TokenPay Announces Its Successful acquisition Of German Bank

TokenPay, a decentralized and self-verifying payment platform project, announced that it had officially closed a deal with German bank WEG in Berlin.

Share certificates representing 9.9% of the equity interest in WEG Bank AG have been transferred to TokenPay Swiss AG, along with options to acquire an additional 80.1% of the bank upon customary regulation approval.
In the announcement by TokenPay, it was declared that the proceeds of this transaction were derived from the firm’s December 2017 token sale.

“Today we are announcing that we have officially closed a deal with WEG Bank AG, located in Germany.”

#TokenPay Announces Acquisition of 9.9% of WEG Bank AG in Germany with Option to Acquire an Additional 80.1% upon Approval.🔥Full Details Here: https://t.co/FV3u0tjEoi$TPAY#TPAYpic.twitter.com/bGmuEvcXmu

— TokenPay (@tokenpay) 9 May 2018

According to TokenPay’s white paper, acquiring banks was stated as an eventual end.

The start-up said, “We were approached by WEG Bank in December 2017. The bank has an interest in offering FinTech solutions that will align itself with the new economy, while at the same time continuing to service its existing real estate client base in a traditional fashion. Our leading technology complex is what ultimately afforded us the opportunity to be selected by the bank for this partnership.”

TokenPay stated that they have recently been approached by a bank in Lichtenstein with a similar type of proposition. The tokenPay team is planning to meet with the bank in June and to form a Similar Partnership with the one formed with WEG Bank.

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The Big Blockchain Lie

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  •  

    The way I see it, Roubini scalds a specific technology for the manner in which some ‘initiates’ have chosen to use it.
    Not that different from blaming a gun for the murder in which it was used…

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  •  

    Why did you use a source that was four years old when talking about the wealth imbalance in bitcoin? Did you use four year old information in your presentation to the committee?

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  •  

    The fact of the matter is that people who spend more time researching blockchain and genuinely working to understand Bitcoin and other cryptocurrencies, are as a rule, more likely to believe in it. It’s not easy to understand. I have experience in finance (M&A) and consulting, an MBA from a top tier program, I’m a tech entrepreneur, and admittedly I was skeptical about cryptocurrency and blockchain for months before finally conceding that Bitcoin really is pretty much inevitable. It’s a logical progression in the state of technology. If you’re looking for an expert, talk to a technologist, NOT a finance or economics professional. That should be obvious.

    The resistance we’re seeing from the powers that be (if you work for one, consider your bias) is exactly what we saw with the Internet, to a comedic level, with mainstream pundits and financial analysts (who are not technologists) feeling insecure about their failure to understand the power of such a new and disruptive phenomenon. It’s true that the “I’m right and you’re stupid” argument is not an argument at all, but it doesn’t matter. Such arguments are an unfortunate result of the people who DO understand this stuff growing tired of the talking heads. They (we) shouldn’t be so dismissive, but it’s very frustrating to argue with people who haven’t done the same work involved in learning the technical details.

    I know that I, for one, have no doubt in my mind that Bitcoin will eventually be globally adopted, leading the way as it has for many other cryptocurrencies as well. It sucks that so many smart people are taking so long with the uptake, albeit unsurprising. It takes a certain amount of humility to get on board with this stuff, which is in short supply in both financial and academic arenas. There’s no need to be fearful or defensive. It’s a wonderful develop that will usher in a new era of human progress, and once the detractors find a way to get over themselves – look beyond their egos – they too can participate and be rewarded as early adopters.

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  •  

    This is the point that Roubini is fed up explaining in detail and support with data his claims and goes for the “Dont you get it stupid??” technique…:)
    Thats not to say i disagree with anything that he says about the subject.(coins and blockchain)

    •  

      I am no fan of Bitcoin (see my other comments). However, Roubini hasn’t troubled himself to learn the subject. Comparing blockchain to a ‘glorified spreadsheet’ shows that Roubini hasn’t done his homework.

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  •  

    Again, you are funding your arguments on Bitcoin and POW-based cryptocurrencies. Furthermore your comparison that it is nothling more than an Excel spreadsheet is cynical and shows that you fail to be open to the good site of blockchains. Human beings in India, South Africa or other countries with masses of rural population without access to a bank account are given the chance to use their smartphone as a means of storing and trading value. Of course there are hurdles to overcome, but why should we dismiss this chance to improve the life of alot of people just because in our western world you see no benefit in using blockchain? To you its just an Excel spreadsheet, to alot of other people it can be a step closer to financial freedom.

    •  

      “hurdles to overcome” There is much more scalable and proven technologies in centralized bank technologies that could be implemented with essentially less hurdles. Overcoming these hurdles of central banking, and governing would also ensure that these countries progress into more stable moral regulated economies.
      Your premise is that Bitcoin would be similar to using your phone for payment, but the currency is massively different then using a credit card. For the most part no one really uses bitcoin yet to actually buy physical goods. If you ever did, the price of physical goods would need to constantly change due to the change in the coins. These prices aren’t just figured out automatically, usually when you go to a store there is 1 price that is listed with a paper tag. So if you want to grab 10 items but really you have no idea what they are going to charge you, you can discuss back and forth for awhile and ensure the value of 0.00025 bitcoin for spice, or 0.00033 for milk is a good deal and then proceed. At some point you most likely will be charged ₹14600 rupees for masala ingredients because the vendor can get away with it. This isn’t more convenient or stable then dealing in cash of fiat. Bitcoin allows more immoral dealings as well as ensures any decrease of corruption or an increase in equality and quality of life.
      Those countries need a stable, regulated and liable governing body. This would lead more honesty and stable and available currency and economy leading to an increase in quality of life. Pyramid schemes dont increase quality of life for many.

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  •  

    While this arguement is valid for a few cryptocurrencies, it does not apply to all blockchain-based cryptocurrencies. Some cryptocurrencies do not need miners (pre-mined).

    •  

      “Crypto-currencies” that do not use computationally complex mathematics ie. “mining” do not solve the double spend problem. Ie. The incentive to attack is not guaranteed to be less then the incentive to create. Thus these are essentially not Crypto-currencies they come more closely to an asset such as Pokemon and utilize peoples hype and ignorance as thier “value”. This is completely and mathematically 100% true.

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  •  

    For the record, I am no fan of Bitcoin or any other cryptocurrencies. For a long list of reasons, I have no sympathy for these ‘innovations’. However, much of this article is a mindless rant.

    “A few self-serving white men (there are hardly any women or minorities in the blockchain universe)”

    Using ‘white’ and ‘men’ as four-letter words may be PC. However, it will (rightfully) alienate billions of people who (rather strangely) don’t like being discriminated against. Racism and bigotry are bad, even if they are directed against the universal ‘villains’ of the SJW/cultural Marxist left.

    Of course, China accounts for 60-75% of global Bitcoin mining. So much for dominance by ‘self-serving white men’. Apparently, the truth and Roubini don’t play nice.

    •  

      Blockchain is an elegant piece of technology that does something very complicated very well. It therefore offers the potential to reduce the necessity and power of centralised intermediaries and platforms. Roubini takes issue with the distributed ledger technology and propounds a contrarian view of the technology based on the wild fluctuations on crypto valuations. Well, money as a store of value has been continually evolving from direct barter to indirect stores of value. There was no paper money before the seventeenth century, credit cards are only 70 years old, mobile payments less than 10. They is no reason not to think that this process of evolution will not continue. In fact, decentralisation could be the Goliath slayer that most platform intermediaries like banks in finance, social networks in information exchange and utilities in the energy sector fear. Yes cryptos are volatile and their value is down, but so what? The fact they exist is a threat to the status quo.

      •  

        And the fact it is a threat to the status quo may be a clue as to why so many vociferous rants surface from generally well educated individuals who seem to be ignorant and mischaracterise the phoenomenon.

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    •  

      @Peter,
      Missed the China vs white men thing. Nice catch!

      •  

        CM, “Missed the China vs white men thing. Nice catch!”. Thank you. The “self-serving white men” line is both wrong and irrelevant to Roubini’s comments. However, it does show the degree to which bigotry and racism have been mainstreamed by the PC/SJW/Cultural Marxist left.

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  •  

    There are some misleading facts in the article as pointed out in many comments. My mind is sceptical in general concerning digitalisation of our lives, admitting also life gets easier in many aspects, but also more risky of our data, exposed in any form (blockchain, server or any other way to store and securely transact data).
    Blockchain technology could be used for good uses. I work partially in value chains and Governments certifying things, so was thinking blockchain could certify the cow, the slaughterhouse and basically run throughout the value chain until the consumer. Blockchain can secure that the consumer has meat on the table which satisfies legal requirements, bio, ethical or whatever the programmers then put into it. Think also about any security in value-chain management, and much more. But blockchain is just one of the many options out there to secure our digital life, nothing less, nothing more.
    Cryptocurrencies is another story, should be put on separate track. It is indeed an illusion money, but same time with more and more real world applications (pay taxes for instances!), it became already real. As said i was sceptical, but looking objectively at cryptocurrencies (the good ones, not the scam), I couldn’t find anymore differences to money administered by central banks, as their money as well is now disconnected from gold parity (so no more value, except some paper with numbers on it). The value of USD and EUR for instance is just pegged to a an assumed, but fictious real market value which could collapse as fast as any cryptocurrency (see the financial crisis 2008/2009). So “real value” made more damage than crypto yet. With money, what needs to be addressed is speculation, meaning the gambling with money from others … banks, insurances, asset managers as crypto managers and many more … that’s the plague …

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  •  

    Si au moins les mineurs étaient plusieurs (au moins 8) à valider une transaction, pour éviter (tuer) la spéculation …

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  •  

    When the Scholar is Angry

    I just read, a week after publishing, The Big Blockchain Lie, by Nouriel Roubini on the often thought-provoking if sometimes bland and sometimes self-congratulating Project Syndicate.

