Blockchain Tracing the Cannabidiol Supply Chains Will Help Define Legal Standards

Blockchain Tracing the Cannabidiol Supply Chains Will Help Define Legal Standards

Blockchain Tracing the Cannabidiol Supply Chains Will Help Define Legal Standards

By RACHEL WOLFSON

Policymakers in Europe and the U.S. are pushing to use blockchain technology to ensure a safer, regulated cannabis market.

Interest in cannabidiol-based products has been on the rise, as recent statistics show that the global cannabis market is expected to have reached $42.7 billion in the next four years. Yet as hemp-derived cannabidiol, or CBD, products gain popularity, federal agencies are proceeding with caution around regulatory measures for cannabis products. 

In order to address regulatory concerns, policymakers in different regions are looking toward using blockchain technology as a solution that can provide transparency into the complex cannabis supply chain. 

 

Ensure CBD becomes a novel food in Europe

Most recently, the Cannabinoid Association of the Netherlands, which is a consortium of Dutch cannabidiol producers that serve as an advisor to the Dutch government, announced the launch of a blockchain-based traceability tool that would enable consumers to trace certain CBD products directly back to their source.

The CAN launched its blockchain initiative to help provide clarity around the European Union’s looming decision to classify CBD as a “novel food” or not. While European food standards agencies, including the United Kingdom’s, planned to allow CBD products to be sold at certain food retailers in 2021, the European Commission revised its 2015 Novel Food Regulation to say that CBD is not legally classified as a novel food.

So, while it remains unclear how CBD-based food products will be classified in the U.K. and throughout parts of Europe, the CAN’s blockchain tracing tool could demonstrate how a CBD regulatory environment might function and thrive in the United Kingdom. 

Mark Reinders, the CEO of HempFlax and a co-founder of CAN, told Cointelegraph that the CBD industry is a lucrative market that attracts a wide array of participants. But in turn, bad actors selling low quality, false or even harmful products are also involved in the cannabis industry. According to Reinders, full traceability along every step of the hemp-derived CBD supply chain is the only way to ensure product quality and consumer protection:

“Blockchain applications can help to increase supply chain transparency by efficiently and cost-effectively tracing materials between parties. The immutable nature of blockchain also helps to avoid fraud and increase trust.”

As the CBD market begins to take shape in Europe, the U.K. and other parts of the world, Reinders noted that new levels of transparency must be adopted by CBD producers worldwide to prove that cannabis products are safe and meet regulations. 

Roni Furlan, the founder of the nonprofit organization Novatrace, told Cointelegraph that CAN’s free traceability tool, known as CanCheck, ensures that the CBD supply chain is traced from seed to the final product by uploading production data to a distributed ledger node.

He mentioned that supply chain participants can create new material batches; perform production and manufacturing processes; add certificate and lab test documentation; and transfer and receive materials between accounts: 

“When a producer submits a request to certify a new batch of product material (bulk product), Novatrace verifies that all traceability data is complete and compiles a traceability certificate.

CAN checks the traceability certificate and verifies that the production and lab report data comply to the industry standard. All products (product LOTs) made from the certified material may carry the quality mark logo.”

In addition to ensuring that products comply with regulatory standards, Furlan noted that consumers can access the CanCheck tool for free at cancheck.org. Individuals can scan a QR-code on a product, flyer in a store or paste a link from an online retailer to see which products have the CAN quality mark.

Each product containing the CAN quality mark can be traced and verified to show accurate levels of CBD and tetrahydrocannabinol, or THC, the absence of contaminants and a full spectrum composition of the product. 

Iris Freie, an advisor to the Dutch government on cannabinoid policy, told Cointelegraph that so far, Jacob Hooy CBD-products have been CAN certified and are fully traceable with three more brands being close to certification, noting that any producer that wishes to market its products within the Netherlands can apply for the quality mark.

“We are looking for opportunities to cooperate with other associations in Europe, too, so that our industry standards may develop into European standards,” Freie remarked. 

ecosystem for entrepreneurs

California rallies for cannabis supply chain tracing

California has also been pushing for government authorities to use blockchain technology to help define legal standards around cannabis. This shouldn’t come as a surprise, as California has been ranked as one of the largest legal cannabis markets in the world. However, an NPR article notes that California’s cannabis excise tax generated only $74.2 million during the second quarter of last year, falling short of estimated projections and suggesting that the country’s largest marijuana market may be struggling to take off.

Berkeley city council member Ben Bartlett told Cointelegraph that California government officials are currently advocating to adopt a blockchain-based track-and-trace methodology to ensure accurate record-keeping, better retention of taxation and standardization for the cannabis industry. 

Bartlett helped to compose a report illustrating a blockchain roadmap for California. He mentioned that the document has been sent to the California governor and legislator for consideration, noting that there is an entire section dedicated to how blockchain technology can be used to manage the cannabis supply chain. Bartlett said:

“This will help standardize the cannabis industry, as we don’t have a clear picture of seed to sale and all the elements involved.

