICOs and cryptocurrency exchanges, and the result was a tenfold decrease in the circulation of cryptocurrencies. According to the country's central bank, the yuan's share in the Bitcoin market fell from 90 percent to 1 percent, and 88 crypto exchanges and 85 blockchain startups that had been operating in China since autumn 2017 left the country. In such conditions, the numbers of those who want to receive a salary in Bitcoin may also gradually drop.

Another factor, which may impact the adoption of cryptocurrency in the labor market, is the price of digital currency. As of now, most cryptocurrencies are volatile, and that dramatically cools the enthusiasm of workers regarding the payments of wages in digital currency. As the sector continues to develop, mature and adhere to government-mandated regulations, the number of workers choosing to receive their wages in Bitcoin, Ether and other cryptocurrencies may become more and more common. Raj Mukherjee, senior vice president of products at Indeed,

told Cointelegraph:

“While over the last few years, Indeed saw a steady rise in job-seeker interest for roles related to cryptocurrency, our data shows that job searches for these roles really picked up around the time when the cost of Bitcoin was at its highest. Since then, job-seeker interest has gone down, but still remains strong.”

On the other hand, the demand for specialists capable of solving specific tasks will grow. Stephane Kasriel,

CEO of Upwork said:

“In just a few years, more than 30 percent of the workforce’s essential skills will be new. We’re seeing that shift take place on Upwork, where new and emerging skills like blockchain surface on a monthly basis."

Large corporations like IBM and Microsoft have been willing to invest for the long term in blockchain by expanding hiring over the last year. The trend of mid-2018 will likely continue moving to smaller companies, as experts predict. Though the overall number of applications posted by job-seekers has declined by 3 percent since last year, the continuous fall in cryptocurrencies’ prices hasn’t affected the interest that companies seeking blockchain specialists have demonstrated.

Article Produced By
Julia Magas

Julia is good at analysing cryptocurrency and blockchain market, as well as finding the deep and most demanding information, even when it's practically impossible. Julia writes for a number of digital information resources, raging from music to technology and game reviews. Practices some trading for experimental and analytical purposes.

https://cointelegraph.com/news/blockchain-and-crypto-in-the-labor-market-overview-of-salaries-taxes-and-the-most-in-demand-jobs

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Mercedes-Benz to Use Blockchain Tech for Sustainable Transaction Book Supply Chains

Mercedes-Benz to Use Blockchain Tech for Sustainable Transaction Book, Supply Chains

                                

German automobile brand Mercedes-Benz Car has developed a platform

based on blockchain technology to increase transparency and sustainability in complex supply chains, according to press release published on Feb. 25. Mercedes-Benz, a division of Daimler AG, a German multinational automotive corporation, has partnered with United States-based software company Icertis for cooperating in the development of blockchain tech for supply chain use.

Mercedes-Benz has announced that that they have jointly developed and programmed a prototype with Icertis based on blockchain technology that allows for the storage of documentations and contracts in complex supply chains. The project allows for the creation of a transparent and sustainable mapping of sorted documents across the entire supply chain, the press release notes. The parties have now entered the testing phase of the pilot project. Underlining the complexity of the modern supply chains, Wilko Stark, a member of the divisional board of Management Mercedes-Benz, states that blockchain tech could affect “nearly the entire value chain,”

adding:

"Blockchain technology has the potential to fundamentally revolutionize our procurement processes […] With our Blockchain-prototype, we are in the first step testing one of diverse possible applications with the aim of increasing transparency beyond our direct suppliers."

As Cointelegraph wrote on Sep. 26, Porsche AG, another major German automobile manufacturer, announced their plans to increase investments in blockchain-related startups in order to “gain access to trends, new technologies and business models.” Earlier this month, one of largest general trading company in Japan, Itochu Corporation, officially announced the start of a proof-of-concept aimed at developing a blockchain-backed traceability system that would allow buyers and sellers to record transaction details about supply chains through a smartphone app, as Cointelegraph reported on Feb. 1.