    I was surprised by the angry and poorly supported rant from a thinker who, generally, I find cooler and more balanced that like-minded opiners such as Joseph Stiglitz or Yanis Varoufakis. If he wanted to create controversy, though, it was a good play, with seventy-nine comments so far, six of them while I write this piece.

    Rather than going after each unsubstantiated jab, which I may do separately in my blog, let me stick to the panoramic view of this article.

    Is there a bloodbath? You might say so judging by the standards of traditional assets with clear established prices that are the promise to deliver a static and clearly stated underlying good. However, if one thinks cryptoassets are in the process of price discovery, oscillations might not be such a surprise. Think of the present as the first few minutes of the Big Bang and consider how behavior deviates from standard physics in this environment. Some “retail” investor likely lost some money, sure, but this is far from rational evidence of a scam.

    I deride blockchain lovers in Coffe Talk(https://claudiomigliore.wordpress.com/2015/03/16/coffee-talk/), but I have a hard time believing Mr. Roubini buys his own claim that a blockchain is just a spreadsheet. By that measure, penicillin is just random mold and the internal combustion engine just arson inside some iron ore block. The concept of blockchain, though far from the final, winning representative of crypto-value structures, is a genial construct that offers opportunities to coordinate and therefore enhance human activity in ways we cannot completely imagine yet. Claiming the contrary is disingenuous and, from an accomplished academic, suspect.

    The spectre of monopoly, centralization and manipulation is real. I pointed out in Another take on what makes a good cryptocurrency (https://claudiomigliore.wordpress.com/2017/11/20/another-take-on-what-makes-a-good-cryptocurrency/) some problems with bitcoin as Satoshi Nakamoto laid out in his seminal paper. Bitcoin has a scaling problem that goes beyond the petty dispute about megabytes. A truly global crypto platform must scale by distributing and not concentrating and it must be able to forget as much as it is able to remember.

    Nevertheless, Mr. Roubini’s arrogant underestimation of the buying decisions of free economic actors is insulting. He assumes mathematicians, financiers and data scientists are regularly duped by very bad hombres in undisclosed unsavory locations. In reality, most crypto holders are highly educated individuals who buy the concept of crypto and use the currencies for their advantage.

    Monopoly and manipulation are unpleasant and not necessarily persistent phenomena and roadkill, though unfortunate, should be viewed in a Shumpeter-like fashion, as part of the creative destruction intertwined with progress.

    No institution under the sun.

    Well, no institution under the sun would have trusted email contracts, digital signatures, telephone conversations for that matter just a few years or decades ago. ‘Nough said.

    Appeal to discrimination.

    I have no time now to reread and find where in the rant the writer regrets the absence of minorities in crypto (he shouldn’t really, if this is such a scam). But this cheap shot is just in line with attributing it all to “greed” a concept that hardly fits with economic science.

    My father used to ask “cui prodest”, perhaps assuming someone who pushes something often does it out of self interest of, as Mr. Roubini would put it, greed. In this case, I wish I knew.

    I might add that it would be appreciated if Project Syndicate would find a more knowledgeable voice to ponder on crypto. There is no dearth of that around.

    https://claudiomigliore.wordpress.com/

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  •  

    most banks “only” have 100k government insurance for a bank acount . so if you own 1million $ bitcoin is more safe as a bank. if you know how to keep your private key private. which is not difficult use a paper and pen.

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  •  

    At its core, a blockchain is an encrypted and immutable linked list, meaning that it is very difficult to insert or delete blocks from it. This difficulty rises as the linked list gets longer. So, blockchain creates an audit trail, but it is not a database and certainly not a spreadsheet. Nor does it need to be distributed (though it can be).

    •  

      Hi Ziemowit, thanks for your comment. It challenged me to put some effort into thinking about this carefully. I agree with you up to the point where you say “… but it is not a database and certainly not a spreadsheet.” I also agree that, in the presence of a trustworthy host, it does not need to be distributed.

      In the following paragraph, I construct an example where a blockchain is represented as a spreadsheet. I would welcome any corrections that you have. If you accept my example, then I think the correct statement is that a blockchain or DL is not just an arbitrary spreadsheet/database, it is potentially much more valuable than that.

      To simplify, let’s consider an undistributed blockchain, so that there is only one trusted host for the data. Suppose we have a consensus mechanism for agreeing which transaction to record. Moreover, suppose we record an initial transaction on a (spread)sheet that the trusted host then signs, locks and, after encrypting it, places it on a publicly available webpage. It seems reasonable to call this sheet, the initial block. Now, when the next transaction is agreed upon, we send the updated sheet to the host who links it to the initial one in such a way that the new record on the new sheet is entered as an injective function on the set of initial values that could have been entered on the initial sheet. (As you may well know, this means that, whenever the initial record is altered, the function’s value will also change.) Moreover, suppose that the host ensures that an alarm will go off (a public announcement) whenever the value of the new record is incompatible with the record of the initial transaction that appears on the new sheet. Once again, the host then signs, locks and, after encrypting it, places this sheet alongside the initial sheet on the same publicly available webpage. Am I wrong in thinking that this is now a second block and that we have nontrivial blockchain? That is, it appears that I have constructed an encrypted audit trail of transactions that are suitably linked and, moreover, one that is immutable (given that it was locked by trusted host).

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  •  

    I see a fallacy here. A speculative bubble and snake oil surrounding a given asset does not invalidate the asset’s intrinsic value and utility. Bubbles can occur wrt new technology due to gaping information asymmetries. And, in such situations, outsize returns will accrue to those who first develop or deploy the technology, which would explain the high Gini ratio.

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  •  

    If Roubini opposes it, there must be someting good about blockchain .

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  •  

    I find it ironic that Project Syndicate advises commenters to be “please be civil and avoid name-calling and ad hominem remarks”, not because this is a redundant statement, but because this is how Roubini operates – emotional appeals that are absent of logical arguments or any genuinely rigorous intellectual inspection of what is objectively and mathematically a ground-breaking and world-changing technological innovation.

    You people are all reinforcing each other’s biases, which won’t make the blockchain phenomenon any less successful in achieving mass adoption, which is already global and very encouraging indeed. Technology doesn’t care what you decide to tell yourselves. As long as there have been banks, there has been corruption and exploitation, and it’s as bad now as it’s ever been. Of course Roubini doesn’t mention this. Central banks are not creating “real” value. Today’s so-called “real money” is nothing more than an outdated mechanism to support the manipulative syphoning of value from the true contributors – entrepreneurs, creatives, and laborers. There’s nothing “free market” about today’s status quo.

    I won’t attempt to explain the cryptocurrency phenomenon, because I get the sense that nobody who consumes stories such as this would be interested in objective truth. Bitcoin alone will have (and is having) as significant of impact on the world as the telephone did in its early stages, and which derives its (very real, despite tantrums) value from a similar mechanism, that is, the network effect. Wikipedia can help understand this very basic idea.

    Rather I’ll defer to an academic who puts all PS contributors, especially Roubini, to shame. His name is George Gilder, and his most recent book, titled “Life After Google” explains the blockchain phenomemon quite well.

    Here’s a video interview with Gilder about his new book:
    https://youtu.be/cidZRD3NzHg

    Best of luck to all of you. Long live self awareness, truth and justice. Down with egomaniacal tyrants. Down with inefficiency and fear mongering.

    •  

      I find it very ironic that you say “Long live self awareness, truth” but you claim things like corruption is as “bad now as it’s ever been”. Which is completely untrue. There isn’t a person in any right mind that would say that just 100 years ago it was less corrupt. What you have said is a lie. Other things your argument twists and swindles actual truth out of saying how “Roubini operates – emotional appeals that are absent of logical” however just because Roubini has a different opinion then you does not make it an emotional and non-logical. Roubini did present logical issues with the current blockchain space, which many even proponents of blockchain systems will acknowledge. Hmm another Lie, from you.
      Other claims that you make such as “Central banks are not creating “real” value” Central banks are securing, insuring and are liable for the safe keeping of peoples earnings.
      In blockchain space you may have a seemingly more complex and thus “valuable” form of currency, however you lose the insurance, and liability. As well as possibly gain nothing in terms of less corruption or increase in civil equality.
      I would say that this is a much more accurate, true and self aware description of a blockchain system.
      Also “down with inefficiency” Blockchain is an extremely in-efficient computational process, it will always be more inefficient then a centralized system could be. Which unfortunately is required to create that “value” that mentioned.
      Long live actual truth, and thorough and self critical self awareness. Not just “truth” in the form of whatever hyped system happens to get alot of spammy press. If you actually cared about self awareness you would realize the spread of the blockchain systems through the news is essentially just to make $$.

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  •  

    Hi, I just see one mistake. The author suggests that the idea of blockchain as a game-changing technology came about as a trick to distract attention from the bad fundamentals of cryptocurrencies. That’s chronologically wrong, and also inverts the cause cause and effect. The fascination with blockchain decorrelated from cryptocurrency, initiated in 2015 and was full tilt already in 2016, it preceded and accompanied the rise of crypto.

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  •  

    I loved this note.

    I just read the New Yorker piece on blockchain “technology” and was as just as baffled about the hype as before. I didn’t understand it (and according to the New Yorker piece many of the blockchain enthusiasts don’t understand it) and don’t understand it as a realistic contracts option for typical transactions—how in hell can it replace a multi-million dollar multi-party loan agreement? I can’t fathom why it has any traction.

    It appears to be the modern too-too-smart-for-their-own-britches uber-techie tulip scam.