Using blockchain would ensure that we are dealing with a product that is safe and recognized by state health standards. This is also a way to professionalize the emerging cannabis market.” 

While the report mentions that California policymakers should accept blockchain-based verification and reporting mechanisms for the cannabis supply chain, the document further notes that policymakers should consider “authorizing participants in the cannabis supply chain to use payment mechanisms that implement stringent industry ‘Know Your Customer’ processes but also accommodate U.S. regulatory concerns.”

According to Bartlett, the blockchain roadmap is the first recommendation of its caliber to be sent to the California governor for review. “Even though cannabis has its own allies and issues in the government, it was important to include because we see it as beneficial for the economy as a whole,” he remarked. 

 

How will governments react? 

While steps are being taken by policymakers to use blockchain for a safer, more widely accepted cannabis industry, government officials will have the final say. Bartlett noted that government responses to California’s blockchain roadmap report should be received in the spring or fall of this year. He is hopeful the recommendations will be approved in an attempt to revitalize California’s economy.

Freie thinks every government will recognize the CanCheck tool as useful. However, its success depends on the United Nation’s vote in December on whether CBD will be regarded as a narcotic or novel food. Freie finished by saying:

“Ideally, an EU-wide maximum THC concentration will be implemented in the future, too. Then it will be possible to create an industry standard that is applicable across the EU.”

Article produced by RACHEL WOLFSON

https://cointelegraph.com/news/blockchain-tracing-the-cannabidiol-supply-chains-will-help-define-legal-standards

 

ecosystem for entrepreneurs

 

Heiko Closhen, Entrepreneur

US coffee giant Starbucks turns to blockchain for beans tracking

US coffee giant Starbucks turns to blockchain for beans tracking

US coffee giant Starbucks turns to blockchain for beans tracking

By Shaurya Malwa 

Coffee fanatics across America can now track their Starbucks bean purchases right to the farms they grew in. And so can farmers, who can similarly verify their beans ended up in the right place.

 

Starbucks goes the blockchain way

Seattle-based Starbucks, one of the biggest coffee chains on the planet, is deploying its blockchain-based tagging app across all stores in America to allow customers to trace their purchase back to farmers.

Consumers in the past few years have increasingly become more interested in knowing where their food comes from, how it was grown, and whether it was produced in a sustainable and ethical way, said Bloomberg

This has caused some of the world’s largest food companies to be more transparent about where their products come from — with blockchain technology serving as a solution.

The new blockchain tool helps customers to verify if a package, which for example says it comes from Columbia, has actually come from the country instead of a fake claim of origin.

The app is powered by Microsoft’s enterprise blockchain services, which will allow Starbucks to share with its customers the traceability data the world’s largest coffee- shop chain has been collecting for more than a decade. 

Just launched: Meet the people and see the places behind your bag of Starbucks coffee with our new Digital Traceability tool. Simply scan or enter the batch code of any bag of whole bean coffee from U.S. stores to get started: https://t.co/ihvA0Emxyb

— Starbucks News (@StarbucksNews) August 20, 2020

Starting Tuesday, customers buying coffee at Starbucks stores across the U.S. will be able to use a code on the bags to find out where their beans came from, where they were roasted and even get brewing tips from baristas, said Michelle Burns, the company’s senior vice president of global coffee and tea sales.

Burns added:

“That allowed us to have the foundation to now build a user-friendly, consumer-driven tool that certainly provides that trust and confidence to our customers that we know where all of our coffee comes from.”

ecosystem for entrepreneurs

The call for sustainability

The report added the move comes as youngsters and millennials have started to pay a premium for sustainable and small-batch products. This has led to the rise of craft roasters in the past few years, where coffee is roasted on location instead of factories far away.

Starbucks is not the first coffee roastery to turn to the blockchain. In 2019, mid-sized roasteries J.M. Smucker Co. and Jacobs Douwe Egberts joined a blockchain initiative, developed in partnership with IBM.

But tracing coffee is not a straightforward task, especially when hordes of middlemen are involved in the process. This means that roasteries like Starbucks, for now, can track beans only up to a country level for some blended coffee bags, while other single-origin products can be traced right down to the farmers.

Meanwhile, farmers will also get access to the blockchain app. They only need an internet-connected device to type in the code and verify the data.

Article produced by Shaurya Malwa

https://cryptoslate.com/us-coffee-giant-starbucks-turns-to-blockchain-for-beans-tracking/

 

ecosystem for entrepreneurs

Heiko Closhen, Entrepreneur

Why Are Players Choosing CryptoSlots Over Other Casinos?

Why Are Players Choosing CryptoSlots Over Other Casinos?