Article Produced By
Max Yakubowski

Max Yakubowski has a Ph.D. in Linguistics and Anthropology, with a focus in innovative technology and its cultural and social influence. He joins Cointelegraph after working as a freelance copywriter and blogger.

https://cointelegraph.com/news/mercedes-benz-to-use-blockchain-tech-for-sustainable-transaction-book-supply-chains

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Blockchain Post-Trade Platform Vakt Partners With Majority of North Sea Oil Market

Blockchain Post-Trade Platform Vakt Partners With Majority of North Sea Oil Market

                                

Vakt, a blockchain-based post-trade platform

for oil, has signed up four new clients, according to a statement published on the platform’s website on Feb. 25. As per Etienne Amic, Vakt’s recently appointed CEO, the company has partnered with four new clients prior to its official launch at International Petroleum Week, which starts in London today, Feb. 26. The new users of the platform join major industry players that initially backed Vakt, including BP, Shell and Total, along with traders Gunvor and Mercuria, the press release notes. Other Vakt investors reportedly include industry giants Chevron, Equinor and Reliance Industries. The new contracts mean that Vakt will be used in about two-thirds of all oil deals in the North Sea region. According to Amic, the significant level of adoption in the energy sector could motivate others to

examine blockchain solutions:

“We felt that we needed about 60 to 70 per cent of a market to reach ignition point [that would] incentivise other people to join.”

According to the announcement, the platform is planning to expand its blockchain services to barges of oil products in northern Europe and United States crude pipelines. Vakt, whose main goal is to improve the routine of commodity trading and eliminate unnecessary paperwork and contracts, was launched back in November 2018, boasting major oil firms and banks as partners. Earlier this month, Amic — formerly a JPMorgan Chase executive — was appointed as Vakt’s new CEO. As Cointelegraph reported, he will be responsible for commodities trading. A similar platform was launched last year in Switzerland by a group of major global banks, trading firms and a leading energy company. The venture, dubbed Komgo SA, oversees a blockchain-based platform for commodity trading financing.

Article Produced By
Ana Berman

https://cointelegraph.com/news/blockchain-post-trade-platform-vakt-partners-with-majority-of-north-sea-oil-market

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Blockchain and the City: New York State as a Tough Model of Crypto Regulation

Blockchain and the City: New York State as a “Tough” Model of Crypto Regulation

              

Recently the New York Department of Financial Services (NYDFS) 

granted statewide virtual currency licenses to two applicants: stock trading service Robinhood and cryptocurrency ATM operator LibertyX. The state’s regulatory regime, commonly known as BitLicense, imposes a set of strict disclosure and consumer-protection requirements on any business that offers cryptocurrency-related services to New York residents. Since the framework was introduced in 2015, only a handful of companies had their applications approved by the NYDFS: The elite club of BitLicense holders now counts just 16 entities, the two newcomers included.

The state has also demonstrated that it keeps close tabs on those who might be in violation of the compliance procedures: In September last year, the New York state attorney general's office published a report that raised concerns over price manipulations that were possibly taking place on cryptocurrency exchanges, and referred three of them to the state’s financial regulator.

While many American states strive to appeal to crypto businesses by implementing lenient policies and easing red-tape pressures on industry startups, New York has championed a regulatory approach more rigorous than that of most nation-states. Many influential figures in crypto community are cross with what they perceive as a vast governmental overreach, yet there seems to be no shortage of firms still ready to take on the pains of obtaining the license. But in the big picture, is this type of regulatory climate that exists in the world’s financial capital beneficial for the crypto industry, mainstream adoption and the Empire State itself?

Reasons to comply

For any company somehow related to finance, the benefits of doing business in New York and with New York residents are obvious. The number of powerful financial institutions per square foot is staggering, the Wall Street money is just a glance away, and a consumer market of almost 20 million people is no small deal, either. This is especially true if you are a prominent player in the nascent fintech industry longing for mainstream adoption.

New York legislators in Albany are well aware of their jurisdiction’s unique position as a major financial hub, and have been long acting accordingly. Martin Weiss, founder of Weiss Research and Weiss Cryptocurrency Ratings, explained that the tendency for strict state-level regulation has a

long history:

“Traditionally, Albany has been tougher than many other states in regulating — insurance, for example. They are the toughest state in regulating financial markets, too. They see themselves responsible for keeping the financial center.”