    •  

      After my posting my comment yesterday I regretted the judgemental snarky conclusion (which was directed more narrowly at cryptocurrencey.) Since I confess not understanding blockchain I am not in position to pass judgement on it. Moreover, since my post I recalled reading a couple of pieces in the UC Berkeley Haas School alum magazine noting that serious academics are looking into various potential blockchain applications. Maybe there is something to it?

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    •  

      We always love to have our biases against inconvenient truths reenforced. That doesn’t make them accurate. It doesn’t make us any less biased. Indeed, it makes us more biased. How much do you know about psychology – namely cognitive bias?

      You are aware that the new/young talent from both silicon valley and wall street is leaving in droves for well-funded blockchain projects, yes?

      This might be a good starting point for you:
      https://www.ted.com/talks/kathryn_schulz_on_being_wrong?language=en&utm_campaign=tedspread&utm_medium=referral&utm_source=tedcomshare

      Best of luck to you!

      •  

        I’m sorry that you’re unable to fathom it, Don. That’s a bummer. It’s really not that complicated. Anything that can be mocked up on a spreadsheet, can be automated. Try harder!.

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  •  

    I have a lot of respect of Roubini, but this is a low level debate he is hosting here. He doesn’t even define blockchain before criticising it. Is it the encryption aspect of blockchain that he doesn’t like? For, if my hard disk is encrypted and my encryption key is safe, I could indeed “leave it out” for everyone to try and hack and the probability of being hacked would be roughly the same as if it were hidden behind a Pentagon firewall. But perhaps my hard disk is less safe than a Pentagon server: no serious institution would ever allow it’s motherboards to be hardware hacked would they? Yet Business Week has evidence that over thirty have. I think it is reasonable to ask whether Blockchain/DLT can help maintain trust (by users) in markets where hardware could be hacked.

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  •  

    Global Environmentally Friendly Comprehensive Socioeconomic Development must be based on real people, real economics, real currencies, and honest hard work, fueled by enlightened investment, pristine profit and savings, in the context of private-sector led partnerships for development with multilateral and governmental cooperation. Not on fantasy. Some relevant ideas:

    https://www.academia.edu/15092472/Living_in_Peru_-_Peru_in_Copenhagen_Thoughts_on_The_Right_to_Pollute_-_Does_it_Exist_-_2010102701

    https://www.academia.edu/23094646/OFA_At_the_Brink_of_Recovery_or_Conflagration_The_World_at_a_Tipping_Point_2011111506

    https://www.academia.edu/24596360/TRUTHOUT_-_The_solid_wall_between_the_1_and_the_working_poor_in_the_USA_The_perverse_and_persisting_conundrum_of_the_minimum_wage_-_2016041801

    https://www.academia.edu/24438374/Notiagro_Decisiones_consensuadas_decisiones_aletargadas_2010010601

    https://www.academia.edu/21950018/Facebook_-_Staving_off_the_impending_effects_of_unemployment_through_increased_consumption_-_2013031902

    https://www.academia.edu/18040396/Living_in_Peru_-_Uses_and_Limitations_of_Michael_Greene_s_Social_Progress_Index_SPI_for_Development_-_2015102202

    https://www.academia.edu/15077925/The_Formulation_of_Ad_Hoc_Green_Development_Strategies_-_2009082801

    https://www.academia.edu/14174471/The_definition_of_a_nation_in_the_wider_global_context_-_2011110604

    https://www.academia.edu/14174442/La_falencia_de_los_paradigmas_de_gobernanza_post_II_guerra_mundial_The_failure_of_post_World_War_II_governance_paradigms_-_2011100703

    https://www.academia.edu/13947987/La_elaboraci%C3%B3n_de_propuestas_para_el_mundo_de_hoy_-_Junio_24_2005_-_2013010902

    https://www.academia.edu/13062837/La_Reforma_Tributaria_del_Siglo_XXI_The_XXI_Century_Tax_Reform_-_2011100411

    https://www.academia.edu/13062623/Informal_Proof_of_Thomas_Pikettys_Thesis-2014060802

    https://www.academia.edu/12631728/Research_Questions_The_Role_of_Investment_Promotion_Organizations_in_Third_World_Development_-_2008020102

    https://www.academia.edu/14177013/The_new_New_World_Order_-_2009040505

    https://www.academia.edu/12823875/An_idea_set_forth_in_1992_and_written_up_in_1993_A_Partnership_for_Development_with_the_United_States_of_America_-_1993101201

    https://www.academia.edu/12823884/Some_attempts_at_promoting_A_Partnership_for_Development_with_the_United_States_of_America_-_1997031002

    https://www.academia.edu/12823841/Mathematical_Model_and_Simulation_for_A_Partnership_for_Development_with_the_United_States_of_America_-_December_1999

    •  

      Bitcoin is more real than any fiat currency that can be printed easily on a whim of the powerful/disconnected, who have proven that they absolutely do not care about the wellbeing of the masses.

      Wake up. Do the work involved in understanding blockchain and cryptocurrency. You clearly do not understand it.

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    •  

      It doesn’t take much to have the Gold Bugs emerge. Why do those who claim to have a democratic agenda attack institutions under democratic control. It’s the paradox of Andrew Jackson.

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  •  

    “Apparently, blockchain fanatics would have us put our faith in an anonymous cartel subject to no rule of law, rather than trust central banks and regulated financial intermediaries.

    …who make their own laws and regulations. They do !

    If the erstwhile respectable financial industry either behaved itself decently or was effectively regulated there wouldn’t be a niche for blockchain.

    This is a shameful apologia for the conservative establishment’s financial services.

    Shame on you, NOURIEL ROUBINI.

    •  

      Great comment. Hear hear! Well done.

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  •  

    The more likely alternative to fiat currency will be a return to currencies backed by hard assets. If the fiat currency system unraveled there would be no Internet and with no Internet there’s no crypto anything. Yes, fiat currencies have created an unsustainable economic system built on faith (an economic religion?) but the ultimate unraveling will benefit those countries with natural resources…where ALL economy begins.

    •  

      There is no problem whatsoever with Fiat currency except that political and financial authorities won’t use it properly except for their own enrichment and the furthering of their own agendas.

      Hard asset backing is barking at a moon of nostalgia. Not only was it never effective, but also it never will be. It doesn’t work. It can’t work. Though I take your point about economics being about real resource management, if indeed that is what you are saying. I’m not entirely confident that you are.

      Modern Monetary Theory explains why and how to run a fiat currency system, and the sooner ‘ordinary’ people get their heads round that (and it isn’t complicated in principle) the sooner Central Bankers and Finance ministers will have to stop lying to us and doing as they please to the detriment of the rest of us.

      •  

        Exactly! I became aware that commercial banks, not governments, issue the money supply of nations, about 35 years ago; and have been advocating monetary system reform (government issuance of debt-free, interest-free money) ever since. When I first read Warren Mosler’s Soft Currency Economics I thought, here is a guy who understands money! But after becoming associated with MMTers I became aware that they claim the US government spends money into existence by “marking up accounts”; and the government only issues interest-bearing Treasury debts to provide private sector investors with interest-earning assets. In reality, only banks have administrative authority to “mark up” (credit) bank account balances; which only happens when banks create new bank deposits to fund their bank loans and bond purchases; and happens within the bank-operated payments system when banks debit payer account balances and credit payee account balances. We already have a globally-integrated digital money and payments system: bank deposits and the bank-operated electronic payments system. May cryptocurrency fans believe crypto is an alternative to government-issued “fiat money”. Most of our money supply is actually commercial bank-issued credit-debt money that is payable – by debtor-banks to creditor-deposit account customers – in central bank-issued fiat currency (banknotes). Monetary system reformers dream of a world in which we use debt-free government-issued fiat money instead of debt-based commercial bank credit as our main form of money.

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  •  

    The critics of cryptocurrency and blockchain continue to fall back on national currencies as the be all and end all. They need to consider some of the potential international uses.

    Protection of cash assets when national currency valuation is under attack

    In the age of climate change refugees, the ability to transfer liquid assets out of a country without possibility of government intervention.

    The payment of a global minimum wage directly into the wallets of workers according to their labor contribution when a retail sale is made.

    Only one or two high volume exchanges have ever been hacked. Anyone taking the time to investigate can find reputable exchanges that are secure. In addition, when dealing with substantial sums, they would protect themselves by quickly transferring any converted cryptocurrency out of their exchange into a properly designed private wallet.

    •  

      Apart from the “uber-rich” tax evasion purpose. International currency could be accomplished in more efficient and flexible ways. This would require these separate governments, which inherently will exist, to work together in a reliable and stable manner. This is a progressive step to not only form a economically and efficient international fiat currency, but to also create a more stable and equal quality of life globally. This most likely will happen at some point if citizens and governments progressively work to achieve it (vs. just trying to scheme each other for $).
      A blockchain system introduces a system that is quick, non bureaucratic, and will allow “uber-rich” tax evasion across borders, as well as a very in-efficient and volatile market, that also introduces even more issues with regulation and corruption.

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      You hit upon what will make the difference between life and death of crypto currency.

      If it will enable the uber-wealthy to move their financial assets across international borders un-taxed and unhindered you can be assured that it WILL work.

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    Mr Roubini”s article reminds me of the kind of argument that a sled manufacturer would have used against the invention of the wheel.

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  •  

    The author’s perspective is missing an important piece of information.

    Blockchain in finance and trading companies is not supposed to have benefit through *publicly*-distributed ledgers. It’s supposed to be (potentially, for example) for an internal clearing process to automate certain transaction processes until completion of all required steps, or otherwise a satisfactory completion of the trade (e.g., including delivery, partial payment at stages, or final approval/clearing of the transaction).

    •  

      The author’s perspective is to bleat on behalf of the financial markets about the threat to their privileged position of being able to be (very highly) paid for offering no useful service to society.