CryptoSlots is a cryptocurrency-based casino, one of the first of its kind,

with a growing community of experienced online casino players. What makes it special is a combination of unique ingredients, fostering a modern environment that values privacy and fairness. Take a look…Privacy is key Privacy issues have long plagued online casinos. Although most veritable online establishments have taken data protection precautions, hacking is still a prevailing threat. Hard Rock Casinos has suffered two wide-scale data breaches in recent years.

But players need not bear the brunt of the dangers. CryptoSlots requires only an email and password to sign up – which is a far cry from the detailed forms many traditional casinos require upon registration. The data voluntarily offered is so minimal it does not posit any threat to privacy invasion or identity theft. Anonymity is the golden ticket to remaining secure. As long as your password follows the provided guidelines and is unique among the passwords you use, you are safe. The nature of cryptocurrencies themselves surpass any of the banking issues that could lead to data insecurity. Any time a player deposits or withdraws, their details are on the blockchain.

Secure wins with Provably Fair games

Although at any licensed casino a player should not have to question fairness, in reality, many doubt the legitimacy of casinos proclaiming complete fairness. Provably Fair is the first technology of its kind to provide users with the tools to assess the results of their gameplay. Based on blockchain technology, it proves that neither the casino nor the player know the game result until displayed. Unlike some of its crypto contemporaries, CryptoSlots does not subscribe to this half-heartedly: every CryptoSlots game is Provably Fair.

Uniqueness = Excitement

There are thousands of casinos online, some good, some bad, some mediocre. Unfortunately, what a lot have in common are the games themselves. Several huge gaming providers feed the majority of casinos out there, so despite hopping from casino to casino in want of fresh fun, players are presented with the same list to select from.

Slotland Entertainment S.A. has always been an independent provider. Its three brands all contain a range of premium slots, keno, and video poker that are found nowhere else online. CryptoSlots is one of this family of casinos. For the player in need of a little variety, it is the perfect place to play. Designed and developed in-house, game themes range from the traditional (like fruity classic Fruitful 7s), to the modern (like crypto-inspired Coin Rush), to the downright controversial (check out the political pundits of Race for Office). One of the stand-out features of CryptoSlots – the Provably Fair million dollar jackpot – is tied in with one such unique slot: Jackpot Trigger. Want to be a millionaire? You will have to visit to take a spin.

What does the future of online casinos look like?

Given the evolving nature of our digital world, in order for online casinos to remain secure but also exciting, they also have to evolve. The blockchain opens many doors to those wishing to meet the needs of modern players. Provably Fair, anonymous play, crypto payments – all of these go into the making of a stellar casino. CryptoSlots’ uniqueness pushes it to a cut above the rest. CryptoSlots is open to players globally, accepting Bitcoin, Bitcoin Cash, Litecoin, and Monero. Only an email address is required to sign up. Players must be 18+ to play. Withdrawals are processed daily, deposits credited instantly. Newsletters and promotions are updated regularly, offering lucrative match bonus deals for all players.

Article Produced By
CryptoCompare

https://www.cryptocompare.com/spend/guides/why-are-players-choosing-cryptoslots-over-other-casinos/

Heiko Closhen, Entrepreneur

Waterloo residents have lost 430K to crypto scams this year

Bitcoin scammers have thus far proven to be unstoppable in Canada.

Waterloo, Ontario is the first Canadian city to issue a general warning after 78 residents were duped by crypto scammers in 2020.

According to Global News, Waterloo residents have lost more than $430,000 so far this year, with 29 of the 78 falling victim in July alone.

As previously reported, fraudsters have been impersonating government officials, asking victims to deposit money in various Bitcoin (BTC) ATMs under the threat of legal ramifications.

Scammers told one resident that more than 25 bank accounts had been opened under his name, and then used to launder money. He was instructed to deposit over CAD $10,000 in various BTC cash machines to resolve a fake legal warning related to the supposed allegations.

The increasing number of cases encouraged the Waterloo Regional Police Service to launch a “Fraud Awareness” campaign in an effort to prevent people from falling victim to these scams.

The Canadian Anti-Fraud Center also released figures related to Bitcoin-related telephone scams, seemingly confirming the authorities findings. In the first seven months of 2020, the center received 23,655 reports of fraudsters calling victims to ask for Bitcoin payments.

Jeff Thomson, senior intelligence analyst of the Royal Canadian Mounted Police, told Global News:

“We did see a dip in these calls through April and May, but as things have come back online, we’ve seen a great increase in scam calls.”

However, he clarified that not all the people who reported such scam calls had lost money. Some were prevented from engaging with the scammers by the authorities, though no figures relating to prevention were provided.

Thomson also said that the Canadian Radio-television and Telecommunications Commission is working to trace the calls performed by the scammers.

 

written by Felipo Erazo

https://cointelegraph.com/news/waterloo-residents-have-lost-430k-to-crypto-scams-this-year

Heiko Closhen, Entrepreneur

Central banks are into digital currencies more than ever

Central banks are into digital currencies more than ever

Central banks are into digital currencies more than ever

By Robert Stevens

"Sentiment analysis" on CBDCs suggests that central banks are becoming more open to minting their own currencies. A slew of projects backs up that assessment.