In the case of crypto, Weiss argued, New York’s centrality to the world’s financial system is a powerful enough factor to overcome the logic of crypto regulation applicable to almost

any other territory:

“Cryptocurrencies are, in essence, borderless. Regulation, in order to catch up, would also have to be borderless, crossing not only state boundaries but also national boundaries. New York is in a unique situation because it regulates a major financial center, the largest in the world. So as long as all those corporations want to remain domiciled in New York, legislators in Albany do have a jurisdictional reach that sticks. In most places in the world, if you try to regulate cryptocurrencies, they’ll just move to another jurisdiction. That is bound to happen with most of cryptocurrency institutions. But that’s not the case with New York.”

Vigilant New York state authorities became concerned with Bitcoin regulation fairly early: Ben Lawsky, the state’s Superintendent of Financial Services, first sketched the contours of what would become BitLicense in July 2014. Regulations came into full effect almost a year after, forcing both existing and incoming players to either comply or quit.

Backlash

Hardly surprisingly, not everyone took the news well. During the summer of 2015, big names such as BitFinex and ShapeShift pulled out of the New York market; crypto exchange Kraken announced cessation of services to New York residents in a blog post that called BitLicense “a creature so foul, so cruel that not even Kraken possesses the courage or strength to face its nasty, big, pointy teeth.” Erik Voorhees and Jesse Powell, the bosses of ShapeShift and Kraken, respectively, remained BitLicense’s staunch critics, calling for the regulation’s repeal ever since.

Aside from decrying the redundancy of regulation, opponents often point out how the pace at which licenses get approved is dismally slow — it is not uncommon for a company to wait for three years to be approved, as it happened with Genesis Global Trading. This part of the process alone can put smaller companies at a disadvantage. As Kevin Hobbs, CEO of the blockchain consultancy Vanbex Group,

told Cointelegraph:

“We believe that these strict regulations hinders cryptocurrency innovation in the Empire State. BitLicense is particularly restrictive for small companies to bear. Since only the largest companies possessing ample resources able to comply with the strict regulations. The BitLicense became effective in New York on June 24, 2015 but in the three years since then, only five crypto-related companies have been approved for a BitLicense in the state. Indeed, these one-size-fits-all regulations ultimately stifles innovation.”

Pushback from the more regulation-averse flank of crypto community has also received some political support: Larry Sharpe, a Libertarian Party candidate in the 2018 New York gubernatorial election, argued that the BitLicense regime serves to entrench the incumbent’s dominance in the market, and proposed to eliminate the licensing process. His bid in the November 2018 election, however, was unsuccessful.

Maybe it’s not that bad?

Those who are on board with the New York authorities’ rigorous policies toward cryptocurrency usually speak in the language of benefits to institutional and mainstream adoption. The idea is that the robust, large-scale crypto enterprises that prove capable of complying with the licensing requirements could draw the whole ecosystem closer to the core of the incumbent financial system that New York embodies. Robinhood, the recent addition to the pool of BitLicense holders, could definitely play this role. As Sky Guo, CEO of smart contract platform Cypherium,

put it:

“A great part of Robinhood’s value to our space will be as a leader in quasi-institutional compliance. New York is the center of traditional finance, and the state's licensing process — for good reason — prioritizes the integrity of its complex systems. For these reasons, Robinhood will be a great bridge between the two communities. Because Robinhood aims to open public access to traditional finance mechanisms, the company has a natural affinity for crypto projects and the DLT space in general.”

In addition to institutional-level shifts, Robinhood is poised to help the cause by adding a share of its regular stock users to the ranks of crypto community, notes

Eric Ervin, CEO of Blockforce Capital:

“Long-time cryptocurrency believers may not be migrating over to the Robinhood crypto platform anytime soon due to its lack of certain features that are available on other crypto trading platforms. However, the increased trust instilled by the issuance of the BitLicense may be enough to convince current Robinhood users who are on the fence to give the service a try. Robinhood’s significant user base in the state of New York will open the door to new crypto investors.”

Finally, there are signs that the Empire State’s regulatory framework is evolving into something more flexible and dynamic. More companies have seen their applications for a crypto license approved in the last year than in the previous three.  A seemingly lighter version of the approval process is now applied to companies seeking permission to offer crypto custody. According to reports from inside the state legislature, a task force is being assembled to focus entirely on digital currency. Guy Hirsch, Managing Director of trading platform eToro US,

told Cointelegraph:

“We think that New York regulators are making a genuine effort to make the state competitive for the blockchain era. BitLicenses have been approved on a more regular basis recently. NYDFS have issued several novel approvals for crypto custody. They also have put together a very clear Q&A on their website that provides a coherent framework for companies to buy, sell, hold, and transmit cryptoassets in a compliant manner.