      We need financial services, but the ones we have, have become highly destructive. Their entire raison d’etre now is to extract wealth from public to private ownership.

      Somehow it has to be stopped, and if Blockchains can do it or contribute to the process, well and good.

      •  

        Ha! I love these comments of yours. I’d like to connect on LinkedIn if that’s OK and see if we can work together.

        This is how doers (makers, innovators) operate, people. Observe!

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  •  

    So if my real money is hacked, I get all of it back from someone or something? You’re money is gone no matter what. It got hacked. Its gone. Real or no real does not matter. Hacked is hacked. Gone is gone.

    •  

      Some exchanges are hacked, but not all are hacked on a regular basis. In a sphere as new as this, it is unfair to demand 100% security in all cases (Case = exchange). You should consider that VC money started to flow in in late 2016, and exchanges are currently developing into bigger and better businesses. Further, banks get hacked quite regular too.

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    The jig is up. While the remainder of the argument is as patently absurd as it is self contradictory this is true. DLT as most banks and other know it has indeed “nothing to do with blockchain” – having fatally undermined their own implementations by taking control back so they can do what they want.

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    What about using blockchain in emerging economies where citizens don’t trust their government? Couldn’t that be a good use case and actually eliminate corruption where it is most probably relevant?

    •  

      Very good point, Ronen. This is one of many positive aspects of the blockchain phenomenon that isn’t being fairly covered by bias media such as PS.

      And for the record, I actually appreciate most of what Project Syndicate publishes. They just need to open their eyes on this particular subject. First step is to get rid of Roubini and other “reality TV” (populous) writers. These articles are like the like selfies of academia.

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      As blockchain allows a significant decrease in both liability and authority in economic markets. There is very little reason why it would ever be able to achieve any decrease in corruption at all. A blockchain system has no systems to deter corruption. Essentially everything comes down to computation and complete anonymity.

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        LOL it’s new software. All new software is buggy and requries testing and development. Thing is, Bitcoin is the most basic kind of software imagineable. It’s just a transacting program (person A gives X BTC to person B) and a single spreadsheet (list of historic transactions) for a database. Can’t really screw that up.

        But anyway Bitcoin is a follow-on cryptocurrency variant to an earlier version, which was called BitGold. Bitcoin is the improved version. It’s not going anywhere, despite the resistance from established defenders of outdated monetary mechanisms. This is an expected and common phenomenon in any disruptive innovation’s path to mass adoption, as loathsome a phenomenon as it is. Standard and basic, albeit highly annoying obstacles.

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          “Bitcoin is the most basic kind of software imagineable” its not basic. It requires encryption, it requires distribution, it requires signed access. It requires large, and ever growing, amounts of electricity. It also now needs to function more then “a transaction” but as a complete bank, which introduce PC access issues, exchange issues, network issues, operating system issues. Following issues even grow, hardware issues, social issues, volatile issues, scam issues, also yes bugs, malware, spyware, trojans. All of this also the blockchain system is also just running atop Windows 10 with its own huge list of issues :/ not a great balance…
          “any disruptive innovation’s” Im sure there are examples of ridiculous “disruptive” systems such as scientology, radium, DOS etc. Bitcoins advantage to these is that it does achieve a single mathematic achievement, singularly solving the “double spending problem”. This is the only thing new however once bundled together there is troves of claims without the critical thought of actual mathematics and valid solutions becomes disruptive. Everyone wants a piece of the new thing, but they don’t want to actually use math which they dont understand, these are called scammers. Even Satoshi himself claimed he never intented Bitcoin to be used as a standard. It was not built for the masses, but the masses certainly do like superficial drama.

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            Lol OK… I still call that basic. You don’t even need a computer to trasact it. I can write down my private key and wallet address with a pen and paper, and simply hand it to someone – anyone, anywhere in the world. HOW anyone fails to see the power in that, I will never understand.

            Are you in technology? You seem like maybe a banker or maybe some sort of political lobbyist… what do you do for a living? That might be the source of your fear/bias.

            Anyway, of course it was made for the masses, and it says so right there in Satoshi Nakamoto’s white paper, which is public. “Drama”? Haha not really, dude. What are you smoking? I want some! This is fun though.

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        I guess if there was away to stop corruption in the affairs of human society we’d have come up with it in the 150,000 years we’ve been here.

        The nearest we’ve probably ever got is various attempts at ‘religion’ to supply a moral, ethical code. But even they don’t last a generation at a time before they are hijacked.

        •  

          Religion is not the closest that we have to a moral and uncorrupt society. Regulated democratic government is substantially more free of corruption then anything humans have every accomplished in 150k years. That is at least when people and the public try to work together and not lie to each other or form unrealistic fears of un-existent government corruption.
          As far as moral human affairs and ideologies of incorruption, the public behaviors are far more dishonest and irresponsible then most governments. Peoples delusional and just untrue beliefs that government is impossible are being proved over-exaggerated and just wrong as governments work hard to progress equality for as many as possible in a regulated and steady manner. Acting as if government doesn’t have very effective systems that offer communication, equality and enrichment is delusional and untrue.
          I know its super cool to be “like the government is like totally not hip with it dude its like I just want like free money and stuff geez, wheres my yacht” but thats because the public is the most greedy, ignorant and destructive and un-responsible source of corruption that exists.

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            Yes, on reflection, I agree that functional democracy was probably better than religion in it’s effectiveness and the morality of organising society around fictitious beliefs in supernatural beings is not something I approve of. It was a pretty good wheeze in the Bronze Age but we should have grown out of it by now.

            Functional democracy didn’t last long here in the UK. To work there has to be an a engaged and appropriately educated population; the very last thing that the ruling class, be they hereditary, elected or self-appointed, want.

            It is really rather depressing. And the blame accrues to us all.

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    The entire article starts off with a misleading line.

    The price of BTC on Jan 1st 2017 was roughly 900 dollars… the average price throughout the year comes in at roughly 4,130 USD.

    The price is now over 6,500 USD…

    If you are cherry picking extremes to serve a narrative then you should at least be more careful.

    …also btw digital assets have been the top performing asset of every year they’ve existed. So good luck scaring the old, normies away from the market but we are here to stay.

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      Yep. You reinforce my feeling that is a pure propaganda piece, masquerading as academic pontification. Shameful.

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    Blockchains are no databases by definition and aren’t centralized. See e.g. Everledger and TradeLens.

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    They can be private and are never centralized, as that is called a “database”. See Everledger for an example of a decentralized blockchain “actually being used”.

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      There are many different examples of different attempts at a “Blockchain” system. Some essentially do become centralized, which essentially does fail at being an actual Blockchain. Others who attempt actual decentralization for the most part fail at being useful, or even functional as well as just bad solutions to insignificant problems. The actual best decentralized platform has been around for a long time, it is available to anyone through a computer. It is the intelligence to understand how to use TCPIP and other internet protocols, and possibly public key encryption, to practically do any computer task you need. It works now, and nothing needs to change. Blockchain reverts that openness to instead allow large computational sources more “value” and power then your single source of available computation and intelligence. Once people actually attempt “decentralization” with a blockchain system, they will slowly realize that its just a over complicated, problematic option that does not improve these open protocols that are already completely free and available.

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        It may well be that the useful aspects of blockchain, in the long term, have nothing whatsoever to do with currency. We don’t actually need to alter the way we handle currency, we just need to use the system we’ve got properly.

        There are many things in our world, which need to be accounted for, that are considerably more important than money. Real resources for example, and energy.

        I know little about the mechanics of how blockchain works, but everytime I hear it criticised the critic gives away the vested interest he is trying to protect against the system being changed.

        I don’t need to understand the detail to see the picture.

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          “There are many things in our world … that are considerably more important than money … resources for example, and energy.”
          “I know little about the mechanics of how blockchain works”
          To clarify that my viewpoint is not simply to “protect the system being changed”. I aim to provide the reasons why a blockchain is worse, then other options. If your arugment “resources are more important then money” is your belief, then the blockchains constant need and use of physical resources from possibly unregulated sources, ie. Coal, etc. to create money that it would be considered a failure as a money creating process. Ie. The use of resources is significant as well as destructive and un-trackable just to print your own money.

          “everytime I hear it criticised the critic gives away the vested interest he is trying to protect against the system being changed.” I am opposed to changing the system to a worse system. There is alot of software systems out there, some good, some bad. We think that the technological industry in some way is different then the Car industry and that all the products are going to be the same and thier pretty front end interfaces are surely useful if its that pretty. We don’t believe that with a car, why should I with software. The software industry is often trying to sell us a lemon, why try when people no nothing but the front end interface do as little work as possible just all marketing (works for microsoft 🙁 ). Also seems earily similar to how blockchain is being proposed as “good” when its nothing that you really need. Its inhernetly more difficult to tell if software is a lemon then a car, its takes a bit more thought, but often there are companies that repeatingly deliver useful and thorough software with great security options and at least a seemingly thorough effort. Googles approach to society, progressive development and intelligent technology design, which works to make it available and useful to as many as possible, is something that I would, as a software engineer that wants good change, throw my money at, as very little other technology companies have tried to, or achieved the intelligently useful software that Google has. I think there are projects that Google, and others competitively (although Google is usually smarter), is working on that would be more beneficial to a civil and equal society then the blockchain is aiming to achieve. Google is writing the software the way that its always been possible to do, ie. the thoroughly well coded way perhaps without all of the significant and overwhelming amount of inflated manipulative marketing (and possible very little actual design).

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    Blockchains are not neccessarrily permissionless. Goes to show once more the authors lack of knowledge about this topic.