In brief

  • Central banks have more positive things to say about digital currencies than ever before.
  • That's according to a new report by the Bank for International Settlements.
  • More and more governments are starting work on CBDCs.

Central banks are talking about digital currencies in greater numbers than ever. And what’s more, many even like the idea of making their own central bank digital currency, or CBDC, according to a report by the Bank for International Settlements, published today. The days of the state-rolled crypto edge ever nearer.

Per BIS’s report, the number of speeches on digital currencies has ballooned over the past few years. And while central bank governors and board members used to be sceptical (or downright dismissive) of the technology in their speeches, their tone has changed.

“In fact, there have now been more speeches with a positive than a negative stance,” said the BIS, pointing to a sentiment analysis of all the speeches of 175 central banks. That’s a recent development: Around mid-2018, there were roughly four negative speeches for every positive one.

Central banks aren’t just talking about CBDCs. They’re actively studying them. As of mid-July 2020, the BIS found that at least 36 central banks have published work about CBDCs. 

At least three countries have completed a pilot for retail CBDCs (those intended for public distribution, akin to digital cash), and six more projects are ongoing. Another 18 have published research about retail CBDCs, and 13 more announced they’re researching or developing wholesale CBDCs (those that would be used by banks to cut costs and increase transaction speeds). 

The true number of central banks considering the technology is far greater. According to a January report, the BIS found that 80% of the world’s central banks are thinking about it. 

Just last week, Brazil’s central bank announced that it had formed a working group for a CBDC, which it thinks could “improve the current model of commercial transactions between people and even between countries.” The 12-person team tasked with researching a Brazilian CBDC will file a report to the central bank in six months. 

A week earlier, a governor at the US Federal Reserve announced that the Fed has partnered with MIT researchers to build and test a CBDC. 

Although most CBDCs are still in their infancy, there’s a reason governments are working toward them, said Gregory Klumov, CEO of Stasis, a stablecoin pegged to the Euro. He told Decrypt the benefits of CBDCs are numerous: “On-demand, irreversible, immutable, auditable, almost-instant transactions. Like cash but better as the cost of counterfeiting is sky-high [and therefore] economically unviable.”

The benefit to governments, specifically, he said, is that it “disrupts clearing, custody and settlement—services that became oligopolized [by commercial entities].” 

Right now, however, there’s an emerging divide governing which countries are exploring CBDCs. In a systematic review of 175 countries, the BIS found that a jurisdiction’s interest in CBDCs “is strongly associated with higher mobile and internet use, a higher innovation capacity, an existing or planned [fast payment system] and greater government effectiveness.”

Article produced by Robert Stevens

https://decrypt.co/39684/central-banks-are-into-digital-currencies-more-than-ever

 

ecosystem for entrepreneurs

Heiko Closhen, Entrepreneur

Blockchain tech’s multipurpose role in driving global advancement

Blockchain tech’s multipurpose role in driving global advancement

Blockchain tech's multipurpose role in driving global advancement

By JOSHUA ESAN

With globalization progressing rapidly across all industries, let’s look at how blockchain tech is implemented in global advancement worldwide.

Since the advent of blockchain technology in 2008, we have seen an ongoing sense of fortune, and several industries have been, and still are, grateful participants. The enormous boom will undoubtedly cause many other businesses to come aboard this train and completely step up their operations.

 

Food industry

Blockchain tech in the food industry will make the process of food production, distribution and storage are completely transparent. The decentralized ledger system will provide easy access to vital information about the food product you are buying, from when it was grown to when it reached the market and how long it has been stored.

A study conducted by Walmart shows how the digitization of the food supply chain would reduce the risk of infected foods getting to consumers. Walmart partnered with IBM to develop a Hyperledger system to store all information about its two test products: mangos and pork. The result demonstrated a food system with increased fresh food and minimal waste. Frank Yiannis, vice president of food safety at Walmart, said the following about the study:

“With blockchain, you can do strategic removals, and let consumers and companies have confidence. We believe that enhanced traceability is good for other aspects of the food systems.”

 

Voting

The traditional ballot system has existed and served its purpose for years, but it’s safe to say it has outlived its time. The digital voting system was brought on some years back to replace the paper ballot style, but it isn’t clear how it is safer, especially with lots of hackers on the prowl. So, how can blockchain technology help? Remember, the aim is to make the process as transparent and secure as possible.

With elliptical curve cryptography, voters can create two keys — private and public — to cast their votes. The public key is revealed to a verifier that certifies it, while the private key is registered anonymously and used to pass ballots and sign off during elections. Once this is done, anyone can determine if the signature is right or wrong using the public key. This is how blockchain can provide an easier and better way to vote.

ecosystem for entrepreneurs

Data sharing

If there is any lesson to be learned from the 21st century and the six months of lockdown we’ve witnessed globally, it is the pace at which the world has gone digital. With many companies, researchers and individuals constantly looking to exchange information securely, blockchain adoption for data sharing is inevitable.