“A lot of us think that the financial services industry will run on a blockchain. If this assumption turns out to be true then New York, being the financial capital of the world, has a vested interest in making sure it remains as such in decades to come.”

New York has gravitated toward a tight regulatory model that, at least according to the majority of state representatives, fits its status of the global financial center the best. In the years to follow, this model will enter a competition with alternative conceptions of how to do it. Martin Weiss hopes that this competition will ultimately yield a uniform, globally enforced

regulation:

“What you’ll find is various jurisdictions experimenting with regulation: Malta, UK, Russia, Belarus — some taking a much more liberal attitude, some taking stricter attitudes — and over time, the model that works the best will become the predominant model globally. We’ll hopefully see a global regulatory regime enforced by supranational organizations like the IMF [International Monetary Fund] or the BIS [Bank for International Settlements] or something like that. New York is establishing a tough model.”

Article Produced By
Kirill Bryanov

Kirill Bryanov is a PhD researcher at Lousiana State University. His scholarly interests center on political and societal implications of communication technology, with a focus on blockchain-powered decentalized architectures.

https://cointelegraph.com/news/blockchain-and-the-city-new-york-state-as-a-tough-model-of-crypto-regulation

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How MIT Joined Ethereum in the Race for the PoS Blockchain

How MIT Joined Ethereum in the Race for the PoS Blockchain

               

As reported by Cointelegraph on Jan. 24,

the press service of the Massachusetts Technical Institute (MIT) announced the development of a new cryptocurrency design based on the proof-of-stake (PoS) protocol. Ethereum — Algorand’s closest competitor, according to the existing estimates — will launch its PoS system sometime between 2019 and 2021. Scheduled updates required for a gradual transition from the proof-of-work (PoW) to a PoS algorithm have been regularly postponed by the Ethereum Foundation due to network vulnerabilities and failures in the process of the network’s upgrade.

Trilemma: It's all about scalability

The term “trilemma” was first used by Vitalik Buterin when referring to the phenomenon when only two of the following parameters can be achieved at the same time within the framework of the blockchain ? security, decentralization and scalability. If the first two qualities successfully coexist in the current state of the blockchain, the final one has not yet been achieved. The fact is that the current blockchain system is designed in such a way that each node stores information about the entire network and processes all transactions. This mechanism provides a maximum degree of security but, at the same time, reduces scalability. The blockchain cannot process more transactions than is processed by a single node. That is why Bitcoin currently processes about three to seven transactions per second (TPS), and Ethereum about seven to 15 TPS.

Ethereum’s perspective on the scalability

In order to find a solution, the Ethereum team has developed an entire roadmap, which provides a framework to gradual transition to a PoS consensus within the Casper project, as well as Ethereum's layer one and layer two solutions. The layer one is represented by sharding, which splits the global network nodes into groups (segments), so each group of nodes has the same bandwidth as the current Ethereum network. Then they are connected to each other through cross-references, so the network remains unified and receives almost unlimited scaling opportunities, depending only on the total number of full-featured network nodes. Development of the layer one includes channels similar to the Lightning Network, such as the Raiden Network and the model of the “childchain,” or sidechain, on which the Plasma solution is based.

The complexity of these mechanisms, as well as the fact that some of these changes, especially intra-network adjustments of protocols, require coordination between the relatively large user base and Ethereum developers, have caused the launch dates of the various phases of the roadmap to be postponed several times, with developers reconsidering the security settings.

Algorand’s take on scalability

Algorand intends to get ahead of Ethereum and release pure PoS later this year. The new cryptocurrency design — named Vault — will work on the basis of the Algorand blockchain, which was first presented at the Financial Cryptography and Data Security Conference on April 4, 2017. The author of the solution is Silvio Micali, a professor at the MIT and recipient of the Turing Award, who, in 1982, together with Shafi Goldwasser, created the first public-key probabilistic encryption system. According to Micali,

trilemma is false:

“The trilemma is false. The fact that 2000+ prior blockchain projects could not simultaneously be secure, scalable and decentralized is not proof that achieving all these three properties is impossible.  Algorand exists to solve this exact challenge and we are advancing the limits of blockchain by means of technological breakthroughs like our pure of proof stake algorithm.”