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      You stated above “They … are never centralized”. A permissioned blockchain allows only a selected group of users to validate transactions. Thus a CENTRAL group. You directly contradict yourself. Your a flat out and FACTUALLY wrong. The level of intellect that is involved in your decisions of value a blockchain are rampant evidence of the lack of reality, and completely irrational beliefs that blockchain proponents believe and spread.

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    Using the Gini coefficient is misleading and wrong in this case. Bitcoin owners also own other assets in USD, EUR, etc.

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      In this case, the metric is purely based on bitcoin ownership:

      “Best estimates are that there are about one million holders of Bitcoin; 47 individuals hold about 30 percent, another 900 hold a further 20 percent, the next 10,000 about 25% and another million about 20%, with 5% being lost. So 1/10th of one percent represents about half the holdings of Bitcoin and 1 percent close to 80 percent (http://www.businessinsider.com/927-people-own-half-of-the-bitcoins-2013-12). ”

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    This is outright wrong. A fork is not done by a few programmers but by all participants and can also be rejected by the community. Nobody has the absolute power. That is the most fundamental point about Blockchains.

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      “A fork is not done by a few programmers” unless its actually not a blockchain. Its permissioned. Or the computation is imbalanced unequally. Or large chunks of the chain disappear (which has happened). Or there are new and everending bugs.

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    Yes, I would like the entirety of social and political life to end up on a permissionless and trustless ledger, accessible to everyone. A world where no person has power over another.
    I understand how that sounds threatening to some people.

    I’ve grown up on the internet, unlike your generation. We exist without identity, skin color, without nationality, without religious bias. You may be a well-respected person, but in the world I’m part of, words are assessed by their merits, and yours have few. I’m not sure if you were misinformed, or simply failed to do the research you should before writing a opinion piece.

    A bank is not a credible intermediary, and never has been. How can someone that promises to keep your money safe and then lends it to someone else, unaccountably and unbeknownst to most of the population, ever be credible?
    No one wants to trust banks. We use them because we need to, and that isn’t much longer.

    Yes, once your crypto wealth is hacked, it is gone forever. Unlike your fiat money, which is gone without ever being hacked.
    Just ask the people whose salaries are growing below inflation, feeding the pockets of the shareholders.
    Just ask Assange, or Dotcom, or anyone the U.S. government seems to have a problem with, no matter what nationality they are, or which countries they live in.
    It’s funny that you accuse China and Russia of being kleptocracies, when they at least limit their theft to their own territories, as opposed to robbing others countries’ central banks after unilaterally breaking treaties, or routinely freezing assets of international organizations that happen to say inconvenient truths.

    How ironic that you accuse men like Buterin or Bitcoin developers of greed, when they’ve formed non-profits, warned people against speculation since the start and donated their unpaid time to the betterment of society and of something they believe in.
    Meanwhile, other people are being paid by the IMF, Federal Reserve, banks. Launching for-profit limited liability consulting firms. How surprising.

    Unlike bankers’, miner’s profits are consistently going down.
    Here, I’ll help with the reference the article doesn’t contain: https://www.forbes.com/sites/investor/2018/07/02/cryptocurrency-mining-profits-are-way-down
    This is as you would expect a perfect competition system to work, one that is based not on the rule of (paid for) law, but on the rule of mathematics.

    Yes, there’s greed in the blockchain ecosystem.
    Greed by clueless people that came in hoping to make a quick buck.
    Greed in the permissioned blockchains that you’ve correctly identified as pointless, driven by old companies desperately trying to stay relevant in an area they can’t compete in.
    But mostly, greed by institutional investors, who don’t understand or care about the technology or its long-term implications, and lost a fair sum of money in favor of people like myself, who were there since the technology was created.
    This article has a lot of misplaced anger. How coincidental.

    Any interested high school student can tell you the difference between blockchain and a spreadsheet. It’s quite easy, but they can spend their time answering more interesting questions, so I’m glad that they won’t bother.

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      “We exist without identity, skin color … nationality … religious bias” OMG LOL This is so not true and completely not how the current internet landscape operates. If anything it is more toxic then practically any physical community that exists.
      “words are assessed by their merits, and yours have few” No the words are usually “assessed” by whoever spams or upvotes more regardless of truth, that is much more accurate and true description. Which also leaves a troubling end to what is value on the internet when bots spend a significant and unending amount of energy creating fake news and fake technologies to manipulate the actual equality that exists in the world outside the internet.

      “A bank is not a credible intermediary, and never has been” Hmm It has been working very well for a very long time and only getting better along with the increase of balanced civil liberties and intelligence. Regardless of what the delusional people who spend all their time discussing conspiracies on the internet believe.
      “We use (banks) because we need to” Good luck fending off the bank robbers, when they point a gun to your head for your crypto password.

      “once your crypto wealth is hacked, it is gone forever” It is also not really usable anywhere without trading into fiat, so essentially its value is reliant on the infrastructure of another stable system. Ie. crypto’s value itself has yet to stand on its own feet to prove its value “here” or “gone”. When its the standard then inflation becomes the problem.
      “fiat money, which is gone without ever being hacked” This is for the most part not true, but, there is at least liabilities and regulations in place for support of theft. Blockchain has no such support system that succeeds in a decentralized way.

      “Unlike bankers’, miner’s profits are consistently going down” Perhaps along with the value of the currency as well.
      “This is as you would expect a perfect competition system to work … on the rule of mathematics” Not just mathematics, but social manipulation, extortion, likely some violence, fear, as well as large, and ever growing, amount of physical fuel, clean or dirty, to keep this “competition” working. Yes computers use physical resources (fuel,coal,gas,etc.), in case you weren’t aware.

      “there’s greed in the blockchain ecosystem” Yes it comes from a large mob of unregulated, un-liable group of the public. Banker, brokers, investors also came from the public. Blockchain is a space that allows a significant decrease in any sort of liable and responsible regulation. Essentially any issue that we have with our current monetary ecosystem is only easier and less liable in a blockchain system.

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      This isn’t how a “permissionless and trustless ledger” works. Everything is computation. There is no deduction of power, the power and value is just created via computation. Which is not equallly accessible or liable to create any equality or morality of any sort. Your “desires” are just as applicable to fiat system. But people are delusional. Blockchain is significantly worse then a bank and there will be significantt destruction caused by the ignorant who push it and their irrational fear of the effective and progressive Banks. Blockchain is just the vicious and toxic dark web.

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    It is short-sighted of Mr. Roubini to dismiss the underlying blockchain technology. The digital era is one becoming dominated by platforms that provide value in the exchanges between chains of suppliers and buyers. As Amazon, Uber, Airbnb and countless other examples demonstrate – the value of a firm is becoming disentangled from the assets it owns versus its ability to bring customers together with sellers. That is the power of the platform.

    In order to navigate these increasingly complex supply and demand-side networks, increasing real-time co-ordination is critical. No one single organization can hope to manage and control all of the information that flows through its operations. The demands of the crowd are such that you need the power of the machine to manage it or else you will eventually become crippled by the ubiquity of data.

    That’s where blockchain comes in.

    Through encryption, blockchain encodes trust at each touch point of these sensitive networks. At the same time, blockchain allows for greater real-time transparency to occur. When increasingly sophisticated requirements are being put on the value chain (ie., customer privacy, environmental reqs, public safety reqs), organizations that have the ability to protect data while measuring it across company/nation boundaries will outcompete those which cannot.

    For instance, financial institutions may be facing strict requirements for customer privacy under Europe’s GDPR. How do you ensure every single financial transaction is protecting consumer privacy? Or if a customer wants to know whether any of their mutual fund investments are in companies that violate child slave labor laws – how would a single financial institution be able to manage that? Or how would a shareholder easily find out if their company is using environmentally-sustainable suppliers?

    These kinds of issues create real economic risk for all stakeholders, from shareholders, employees, and customers. The specificity and scale of these problems cannot easily be solved without an underlying digital technology. Blockchain is that technology.

    •  

      “The demands of the crowd are such that you need the power of the machine to manage it or else you will eventually become crippled by the ubiquity of data”
      This is being proved wrong by everyone that is actively using amazon as it works perfectly, and only supplies more useful and well designed value every year.
      “power of the machine” Yes amazon is run on a computer… A computer can run hundreds of thousands more computable processes then “the crowd” is capable of. The computer wins. See how simple that is, and really it is just that simple.

      “That’s where blockchain comes in” Blockchain only slows that process down by a significant amount as it is much more amounts of encrypted, distributed and replicated (often completley uneccssarily) data. Blockchain is also run on a computer, and someone has to program the functions and software so the limits really just dont change.

      “How do you ensure every single financial transaction is protecting consumer privacy?” Write good software. Tokenized Credit Card Numbers. Two factor auth.
      “Or if a customer wants to know whether any of their mutual fund investments are in companies that violate child slave labor laws” Write good software. Database of companies. Look it up.
      “how would a shareholder easily find out if their company is using environmentally-sustainable suppliers?” Database of companies. As well as ensuring they don’t use the excessive amount of computation that the blockchain requires, as that is essentially a un-sustainable environment violation as well. Yes Computers affect the environment too. And a solution built to stave off our delusional fear of banks, and (bad) solution to phony problems, that need significant energy increase is environmentally irresponsible.

      “how would a single financial institution be able to manage that?” Basic Encryption? A Database? Hmm Both of those “problems” are actually very easy to solve. Its called being organized. Its also already being mostly achieved and works quite well.

      “These kinds of issues create real economic risk for all stakeholders, from shareholders, employees” No these problems do not create the significant problems. The problems come from extortion and quick pressure to utilize unnecessarily complicated and in-efficnet technologies to thrawt insignificant problems, because people have irrational fear, delusion and urge to be arrogantly revoultionary, against whatever is currently working that takes patience and some slight work to maintain.