While the widely used methods of exchanging data are laden with many flaws, blockchain boasts of a tightly secure peer-to-peer exchange of information that is independent of a third party. For example, Ideology, an open-source blockchain project on Ethereum, is a platform for entrepreneurs, engineers, artists and scientists to exchange, review and monetize ideas freely.

 

Medicine and pharmaceuticals

Up to $200 billion is lost annually due to fake drugs and other misdoings in the pharmaceutical industry. Blockchain technology can potentially revolutionize pharmacies the world over by taking over supply chains.

The distributed ledger system is also well in line with the United States Food and Drug Administration’s Drug Supply Chain Security Act requirements. Undoubtedly, it would significantly reduce the prevalence of substandard and counterfeit drugs, as every drug can be effectively monitored from production to the end-stage.

 

Cybersecurity

Cybersecurity breaches and attacks are as old as the internet, and we have borne witness to quite significant ones with billions of pieces of personal information and resources stolen. Most of these breaches are a result of human vulnerability to phishing. A blockchain system can help prevent these attacks using cryptography — a sophisticated security network that uses a set of algorithms to encrypt and decrypt data.

Certainly, blockchain has come to stay, and many industries have realized this. It will be exciting to see how more industries adopt the technology in the post-pandemic era.

Article produced by JOSHUA ESAN

https://cointelegraph.com/news/blockchain-tech-s-multipurpose-role-in-driving-global-advancement

 

ecosystem for entrepreneurs

Heiko Closhen, Entrepreneur

DLT tracking partnership to fight fake diamonds in China

DLT tracking partnership to fight fake diamonds in China

DLT tracking partnership to fight fake diamonds in China

By TURNER WRIGHT

Everledger’s partnership with JD.com will allow buyers in China to purchase diamonds knowing their origins.

DLT supply chain firm Everledger is partnering with local Chinese diamond sellers to ensure customers only receive genuine gemstones.

In an Aug. 25 announcement, Everledger, a global digital registry for diamonds, said it would be working with Chinese e-commerce giant JD.com as well as the Gemological Institute of America (GIA) to implement a distributed ledger technology (DLT)-based supply chain capable of verifying the authenticity of individual stones.

Due to the restrictions imposed on businesses during the pandemic, many buyers have turned to purchasing diamonds online, where it’s difficult to assess the quality and authenticity. In China, “digitally competent millennials” reportedly buy up 68% of all diamonds sold online, compared to 45% around the world.

Everledger — powered by Hyperledger Fabric — uses grading reports provided by the GIA to assess diamonds via the Chinese e-commerce company’s JD Chain, an anti-counterfeiting and tracing blockchain, so customers can purchase a stone with information regarding its origin, color, clarity, carat weight, and previous owners. According to the DLT firm, this process will allow JD.com to spot instances of fraud more effectively, including duplicate uses of GIA reports.

ecosystem for entrepreneurs

Everledger was founded in 2015 with the goal of solving the issues created from the purchase of conflict diamonds — stones typically mined in a war zone and sold to finance oppressive regimes.

The supply chain firm is not the only one to see the potential of diamond buyers in the Chinese market. Cointelegraph reported in December that the world’s largest diamond mining firm, Russia’s Alrosa, partnered with Tencent, the operator of WeChat, to allow the app’s one billion users to purchase diamonds online.

Some of the largest players in the diamond industry have already collaborated with blockchain-based platforms to introduce DLT solutions so customers can purchase conflict-free, authentic stones.

In 2018, the De Beers Group — the corporation that invented the concept of the diamond engagement ring — announced it was looking into blockchain to improve the transparency of the diamond value chain. The same year, major Hong Kong-based retailer Chow Tai Fook joined the Everledger project to boost the sales of its T MARK line, in which diamonds were inscribed with traceable codes so that their origin could be checked.

Article produced by TURNER WRIGHT

https://cointelegraph.com/news/dlt-tracking-partnership-to-fight-fake-diamonds-in-china

 

ecosystem for entrepreneurs

Heiko Closhen, Entrepreneur

Market Wrap: Bitcoin Hits 118K Ethereum Gas at All-Time High

Market Wrap: Bitcoin Hits $11.8K; Ethereum Gas at All-Time High

bitcoinaug24

The bitcoin market is experiencing low volume Monday but ether continues to fuel DeFi’s growth.

  • Bitcoin (BTC) trading around $11,737 as of 20:00 UTC (4 p.m. ET). Gaining 0.34% over the previous 24 hours.
  • Bitcoin’s 24-hour range: $11,592-$11,823.
  • BTC above its 10-day and 50-day moving averages, a bullish signal for market technicians.