Data storage and bandwidth

The creators of Vault and Algorand promise users that they will not have to download the entire blockchain to their computer. This requires only a small part of the information about operations

in the network.

“With Vault, a blockchain compression technology, we want to make sure that Algorand will avoid the storage and bandwidth costs associated with other blockchain protocols, which in turn make it a more viable blockchain solution for companies to adopt. The most exciting parts of Vault are that it frees up local storage on nodes, distributes the storage costs of the Algorand blockchain across different parts of the network by sharding (without sacrificing security), and reduces the bandwidth required to join the network by allowing new nodes to avoid checking every block since day one.”

The technical presentation of the project prepared by MIT states that the Vault’s block size is 10 megabytes, which is equivalent to 10,000 transactions, and each block contains a hash of the previous block. For comparison, to verify transactions in the Bitcoin network today, the user must download 500,000 blocks with a total data volume of about 150 gigabytes. At the same time, MIT assumes that it is required “to keep all account balances in order to check new users and ensure that they have enough funds to complete the transactions.”

To reduce the amount of stored data, Vault applies a special principle of data separation. Vault’s blockchain, like Bitcoin, stores transactions in a Merkle tree, but it is divided into fragments assigned to different groups of users. Each of them needs to store transactions only from its fragment and root hashes. For verification of transactions outside the assigned fragment, a special method has been developed for searching a group of nodes that intersect the entire tree. So, there is no need to check all the blocks from the very beginning. Ethereum developers plan to scale the PoS network with the interaction of two layers ? sharding and Plasma, in which, according to Buterin, it will be possible to conduct tens of thousands of

transactions per second.

“If you add 100x from Sharding and 100x from Plasma, these two together basically give you a 10,000x scalability gain.”

The Ethereum foundation suggests a PoS blockchain model in which nodes can work in parallel – “shardchain.” The model is quite similar with the one used by Algorand, and implies that each node has to carry a small part of data in order to complete a transaction — and each shardchain is a separate blockchain having separated accounts, state and

transactions.

“Imagine that Ethereum has been split into thousands of islands. Each island can do its own thing. Each of the islands has its own unique features and everyone belonging on that island, i.e. the accounts, can interact with each other and they can freely indulge in all its features. If they want to contact with other islands, they will have to use some sort of protocol.”

In order to achieve high bandwidth, Ethereum plans to process part of the transaction outside the blockchain by means of its second layer, Plasma. Plasma may be regarded as a childchain that could run entire applications featuring thousands of users with minimal interaction between it and the Ethereum mainchain. However, this childchain would also be able to produce its own childchains, essentially creating numerous branched blockchains, all of which are connected to the mainchain. Since operations on those sub-chains won’t have to be replicated across the entire mainnet, they could move a lot faster and reduce transaction fees. Unlike similar solutions from other projects — for example, EOS — Algorand will work on a pure PoS system,

Micali said:

“Algorand's consensus model is a Pure Proof-of-Stake (PPOS) model based on a Byzantine agreement protocol. This means that the blockchain is distributed and fault tolerant without any form of centralization and will continue to function as long as more than two thirds of the currency is in honest hands.”

The secret is in the use of a Verifiable Random Function (VRF) — created by Micali back in the 1990s — which performs a secret cryptographic sortition to select committees to run the consensus protocol. This allows the Algorand blockchain to reach the scale and performance necessary to process transactions of

millions of users.

“Essentially, when a new block is proposed to the blockchain, a committee of ‘voters’ is selected to ‘vote’ on the proposed block. If more than two-thirds of the ‘votes’ are cast by honest users, then the block is deemed valid and will be certified. Committee members are chosen based on the number of algos they have. Committees are made up of randomly selected accounts with voting power dependent on their online stake.”

Will the trilemma be solved?

Despite the repeated delay of the Constantinople release — a fundamental intermediate update on the road to PoS — Afri Johnson, an Ethereum developer, assumes that Ethereum 2.0 and PoS will not be delayed, since they are being worked on by several independent teams and

will go live soon:

“Furthermore, it's important to understand that Proof-of-Stake, the so-called ‘phase 0’ / the ‘beacon chain,’ will not be a hardfork, unlike other milestones. We will see beacon chain testnets very soon, within weeks or months. And I expect that we can reach the Serenity milestone within a year, optimistically speaking.”