      If these are our problems. Our problems are fake, insignifcant, delusional, and ridiculous. We should just all donate to SpaceX and Elon Musk will get us all to Mars in practically no time. #fakeproblems #fakesoftware

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    Bitcoin’s value is still around 6500 dollars despite people like Mr. Roubini claims that this is the mother of all bubbles etc. Given his belief that bitcoin and others have no intrinsic value, such a value is still incredibly high. I think his claims and reality, at least as of now, are still in deep contradiction…

    •  

      The price of Bitcoin is around 6500$. Nobody knows what the value is. Currencies don’t usually have an intrinsic value. Usually the value is determined by the stuff you can buy with it. Since FIAT currencies are pretty much enforced in a region, all the products produced in that region make up the value of that currency (it is not exactly said, but good enough for a first approximation)… With non governmental currencies it is much more difficult, because people can start or stop accepting it at any time… Thus its value is unpredictable. The moment people lose faith, the price in “real FIAT currency” 😉 will drop pretty fast… Now of course it is almost like a cult, so I fear the “leaders” will start selling, while they still preach to their followers to buy…

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    In my opinion, and note the word, “opinion”:

    The blockchain technology using the DLT does have a lot of value, and yes, I agree, with the author, that in the majority of cases, the value lies in the permissioned, private format, as far as most enterprises are concerned.

    This does not limit the technology, but does rather take away, from the whole “philosophy” of decentralisation, and morally incorruptible high ground that some of these companies are lauding. (I sense, and agree with the author’s frustration with this, moral high-ground that these companies/people are taking, is a huge con-job!)
    These companies, and individuals are wrong. It will help to “clean up” industries where there are trust issues, BUT cannot be the only governance tool/technology to do so.

    It will work in conjunction with other existing tools. The DLT will be a “source” of truth, and cannot be the only truth (not at least, in the public, permission less format).

    And no company in their right mind will want to replace all their databases, with the blockchain database architecture. Even new systems, will not be designed with Blockchain, it simply is not viable, or practical.
    The DLT will augment the existing technologies, and this is why the key challenge/focus area, with Blockchain technology, is “integration”.

    This is where the advantages, yields are going to arise, in my humble opinion.

    The crypto-currencies and ICOs used to mine the blockchain, are a huge minefield of rip-off merchants, I agree, as the author states, and I would add, investors (In the crypto-currencies), beware!

    That should not undermine(pardon the pun!) the technology as a whole, which does have huge value.
    The technology, I do see as a good investment, where appropriate use-cases have been identified.

    Overall, I do agree with his take, but it is not a very informative, fact based article, more of an “opinion” formed with non-substantiated understanding of the current state of the “industry” .

    In the comments, there was a view that the technology will take 2yrs to filter through, and I think that this, is on mark.
    There are already some significant use cases, that are coming into the public sphere, and I would add, that, these come from technical integrations, and don’t depend on questionable ICOs/crypto-currencies.

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  •  

    Tulip bulbs, tech stocks, derivatives, Bitcoin. If you don’t understand exactly why people value something that is being hyped so much, stay away from it.

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  •  

    What is the author talking about, could it be the consequential effect of the over usage of the 1979 spreadsheets?

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    In my [professional …] opinion, “block-chain” technology bears one very-important promise that it has not yet been able bring to pragmatic, market-ready fruition: the creation of tokens that can be verified without the need for real-time polling of a central source-of-truth (with the vulnerabilities of “race conditions” and so-forth). This would give digital trading tokens the same features that Dollar Bills have: you can verify that they are authentic without calling the US Treasury in real time. That’s huge. When we can do this pragmatically, efficiently, and quickly, it will be revolutionary.

    The thing that’s holding us back now is computational infeasibility: the tokens are too hard to compute; they are “mined.”

    (The reckless gambling and Ponzi-scheming is also holding us back, but as you said, that’s dying-off now.)

    One day, someone’s breakthrough will make block-chain be just as revolutionary as, say, “public key encryption.” Perhaps more so. Well, it took many iterations and alternative strategies to perfect public-key crypto, but we finally did it, and today it protects nearly everything (including the “https” that protects this very web site – see that “padlock” on the address-bar of your browser?).

    The promise of block-chain technology is so compelling, and obviously so valuable, that we know a similar breakthrough will one day occur in this space. It will not be a “coin.” It will revolutionize financial transaction security in mundane ways that presently cannot be achieved. But, alas, not yet.

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    Despite huge respect for Roubini because of his pre-2008 crash predictions, this is just a load of rubbish. If this bitcoin experiment is “broken” as he says, how the hell is the existing “classical” system better? It crashes every 20-30 years and causes massive devastation to real economy and beyond! The system, ie. mainly the banks, blew every nanometer of trust with 2008 crisis when public money had to bail them out and yet everything is the same and judging from the opinions here we can expect the next crisis in 2020. If this is not the ultimate proof of invalidity of current system then what the hell are we talking about? Its not as if the current system is working for anybody except the richest 10% and their lackeys. Bailouts, workers income stagnation, rocket profits for the richest few, unimaginable accumulation of money in the hands of upper most 10%, unregulated free market – until the AIG comes along – all speak of how the current system is utterly broken for 90% of population of this planet.

    … and speaking of “blockchain is nothing more than a glorified spreadsheet”, what the hell is securitization else then plain old insurance we know from Roman times? Nothing! Its the same, and yet it was greeted as the holy grail of finances from the 1990ties onward and made insane profits for “traditional financial institutions” Mr. Roubini defends here as sound, working and trustworthy.

    In short, I thought there was more to Roubini then this pointless Bitcoin bashing. BTC will survive this onslaught and become a viable system, so will the major crypto currencies.

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      Your comment is 100% accurate. Roubini fails to comment on fiat currency used by everyone which has no intrinsic value. When a central bank decides to print money, they do it without blinking. At least block chain gives a level of fairness not controlled by the very few.

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        “Roubini fails to comment on fiat currency used by everyone which has no intrinsic value.”
        It doesn’t and it shouldn’t have intrinsic value… It is a meant to exchange goods and services. It should not be an investment!!! Buy gold or cryptos, if you want to have something “solid”, but don’t touch everyones currency.
        With one currency in a region, determining its value is pretty straight forward… Value currency = value of stuff you can buy = value of stuff that is produced in that region

        Of course it is more complicated in international capitalism… But nothing comparable to having multiple currencies compete in the same region. Now nobody can predict the value of the currency anymore.

        “When a central bank decides to print money, they do it without blinking.”
        citation needed… Most central bankers are rather conservative with the money supply… Yeah there are countries with large inflation (Zimbabwe, Venezuela, Argentina? …), but they are pretty much the minority, and don’t follow the established guidlines (e.g. independant central bank). So you are trying to solve a problem, that already has a solution…

        “At least block chain gives a level of fairness not controlled by the very few.” Sure, that is why the distribution of bicoins and other cryptos is more unequal than that of North Korea… But seriously… The whole dream of dezentralization goes out the window, if you leave it to the market… China controls much of the crypto markt today…

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    This article paints a picture of the crypto/blockchain space that is very misleading and flat out incorrect in many aspects. Time will tell how well cryptocurriencies and distributed technologies fare the fact that many in the traditional financial world trash talk the technology but yet invest so heavily in it is proof enough to me of its potential. Watch actions, don’t just listen to words. Especially words like this article.

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    Blockchain is a single source of truth.

    For example if you insure a flight for being late, if it’s late, then the insurance company pays out because it can check data if the plane was late from the airline via Blockchain. This will cut payment time from weeks to days or even hours.

    This kind of automation has the potential to vastly reduce staff levels and increase productivity and profit.

    Ultimately, Blockchain will be seen as a trusted audit of transaction and data, it’s just going to take 2 years from now to feed though.

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      And it is impossible to do now because technology doesn’t exist? There is no reason for that not to happen now. And because mainly issue is the process and not data – once a blockchain is used they might as well keep taking their sweet time with refunds or anything else.

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      What you said doesn’t make any sense. The insurance company can just subscribe airline’s reports about late flights. Even I can get such info from Google instantly. Using blockchain to publish such data doesn’t provide any additional value.

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        When you buy insurance against a flight, it could be issued as a smart contract. This would instantly and automatically pay out if the flight is delayed. No human involved

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          Unless whoever rights the smart contract, creats a bug. Or malware to transfer the money elsewhere. Taking the money from both the airline, and the customer. As “no human involved” and complete anonymity is the perfect place to create malware, smart contracts are not something that I would like to use or expect any company to trust and use at all. As a customer I would prefer a human, and multiple layers of liability, regardless of the slight inconvenience. I also am very computer savvy, and a professional software engineer, so my doubt with the actual safe implementation of software is well founded.

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    “He has worked for the International Monetary Fund, the US Federal Reserve, and the World Bank.” Pipers and tunes. Pipers and tunes.

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    This is also misleading with regards to Bitcoin. Roubini is counting mining pools as miners. The miners are free to leave any mining pool at any time, and take their hash power elsewhere. Mining pools are just a voluntary collaboration.

    Also, centralized compared to what ? How many people actually set the Federal Reserve interest rates, or decide how much QE to do ?

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      Centralized as in actual mining farms that mine most of the coins located in areas where electricity is cheap and run by pretty much businesses. Those random individuals building their own rigs are pretty much a drop in an ocean

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    Thank you for that follow up article on blockchain technology. It was very eye opening.

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    Why does race and gender matter ? Bitcoin is in part an attempt at blind meritocracy.

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      Metrioarchy – “power … on the basis of … ability”. This is not the same as equality. Blockchain cannot aim to create equality using this system. Programs like tax, or unions, or any sort of labor rights essentially do not exist in a blockchain system. This would essentially be extreme privatization. Ie. Get to the top of the pyramid or quickly invent some religion to “outsmart” everyone else, regardless of equality. It’s happened before it was called the crudades, which definitely involved race and gender.