Bitcoin trading on Coinbase since August 22.

Bitcoin’s price opened the week heading higher, hitting $11,823 on Monday before dipping lower. “Bitcoin has settled into a consolidation position at $11,700,” said Daniel Koehler, liquidity manager at cryptocurrency exchanges OKCoin. “It appears that traders are waiting for better fills at $11,000,” he added.

Bitcoin spot trading on Coinbase the past two weeks.

Darius Sit, managing partner of quantitative trading firm QCP Capital, expects the final full week of August to be quieter than earlier in the month, when the world’s oldest cryptocurrency hit a 2020 high of $12,485 on spot exchanges like Coinbase. “One thing we were looking at is that August tends to be a weak month for both BTC and ETH,” said Sit. “So if that seasonality plays out, this last week of August might see some weakness.”Spot volumes on major BTC/USD exchanges Monday are low. For Luxembourg-based Bitstamp, for example, it was just $27 million, well below its $91 million daily average.

Spot volumes on major USD/BTC exchanges.

Interestingly, there are more addresses now with 1,000 or more bitcoin than ever before. The count of those on the “Bitcoin Rich List” has reached a high of 2,190. Those addresses hold nearly 7.87 million BTC, the equivalent of $92.2 billion. Nonetheless, many stakeholders who are usually bullish are expecting some retrenchment from bitcoin’s price gains, including Rupert Douglas, head of institutional trading for digital asset broker Koine. “We’ve come a long way quickly. I wouldn’t be surprised by a pause or a pullback,” Douglas said. OKcoin’s Koehler echoed that sentiment. “Momentum is still signaling bullish, but it’s unclear if we should test the $10,000 breakout area before moving higher,” said.  Douglas also noted ether (ETH) continues to steal bitcoin’s spotlight. “Overall, ETH is stronger and I think will continue to outperform BTC,” he said. 

Into the ether

Ether, the second-largest cryptocurrency by market capitalization, was up Monday, trading around $401 and climbing 2.1% in 24 hours as of 20:00 UTC (4:00 p.m. ET). 

The amount of “gas” used, denoted in gwei, worth 0.000000001 ether on the Ethereum network, hit an all-time high Sunday, reaching 79,294,213,632 gwei, according to aggregator Glassnode. A unit of measure to execute operations on the network, gas is used within Ethereum to conduct transactions or use smart contracts. The record amount of gas used is viewed as a sign that Ethereum’s utility for decentralized finance, or DeFi, is higher than ever.Total gas used on Ethereum since the network launched in 2015.

However, George Clayton, managing partner of Cryptanalysis CapitaI, has concerns whether Ethereum’s heavy usage can be sustained given that average fees for using the network have gone as high as $6.68 in August. “I think the gas issue is leaving Ethereum vulnerable,” he said, “vulnerable to competing smart contract public blockchains. Something has to give.”

Other markets

Digital assets on the CoinDesk 20 are mostly green Monday. Notable winners as of 20:00 UTC (4:00 p.m. ET): 

  • tezos (XYT) + 5.5%
  • bitcoin sv (BSV) + 3.7%
  • monero (XMR) + 2.4%

Notable losers as of 20:00 UTC (4:00 p.m. ET):

  • qtum (QTUM) – 5.3%
  • basic attention token (BAT) – 4.2%
  • decred (DCR) – 3.1%

Equities:

  • Asia’s Nikkei 225 ended the day up 0.28%, led by Nintendo, which rose 4.79%. Concerns over the health of Japan’s prime minister damped sentiment.
  • Europe’s FTSE 100 closed in the green 1.7% as optimism for a coronavirus vaccine treatment boosted the index.
  • The United States’ S&P 500 gained 0.80%, hitting an all-time high thanks to stocks in the tech and travel sectors.

Commodities:

  • Oil is up 0.29%. Price per barrel of West Texas Intermediate crude: $42.39.
  • Gold was in the red 0.64% and at $1,926 as of press time.

Treasurys:

  • U.S. Treasury bonds all climbed Monday. Yields, which move in the opposite direction as price, were up most on the two-year, in the green 8.4%.

Article Produced By
Daniel Cawrey

As Senior Markets Reporter, Daniel Cawrey is helping lead coverage on the new and innovative digital asset global markets. Who is investing in cryptocurrencies? How are funds and information moving between various companies and people? He is also co-author of the upcoming “Mastering Blockchain” book to be published by O’Reilly Media.

https://www.coindesk.com/market-wrap-bitcoin-gas-high

Heiko Closhen, Entrepreneur

Australian Conman Extradited Over Alleged Fraud Involving 12M in Bitcoin

Australian Conman Extradited Over Alleged Fraud Involving $1.2M in Bitcoin


After a dramatic arrest, an Australian serial conman has been extradited to New South Wales to face fraud charges involving over $1 million in bitcoin.