During one of the latest presentations of Ethereum 2.0 on Oct. 31, Buterin suggested that its launch is not so far away. Earlier, he said that the blockchain in its current state is doomed until PoS starts functioning.

Article Produced By
Julia Magas

Julia is good at analysing cryptocurrency and blockchain market, as well as finding the deep and most demanding information, even when it's practically impossible. Julia writes for a number of digital information resources, raging from music to technology and game reviews. Practices some trading for experimental and analytical purposes.

https://cointelegraph.com/news/how-mit-joined-ethereum-in-the-race-for-the-first-pos-blockchain

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Mark Zuckerberg Considers Blockchain for Data Authorization and Logins

Mark Zuckerberg Considers Blockchain for Data Authorization and Logins

              

Mark Zuckerberg, CEO and founder of Facebook,

expressed interest in utilizing blockchain technology for the authorization of data, such as logins and account validation, in an interview with Harvard Law professor Jonathan Zittrain on Feb. 20th. In the interview, Zuckerberg iterated his January promise where he said he would look into blockchain and cryptocurrencies for its power to

decentralize the internet.

Zuckerberg told Zittrain that he “thinks we [Facebook] are a decentralizing force in the world,” adding that people of his generation got into technology because “It gives individuals power, and is not massively centralizing.”

With this mindset, Zuckerberg went on to explain the potential use cases of blockchain within Facebook’s framework, especially around decentralizing the control of data—a concern that has dogged Facebook since the Cambridge Analytica

scandal.

“Basically, you take your information, you store it on some decentralized system, and you have the choice to log into places without going through an intermediary,” .

The CEO also added that decentralized systems may give users more control over their data but could also lead to more abuse, and any recourse would be

far more difficult:

“In a fully distributed system, there’d be nobody who could cut off their access. A fully distributed system empowers individuals on the one hand, but it really raises the stakes,” said Zuckerberg. “It’s a lot easier to hold accountable large companies like Facebook or Google than a series of third-party apps. You’d also have more cases of abuse, and the recourse would be much harder.”

During the discussion, Zuckerberg was happy to look at both sides of the equation in terms of implementing blockchain technology on the social media platform. In that vein, he stated “I haven’t found a way for this to work” when explaining his stance about potentially using blockchain for login authentication—another use case the CEO is mulling over.

Facebook has taken another step towards experimenting with and implementing blockchain technology on its platform. Former VP of Messenger David Marcus was reassigned to launch a team to explore blockchain for Facebook in May of last year. On top of that, a number of blockchain developer roles opened up in December last year.

Facebook has shown its interest in blockchain ever since Zuckerberg made public his promise to further explore the technology, but this interview represents additional evidence that the social media giant is closer to utilizing blockchain for specific purposes within its enterprise. Such a move can’t be underemphasized as large companies begin leveraging and investing in the new technology.

Article Produced By

Darryn Pollock

Darryn is an award-winning journalist that began his career covering sports for a major national newspaper group in South Africa. Since then, he has married his interest in blockchain and cryptocurrency and looks to cover the emerging ecosystem as thoroughly as possible. He is particularly interested in the technical and economic impact of cryptocurrency. The author of this article is invested and/or has an interest in one or more assets discussed in this post.

https://cryptoslate.com/mark-zuckerberg-considers-blockchain-for-data-authorization-and-logins/

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SK Telecom Deutsche Telekom to Build Blockchain Identity Platform

SK Telecom, Deutsche Telekom to Build Blockchain Identity Platform

             

South Korea's largest wireless carrier, SK Telecom (SKT),

is partnering with the world’s fifth largest telecoms firm, Germany’s Deutsche Telekom, to develop a blockchain-based mobile identification solution. The news was reported in a press release from SKT on Feb. 21. A Memorandum of Understanding between the two firms is to be formalized during the Mobile World Congress (MWC) 2019, which kicks off on Feb. 25 in Barcelona, Spain.

The collaboration will see SKT and Deutsche Telekom’s R&D unit, T-Labs, develop a commercialized, blockchain-powered mobile identity solution that can be used for applications such as access control, dealings and contracts. SKT told local news outlet The Korea Times that it believes blockchain-based digital identification will significantly streamline and secure the process of verifying personal data. Oh Se-hyun, who heads SKT’s blockchain unit,

noted:

"Mobile blockchain identification can be utilized in a variety of areas including logins both online and in offices. Beginning with the latest collaboration, we will further spur the innovation of information and communications technologies."