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        Why do you think there is no room for tax, union or labor rights? And what is the crudades?

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          crusades*. The OP speaks of meritocracy, which is some form of the ideology behind crypto-currencies. This aims to replace bureaucratic regulation, a large proposed feature is being able to send to any country. Also sending without fees, or tax. There are bureaucratic reasons why money is not allowed to be transferred to particular countries, large drug syndicates, terrorism, and human trafficking to name a few. In order to create systems of tax, labor rights there needs to be central authorities. If a system like crypto-currency is run with other central regulation then it does not succeed at its main purpose and is bureaucratically supported. All generation and usage should be taxed, there should be limits on how its used, but then its really not new or necessary in any way. Taxing would completely change the eco-system it would essentially make mining completely not valuable, which would be a good thing (ie. dont waste electricity just for your profit). However this would essentially eliminate crypto-currency as a possible standard for a standard currency (which is good (its not a standard)). If you have these central authorities, then there is essentially no reason to use crypto-currency instead of just a strongly encrypted database and multi layer secured central server systems.

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    This is misleading. In this calculation Roubini is taking the Bitcoin addresses held by the exchanges as a single owner of those coins. In reality they are held on behalf of the people using the exchanges. It is like saying that banks sure are rich and counting all their customers deposits as their money. It also counts the early large numbers of lost coins, which distorts the figure.

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This content was originally published here.

SMM Gone Bad: TokenPay (TPAY) Better than Bitcoin but Similar to Bitcoin Cash (BCH)

TokenPay (TPAY) is a new player in the crypto verse that offers merchant services to its community. Its self-verifying mechanism has been gaining a lot of interest from businesses and individual users across the globe. With a robust infrastructure in place, the coin has been in the media as a way of popularizing its services in a bit to attain its mass adoption goal.

Social Media Marketing (SMM) has become the best route to the market for majority of crypto coins and tokens but TokenPay appears to have taken the strategy notch higher. Comparing itself with other coins appears to be the driving force behind its current attention and many investors are waiting to see if the hype will be sustained in the long haul.

In a new twist of events, TokenPay (TPAY) has taken to its twitter account and compared and compared itself with Bitcoin Cash arguing that it is better than Bitcoin:

TPAY features two second transaction confirmation (explorer.ypay.ai) and a fully anonymous stealth mode. We call it “Bitcoin on Steroids” because it simply has more features and works better for transactions. It isn’t $BTC, either is $BH. But for transactions TPAY>BCH.

Most of the new market entrants including TokenPay are selling themselves to the masses through transactions speeds. Blockchains with fast transactions are becoming very popular and the money processor is using he clause to woo more adopters and partners.

TokenPay Meets Litecoin in a Unique Alliance

TokenPay has been hitting the headlines for various reasons lately. The last few months have been awesome for the coin. The developer team has been on course with the project roadmap and appears to be set for the next Bitcoin bull run. The Litecoin and TokenPay alliance is one of the most ambitious mass adoption moves for the platform.

In a recent Raddit discussion, Charlie Lee was quoted saying:

“Through my interaction with Derek Capo, TokenPay CEO, I have sincerity and real desire to increase crypto adoption. Given all that, I feel comfortable representing LF in making the deal with TokenPay.”

TokenPay recently partnered with Verge, a move that has seen a growing adoption on both platforms with TokenPay being the immediate gainer given its role it is playing in the payment industry. This comes after Verge buying 9.9% stakes on a German bank which is an easy entry for TPAY into the German market.

TokenPay Controversies

TokenPay appears to be rubbing other major coins the wrong way. This time round, the coins have been on social media trying to belittle Ripple and NEO. The tactic is aimed at shifting attention from established coins to get inroads into their markets. In their latest tweet, TokenPay says:

“$NEO is centralized just like $XRP. The fake “Foundation” (fancy word for a company asked as a charity) controls al the nodes. “Chinese Ethereum.”

As much as there is some truth behind the statement, TokenPay appears to be using social media to gain that extra inch in the market and by interacting with mainstream coins, the marketing team seems to be achieving their goals. It waits to be seen how the campaign turns out once the TokenPay community continues to believe that NEO and Ripple are not 100% cryptocurrencies.

TokenPay White Lie on Social Media

In a recent cryptocurrency community’s performance poll, TokenPay (TPAY) was caught vote cheating against Electroneum (ETN). During the semi-final run, it was discovered that TokenPay faked it votes

to beat ETN. With Electroneum commanding the largest community, TokenPay had to fake its votes to win and once the manipulation was discovered, the coin got disqualified.

This could turn out to be a big setback for the coin popularity as the event exposed part of its unethical marketing strategy and for the investor to have confidence on the platform; a lot of convincing will need to be done. An ethical SMM is the only route for the coin to get credible adoption that will grow the community and TPAY value.

This content was originally published here.

Bamb-U Australia Offers 50% Discount On Every Transaction Through Verge (XVG), Tokenpay (Tpay)

There has been silence in the Verge (XVG) community after the last attack, with many observers saying the end of the altcoin has come. The Verge Meet-up came shortly afterward, and it was branded a success.

Then, series of issues has been surfacing in the cryptocurrency community, but on the end of Verge, the news that Bamb-U has started accepting Verge and TokenPay enlivened the VergeFams.

Not that it has only started accepting the two coins alone, the Australia’s leading bamboo sunglasses & bamboo watches brand, was said to have put a 50% discount on every transaction made with Verge and TokenPay.

Mihael, Verge Currency Core Team member saddled with the responsibility of business development and Community Management pointed to this information in a tweet today:

#VergeFam and #TokenPayFam, @bambu_products is awesome! They now offer a 50% discount for everyone that pays with @vergecurrency or @tokenpay! Thank you for supporting #massadoption and our communities! $XVG $TPAY #VergeCurrency #TokenPay.”

Interestingly, the same was indicated on Bamb-U official website:

“Pay With Verge Currency Or Token Pay & Get 50% Off Your Purchase.”

It could be said that since Verge partnered with PornHub, series of partnerships have been coming in. Verge today, despite ups and downs, which could be seen as a necessary hindrance in the crypto space owing to the newness of the technology, have won more friends than foes. The crypto coin is now moving closer day by day to partnering with big companies.

Recently, XVG initiated a campaign for mass adoption, in the campaign, Spotify, was one big company targeted by the Verge community.

Cees Van Dam, Verge’s core member in charge of recruitment and social media, initiated the campaign.

He said in a tweet:  “#vergefam, help us Verge being added as a payment option on @Spotify. Please retweet but do us a favour, click on the link, vote en preferably add your comment. Together we can do it!”

About Bamb-U Australia

Bamb-U Australia have different Bamboo Watches & Bamboo Sunglasses of the highest quality craftsmanship and style. The company derives it material from FSC certified, sustainably farmed South East Asian bamboo.

“Our aim is to ethically make, premium quality, sustainable products that will turn heads, while giving something back at the same time,” Bamb-U has said.

“That’s why, with every bamboo watch or bamboo sunglasses sold, we plant 7 trees in countries affected by deforestation. We use only bamboo in our products because it regenerates every 4 years, compared with the decades it takes to regrow the hard woods used in wooden watches or wooden sunglasses.”

The post Bamb-U Australia Offers 50% Discount On Every Transaction Through Verge (XVG), Tokenpay (Tpay) appeared first on Ethereum World News.

This content was originally published here.

Seems Litecoin (LTC) And TokenPay (TPAY) Are Partnering on Acquiring Bank In Germany

The unveiling of Verge’s mystery partnership opened doors to many things. It is noteworthy that there has been the reduction in the value of Verge since the announcement was made. However, there are two to three success stories for Litecoin (LTC) and TokenPay (TPAY).

When Charlee Lie, Litecoin Founder teased Verge on Twitter and urged Pornhub to add bigger cryptocurrencies claiming the entertainment industry should not be monopolized, many a number of enthusiasts took their time to condemn Lie’s stance on the partnership. Derek Capo, CEO TokenPay was part of those who condemned Lie’s attitude, questioning the CEO on why he failed to contribute to the crowdfunding that made Verge (XVG) gain partnership with Pornhub and Brazzers.

However, Lee was adamant and went on disparaging the partnership saying the money-induced corporation is not ideal for the crypto space. Condemning the incidence, Darec said it seems Lee as well bribed coinbase to have it listed on the exchange. The conversation went on, and surprisingly it births a Non-disclosure Partnership between TokenPay and Litecoin (LTC).

How The Partnership Happened

While Daren and Charlee were taking on each other on who failed to donate and who donated, Daren revealed that TokenPay has a partnership with Verge and that they, TokenPay, are buying a bank in Germany and will be using Verge as their banking solution.

“1. If tokenpay did not donate the deal does not happen. 2. tokenpay has a partnership with vergecurrency for our banking solution (we are buying bank in Germany). 3. More partnerships between crypto is important. TokenPay also benefits in helping large community, etc.”

During this period, Daren, however, question Charlee on Litecoin’s desire to have a debit card. Since Litecoin has been partnering with different firms to make sure a debit card is produced in the cryptocurrency’s name. Cryptocurrency enthusiasts hope that in few months a Litecoin Debit Card would surface.

“No problem, so when do you want to talk about a REAL debit card solution? We are buying 9.9% of a bank in Munich with option to buy 90%. We have a whole ecosystem and plan in place. Let me know how we can work together. The battle between old and new world is just getting started”

“They key to making this all work is ecosystems, partnerships and constant communication with regulators. Buying a bank in Germany gets us a seat at regulator table, key to educating governments. As for LTC we can add to our bank, debit card, gift cards etc.”

Charle replied.

“Thanks. Let me know if there’s anything I or the Litecoin Foundation can do to help,”

The Partnership Confirmed!