  • A Tuesday report by The Sydney Morning Herald said Peter Foster had been escorted by detectives to Sydney, NSW, from Queensland where he had been arrested Thursday.
  • Foster was tackled by undercover police pretending to be early morning joggers on a Port Douglas beach in the northern state.
  • After an investigation that kicked off in June, police alleged that from April last year Foster masqueraded under the false name Bill Dawson and scammed victim Konstantinos Stylianopoulos.
  • Stylianopoulos had entrusted bitcoin to Foster, who then allegedly transferred it to his own account at the Australia-based crypto exchange Independent Reserve.
  • The fraud netted Foster 1.73 million Australian dollars (US$1.24 million) worth of bitcoin in transactions of between $125,000 and $890,000 on multiple occasions.
  • Foster has been described as a career criminal, having previously spent time in jail in Australia, the U.K., the U.S., and Vanuatu for fraud-related crimes.
  • Paul Dunstan, the Sydney City Police area commander detective acting superintendent, noted Foster's repeat offenses and said Foster was "a significant fraud offender."
  • The charges relating to his arrest include five counts of publishing false and misleading material to obtain advantage and 10 counts of dishonestly obtaining financial advantage by deception.
  • He is also being charged with knowingly dealing with proceeds of crime with intent to conceal, according to the Herald.
  • On Tuesday, Foster's legal representation appeared in Sydney's Central Local Court via video link opting not to apply for bail. The case will return to court on Oct. 22.

Article Produced By
Sebastian Sinclair

Sebastian Sinclair is the market and news reporter for CoinDesk operating in the South East Asia timezone. He has experience trading in the cryptocurrency markets, providing technical analysis and covering news developments affecting the movements on bitcoin and the industry as a whole. He currently holds no cryptocurrencies.

https://www.coindesk.com/australia-conman-extradited-fraud-charges-alleged-stolen-bitcoin

Heiko Closhen, Entrepreneur

CoinDesk columnist Nic Carter is partner at Castle Island Ventures a public blockchain-focused venture fund based in Cambridge

CoinDesk columnist Nic Carter is partner at Castle Island Ventures, a public blockchain-focused venture fund based in Cambridge,

    

Mass. He is also the cofounder of Coin Metrics, a blockchain analytics startup.What was once an idle supposition is now concrete.

Public blockchains are destined to privilege the largest, most fee-tolerant transactions, at the expense of non-financial uses. When a robust block space market emerged on Bitcoin in 2017, some wrote it off as an aberration, believing the future was #FeeLess. Since then, Bitcoin’s bite-the-bullet approach to fees has taken hold: low-fee chains have suffered from bloat and irrelevance, and the second-most valuable blockchain, Ethereum, has effectively embraced the reality of meaningful fees. This heralds a shift in how major blockchains are perceived, moving away from generic computation layers and towards their destiny as financial infrastructure.

The logic for this shift is simple. Satoshi included the combination of fees and the blocksize cap in Bitcoin as both an anti-spam mechanism (to prevent the injection of arbitrary amounts of data that would make the chain impossible to validate) and as a method to compensate miners in the long term. Satoshi envisioned a future where fees alone would support miners, after the subsidy had run out. Today, that doctrine is largely unchanged; Bitcoiners still expect fees to eventually grow to 100 percent of miner revenue. (Bitcoin miners currently make 9.7% of their income from fees, according to Coin Metrics.) Capped block space is critical to make this work. In a finite system, transactors are willing to pay up for inclusion in a block. In uncapped alternatives, fees are effectively zero – and one can imagine that these chains will be forced to rely on perpetual inflation to finance security, or fall back to permissioned validators.

Aside from paying for security and warding off perpetual inflation, fees have additional emergent impacts. Effectively, they force transactors to think hard about what they are using the blockchain for. This encourages higher-value transactions and discourages frivolous use cases. In fee-bearing blockchains like Bitcoin, marginal, spammy, or non-monetary usage simply gets priced out over time. As Bitcoin Core developer Greg Maxwell says, there is infinite demand for highly-available perpetual data storage. As a result, low-fee alternatives become great big garbage patches. If you imagine fees as attaching a weight to transactions, you can see how fee-bearing transactions would force out more marginal ones from the auction for block space, like a lead weight displacing water from a bucket.In fee-bearing blockchains like Bitcoin, marginal, spammy, or non-monetary usage simply gets priced out over time.

One great example of this displacement is Veriblock. Veriblock is a protocol which bids a fixed amount of its token, VBK, for Bitcoin block space. At its peak Veriblock transactions accounted for more than 30% of Bitcoin transactions. But, as Bitcoin fees perked up in May 2020, and VBK fell in value (and hence so did the amount of BTC it was bidding for block space), Veriblock transactions were squeezed out. Ordinary Bitcoin transactors ultimately outbid the more fee-sensitive use case.Consequently, many Bitcoiners believe that, in the long term, the base layer will come to resemble Fedwire or CHIPS, large-scale settlement networks with large average transaction sizes. This has been the working assumption among developers for a long time on Bitcoin, and it’s part of the reason why Bitcoiners speak derisively of SatoshiDice and coffee payments: They don’t expect these would be suitable for base-layer transactions at maturity. You don’t send a wire transfer to pay for a stick of gum; payment methods are a function of your convenience and settlement needs.