SKT has outlined that many existing e-commerce and other web-based interactions require users to disclose personal data — such as their date of birth and phone number — whose circulation subsequently escapes their control.

In an encrypted blockchain system, such disclosure would be unnecessary, thereby offering more autonomous and secure management of sensitive information. SKT told reporters that blockchain-powered identification solutions could ultimately replaced government documents, including passports. Set to demonstrate their joint solution during MWC 2019, the Korean and German firms have said they expect travelers from both countries will face less friction confirming their identities by using the new system.

As reported, Deutsche Telekom has recently joined the Linux Foundation’s open source blockchain project Hyperledger, used by many enterprise-focused firms, such as IBM. SKT, for its part, has previously participated in the blockchain economy by backing Korean crypto exchange Upbit, as well as launching a blockchain-based asset management service and blockchain startup support platform in April 2018.

Article Produced By
Marie Huillet

Marie Huillet is an independent filmmaker, with a background in journalism and publishing. Nomadic by nature, she’s lived in five different countries this decade. She’s fascinated by Blockchain technologies’ potential to reshape all aspects of our lives.

https://cointelegraph.com/news/sk-telecom-deutsche-telekom-to-build-blockchain-identity-platform

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Ohio County Auditors to Explore Blockchain-Based Real Estate System

Ohio County Auditors to Explore Blockchain-Based Real Estate System

             

The County Auditors’ Association of Ohio (CAAO)

has announced the formation of a working group to study the use of blockchain for the effective transfer of property deeds. The news was reported on Feb. 21 by Ohio-based blockchain startup SafeChain — the technical advisor for the multi-county initiative.

The association’s collaborative effort will reportedly test the use of blockchain technology to bring efficiency gains to the execution and management of real estate transactions and the transfer of land titles across multiple counties. Their ongoing projects will be reportedly be reviewed by SafeChain member Tony Franco as they work to set goals and establish operating principle for the technology’s prospective use. CAAO, chaired by Warren County Auditor Matt Nolan, comprises thirteen Ohio county auditors, whose role as public officials includes oversight of the financial books and records of all county officers, as well as administering their respective counties’ budgets.

CAAO chair, Matt Nolan, was quoted in the press release as saying:

“We have a committed group […] to enhance technology and improve government operations to the benefit of the taxpayer. CAAO has set an extremely high standard for getting involved in technology projects due to the need to recognize its members’ diverse needs; this makes the formation of this working group particularly noteworthy.”

To press time, members of the CAAO have not responded to Cointelegraph’s request for comment on the development. As previously reported, the state of Ohio has made a bid to position itself at the fore of blockchain and cryptocurrency adoption, becoming the reported first state to accept Bitcoin (BTC) for tax payments in November 2018. In December, a total of seven Ohio funds pledged to invest over $300 million into blockchain startups through 2021.

Earlier in 2018, Ohio House of Representatives Speaker Ryan Smith convened a group of lawmakers, industry and academic figures to discuss positioning the state as a pro-innovation hub for blockchain. Alongside SafeChain, a gamut of startups are developing blockchain-powered real estate solutions, including the platform RealBlocks, which closed a $3.1 million seed funding round backed by digital assets manager Morgan Creek Digital this January.

Article Produced By
Marie Huillet

Marie Huillet is an independent filmmaker, with a background in journalism and publishing. Nomadic by nature, she’s lived in five different countries this decade. She’s fascinated by Blockchain technologies’ potential to reshape all aspects of our lives.

https://cointelegraph.com/news/ohio-county-auditors-to-explore-blockchain-based-real-estate-system

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Blockchain4Humanity Awards for Social Applications to be Unveiled at Labitconf Conference 2018

Blockchain4Humanity Awards for Social Applications to be Unveiled at Labitconf Conference 2018

               

Blockchain4Humanity, Blockchain4Goodrocks,

Bitcoin ONG Argentina, and RSK are teaming up to create a safe environment for projects to innovate and bring solutions that contribute to a positive change in the world. Social Impact projects restore trust in the Blockchain technology’s potential to significantly change the way we interact with each other and the world around us.