On Ethereum

Mirroring Bitcoin’s high fee epoch in 2017, Ethereum has witnessed in 2020 the emergence of a healthy block space market. Driven by the popularity of stablecoins (most of which rely on Ethereum as the underlying infrastructure) and the rapid growth of DeFi, Ethereum fees have skyrocketed this year, peaking at 60% of miner revenue. Transactors on Ethereum paid $8.6m in total fees on Aug. 13, with per-transaction costs coming in at a median of $3.60.

Vitalik Buterin once stated in reference to Bitcoin that “the internet of money should not cost 5 cents a transaction.” It’s safe to say his attitude to fees, and that of Ethereans more broadly, has moderated with time. Delays in ETH 2.0, a growing understanding that unlimited block space has negative externalities, and a newfound appreciation for fees as the backstop of a potentially deflationary force have caused many Ethereans to embrace a higher-fee world.The explosion of new liquidity mining opportunities on DeFi and the continued growth of crypto-dollars have priced out other use cases on the platform. The cost to deploy complex contracts has skyrocketed to hundreds of dollars in some cases. Today, a user sending a multi-million-dollar Tether transaction will most likely outbid someone deploying an Aragon DAO or minting an NFT. 

This is sobering for some Ethereans, as it has punctured some of the more expansive visions of what Ethereum could become – at least in its present form. With high fees, the most economically dense transactions come to occupy block space to the exclusion of all else.Ever since the departure of the big blockers, Bitcoiners have made their peace with this, prioritizing a layered approach in which the base layer is reserved for larger settlements. Bitcoin scales not by increasing the available supply of block space, but by minimizing the quantity of data registered on chain. Lightning scaling amortizes potentially thousands of transfers into a handful of on chain transactions. 

Meanwhile, physical bearer instruments like Opendimes are funded once but can be passed around arbitrarily many times. Sidechains like Liquid hit mainnet for pegs in and out and thereafter allow asset issuance and transfer off chain. Even exchanges and custodians – many of which allow “on-us” transfers between users solely on their own database – can be understood as trusted sidechains. If exchanges move from a real time gross settlement model to a net settlement model, yet more block space will open up. The commonality here is the introduction of deferred settlement to save on fees (by bundling many off-chain transactions together) and winning efficiencies.

Keep in mind, the above methods rely on an array of trust models, and they are not all equivalent to base-layer bitcoin transactions. But this is how payments work: some high-assurance payments require immediate final settlement, whereas in other cases users are content with deferred settlement. In fact the latter is often preferred, because deferred settlement introduces efficiency and allows for recourse if something goes wrong. The important thing is that bitcoin users have the option of making a base level transfer should they need to.Today, a user sending a multi-million-dollar Tether transaction will most likely outbid someone deploying an Aragon DAO or minting an NFT.

It’s critical to understand that large-scale block space consumers have a strong incentive to minimize their footprint if wastefulness leads to higher fee liabilities. The rigidity of the blocksize and vibrant block space market means that Bitcoin punishes profligacy. This is why providers like Coinbase have latterly come to embrace space-saving measures like batching, after several years of demurral. Batching reduces the average size of a payment by incorporating many payments into a single transaction (which has a fixed cost in terms of bytes).

Ethereum’s relationship with fees is more complicated. Ethereum 2.0 is a specter that might produce a superabundant quantity of block space, although the execution of this vision remains in doubt. Ethereum itself is far more malleable in its key properties than Bitcoin, with the supply of available block space constantly changing. Increasing the gas limit effectively socializes transaction costs from users to node-operators who must shoulder a costlier validation burden.

Perversely, increasing block space means that heavy users have a reduced incentive to optimize their usage. The Ethereum technical community has devised multiple deferred settlement systems that could reduce the mainchain data impact of transactions, many of them falling under the ‘rollup’ designation. But for industrial consumers of block space, lobbying the developers or miners to increase the gas limit might prove cheaper than rearchitecting their backend to be more parsimonious. 

In a sense, the willingness of the protocol architects to rapidly iterate on the core protocol parameters makes investing heavily in efficiency-enhancing processes less attractive. And the looming prospect of massively abundant block space threatens to derail this newly pragmatic attitude. Ethereum must choose between two visions: the low-fee, endlessly creative and resource intensive world computer, or the more economically dense financial settlement network.

Article Produced By
Nic Carter

https://www.coindesk.com/ethereums-fees-mean-choosing-between-a-world-computer-and-a-financial-network

 

Heiko Closhen, Entrepreneur