Blockchain4Humanity (B4H) strives for a world where the inequality gap is minimized, where business models bring positive change in people’s lives, and where an inclusive economy flourishes. Unfortunately, looking at the world as it is now, social impact projects are few and sporadic. Last year, the Blockchain4Humanity Awards were born at the renowned South-American Bitcoin Conference: Labitconf. Initially conceptualized by RSK and Bitcoin Argentina, it was decided to support the teams using Blockchain technology to shape a better world. b4H gives them the opportunity to accelerate their ideas and concepts, and bring us closer to this ideal world.

B4H seeks strong teams that can make good use of blockchain for social good, certain that the results could be groundbreaking. For example, the 2017 Blockchain4Humanity Awards unveiled the awesome work of EthicHub platform, which makes lending accessible to thousands of coffee producers while increasing returns to the lender. Modeling high social impact while offering an attractive return to the platform participants, EthicHub is an example of projects that b4H wishes to accelerate and support the mainstream adoption.

The whole b4H family is excited to receive applications and continuous to encourage great projects to come forward for the Blockchain4Humanity Awards, that will be presented by NGO Bitcoin Argentina and RSK in December 2018 at Labitconf Conference in Santiago de Chile.  After last year’s awards were released, the Blockchain4Humanity team, collaborators and partners made 2018 the year of defining and exploring all possibilities to create a decentralized accelerator that propels promising projects. Now with a strong network of partners, and the joining of Temco Labs as sponsors, the awards and the acceleration programs have enough fuel to start for this second edition.

Next wave of promising projects is coming as applications are now open via a simple online form at b4h.world until the 15th of November. Selected projects will be onboarded on the b4H Decentralized Altruistic Community (DAC) on the Giveth platform. The b4H DAC will ensure projects will be coached and mentored on all aspects that lead to the healthy delivery of a product.

Article Produced By
Bob Keith

Chronic crypto nut and freelance writer/editor for longer than I care to remember. Have finally found a home here at Crypto Disrupt.

https://cryptodisrupt.com/blockchain4humanity-awards-for-social-applications-to-be-unveiled-at-labitconf-conference-2018/

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IBM Launches Blockchain Platform on Cloud Service in Melbourne

IBM Launches Blockchain Platform on Cloud Service in Melbourne

                

IBM has released its blockchain main net

out of its data center located in Melbourne, Australia. This will purportedly allow their customers to run their applications on the company's cloud, according to an article published on news outlet ZDNet on Feb 11. The IBM platform was built on Hyperledger Fabric. Hyperledger is a project that aims to improve cross-industry blockchain technologies that is hosted by the Linux Foundation.

A Sydney-based IBM data center is reportedly set to open at the end of March, joining the other centers in Tokyo, London, Dallas, São Paulo, and Toronto. The head of blockchain for IBM in Australia and New Zealand, Rupert Colchester, told ZDNet that a second center would make the technology more widely available and provide a redundancy. Additionally, with the establishment of physical infrastructure, customer data will not have to cross borders, and would provide security for regulated applications in government and financial services. Colchester said, “Customers who are deploying blockchain applications have reached a maturity of projects that requires the data to be stored in Australia."

Colchester added that blockchain technology is widely applied and is “pretty much active” across all industries in Australia. He said, “I do very few education sessions nowadays, but there is a lot of discussion whereby clients are trying to understand how best they can apply it to the business problems they have." In September of last year, Australian real estate major Vicinity announced it will trial a blockchain solution for its energy network. Through a partnership with Australian energy tech company Power Ledger, the trial became a part of Vicinity’s $75 million solar energy program in Castle Plaza — a mall located in Adelaide, South Australia.

IBM has been actively expanding its use of blockchain technology. On Jan 31, IBM completed a blockchain-based trial in which it shipped 108,000 mandarin oranges from China to Singapore. The technology purportedly reduced paperwork handling and costs for the shipment, On Feb. 8, IBM announced that a project using blockchain and the Internet of Things (IoT) to combat drought in the United States state of California is underway. IBM Research and sensor tech provider SweetSense partnered with the University of Colorado Boulder and the non-profit Freshwater Trust to use blockchain and IoT to manage the use of groundwater.

Article Produced By
Miranda Karanfili

Miranda is a journalist based out of New York City. She is a dedicated writer, passionate about storyelling and making voices heard through her writing. She has joined Cointelegraph as a News Editor.

https://cointelegraph.com/news/bitcoin-hovers-near-3-630-as-top-cryptos-see-minor-losses

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