Litecoin (LTC) and TokenPay (TPAY) did not reveal what the partnership is all about till now, but it was confirmed in a tweet by TokenPay that the two cryptocurrencies have entered into a Non-Disclosure Agreement.

TokenPay CEO derekcapo Interview with Sean Davis. THE TPAY ECOSYSTEM EXPLAINED. XVG Deal LTC NDA Signed”

While it may not be absolutely clear what the agreement may be on, the two have highlighted above that it the partnership is either on having more stake in a German bank or partnering on producing a Litecoin-TokenPay Debit Card. Either of the two is a blessing.

Source

The post Seems Litecoin (LTC) And TokenPay (TPAY) Are Partnering on Acquiring Bank In Germany appeared first on Coinatory.

This content was originally published here.

You Can Now Hold Ether In Blockchain, One Of The World’s Most Popular Cryptocurrency Wallets

With the price of Ethereum’s token, ether, up almost 4,000% for the year, Blockchain.info, one of the oldest and most popular user-controlled bitcoin wallets, Thursday adds it as a second currency to the service.

The move gives the 16 million Blockchain wallets access to the second-highest market cap coin, which is used to power smart contracts on the Ethereum platform.

Additionally, the wallet, available in 140 countries, now integrates the crypto-to-crypto exchange Shapeshift so users can easily trade from bitcoin to ether and vice versa.

“The reason we decided to add Ethereum is we really feel like Ethereum as a community, ecosystem and technology has really matured,” said Peter Smith, Blockchain’s chief executive, of the two-year-old cryptocurrency.

Blockchain.info adds ether to its walletBlockchain.info

While another popular cryptocurrency wallet, Coinbase, began offering ether more than a year ago, Smith said Blockchain has to be more conservative because of the demographics of its users. While Coinbase’s customers are more concentrated in North America and Europe, where many people have probably already heard about Ethereum, Smith said Blockchain’s user base is more global, with 80% residing outside of the United States. “When we survey our user base, the majority of them don’t know what ether is, haven’t heard of it,” he said.

For that reason, he said, “We feel we have a serious responsibility that when we’re offering something, we’re offering something that’s high quality,” he said.

Blockchain.info maybe be the most popular user-controlled wallet, in which the holders hold their own private keys, as opposed to a hosted wallet like Coinbase where the company holds the users private keys. “What’s most fundamental to know about our product is our tagline, which is ‘Be your own bank.’ Our philosophy is not to run a crypto bank, but give people software packages so they could be their own bank,” said Smith.

The most popular user-controlled Ethereum wallets now are desktop or web applications, so from the start, Blockchain, which also has a mobile wallet, will likely be the most user-friendly mobile option for people who want to control their private keys.

Smith said Blockchain is choosing to add Ethereum now based on its progress. In its two years of existence, Ethereum has undergone some major challenges, starting with a failed smart contract more than a year ago called the DAO (which stands for decentralized autonomous organization; this one was structured as a smart contract-run venture fund) that, first, collected $150 million from people all over the world, and then fell victim to a “hack” in which someone who exploited a loophole in the code made off with $50 million.

That then led to a decision by some to “hard fork” or roll back Ethereum’s digital ledger to a time before the DAO and the “hack,” but that decision was so contentious that a group that disagreed with it have kept alive the original chain, Ethereum Classic, whose token, ether classic, is worth a fraction of Ethereum’s ether.

However since then, Ethereum has become the platform that has spawned the initial coin offering craze that has so far raised $2 billion in crowdsales of new tokens, and its price has risen along with this trend. With more people having easy access to ether through Blockchain, it could fuel the craze or at least spread it to more people.

Smith felt confident about adding ether now because the token trades on more exchanges, including regulated ones, it has more trade volume, making it less likely the price will be manipulated and because technical issues around one of the methods used to secure the blockchain, called proof of stake, look as though they will be resolved.

He demonstrated the wallet for me by sending me $1 of ether to me — the first transaction of ether from Blockchain to Coinbase. The transfer took two minutes and seven seconds.

Smith then gave a demo of exchanging ether for bitcoin, which, due to fees on both the Ethereum and Bitcoin networks as well as a wide spread in the exchange rate, caused his $21 worth of ether turn into $12 of bitcoin. Currently, fees on the Bitcoin network are around $6, he said, noting that the fees would be a smaller percentage of a higher-value transaction.

Aside from its progress, Smith said Blockchain decided to add Ethereum because, “for products we want to build in the future, Ethereum is very integral to that,” he said, mentioning products that need smart contracts, or derivatives of tokens. “We want something to add to the wallet to be truly additive. Fundamentally, we’re not about helping people speculate, so for us to add something, we want to make sure it adds some unique value, some unique additives, some unique driver to our platform.”

This content was originally published here.

Monero [XMR]s lead developer states TokenPay are “snake oil salesmen”

Recently, Twitter witnessed a feud involving the lead developer of Monero, Riccardo Spagni, who goes by the name Fluffy Pony on Twitter, and TokenPay, a cryptocurrency payment platform.

According to the posts, Riccardo was invited for an open debate by TokenPay to address the allegations made by him which stated that TokenPay was a centralized platform and their proposed Distributed Proof of Stake [DPoS] model was significantly worse than the distributed database.

After a series of discussions, the CEO of TokenPay, Derek Capo accused Riccardo of creating a platform which could be used by criminals to access the darknet marketplace whereas TokenPay operated only in legitimate markets. He said:

“while there are legitimate needs for privacy, drug dealing, child porn, and trafficking do not count”

Riccardo declined to debate with TokenPay as he did not want to give them free publicity, adding that they were “snake oil salesman”. Spagni was later accused of giving TokenPay publicity by publicly debating on Twitter. Furthermore, he was held responsible for declining the debate due to the fear that TokenPay would be a competitive concern for Monero in the future.

“Totally different. I’m not retweeting any of these replies, so they don’t appear in my timeline. Most of my followers won’t even be aware that the debate is happening. An audio/video/live debate would be markedly different”

TokenPay stated that they were not in a competition with Monero as the platform’s marketing was clearly driven towards dark market adoption whereas TokenPay was solely focused on legitimate commerce activity.

Riccardo countered TokenPay by stating that criminals on dark markets needed the strongest privacy. The Monero platform was not marketed to such criminals but they just started using the Monero without taking permission. He added:

“But they’re also smart, and will only start using technology if it’s truly privacy enhancing. Think about that for a second”

According to TokenPay, Monero was building products which catered to the criminal underworld. They further stated that Monero’s illegitimacy would soon be realized by authorities. They added:

“We will keep doing what we are doing in the legitimate commerce markets. Stop worrying, we aren’t competitors”

In the post, Riccardo stated that Monero’s intention to enable privacy was for the downtrodden and underserved. He further blamed TokenPay for their horrific insinuation. He added:

“If criminals choose to also use it we can no less stop them than a kitchen knife manufacturer can prevent their knife from being used to murder”

This content was originally published here.

TokenPay completes acquisition of 9.9% of Germany’s WEG Bank

TokenPay, a decentralized and self-verifying payment platform project today announced that it has officially closed a deal with WEG Bank AG, located in Berlin, Germany.

Share certificates representing 9.9% of the equity interest in WEG Bank AG have been transferred to TokenPay Swiss AG, along with options to acquire an additional 80.1% of the bank upon customary regulatory approval.

The proceeds of this transaction were obtained from TokenPay’s December 2017 token sale. As outlined in the TokenPay  roadmap, the company completed this partnership during Q2 2018, in line with its November 2017 projections.

As discussed by the TokenPay team last month, it is important to understand the history of this deal, they stated:

“We were approached by WEG Bank in December 2017. The bank has an interest in offering FinTech solutions that will align itself with the new economy, while at the same time continuing to service its existing real estate client base in a traditional fashion. Our leading technology complex is what ultimately afforded us the opportunity to be selected by the bank for this partnership. We feel that the selection of TokenPay is a strong testament to our advanced knowledge and the amazing team that powers our platform.”

Lichtenstein Bank and Partnership

TokenPay also stated that they have recently been approached by a bank in Lichtenstein with a similar type of proposition. The TokenPay team is planning to meet with this bank in June and expects to be able to form a comparable partnership to the one formed today with WEG Bank.

Now that this deal has been completed, TokenPay further reported today that it has entered into a non-binding verbal commitment with a potential partner to bring its technological blockchain expertise to the partnership. The details of this potential deal are covered under the secrecy provisions NDA. However, the team does expect this deal to close by the end of the month.

This content was originally published here.

How Blockchain Could Give Us a Smarter Energy Grid

On an electricity grid, electrons generated from the sun, wind, or other renewable sources are indistinguishable from those generated by fossil fuels. To keep track of how much clean energy is produced, governments around the world have created systems based on tradable certificates.

Problem is, the way we manage these certificates “sucks,” and it’s holding up investment in renewable power, says Jesse Morris, an energy expert at the Rocky Mountain Institute. A new system based on blockchain, the technology at the heart of Bitcoin and other digital currencies, could fix this, he says.

Keeping track of renewable-energy certificates is one of dozens of potential applications of blockchain technology that could solve data management challenges in the electricity sector without disrupting business as usual, according to Morris. He and many others believe that in the long term, the technology could help transform the very architecture of the grid itself.

A blockchain is a shared, encrypted ledger that is maintained by a network of computers. These computers verify transactions—in the case of Bitcoin, the transfer of cryptocurrency between individual users. Each user can access the ledger, and there is no single authority (see “Why Bitcoin Could Be Much More Than a Currency”). Advocates say the technology could be especially promising in industries where networks of peers—electricity producers and consumers, connected via the grid, for instance—depend on shared sets of data.

When a renewable-power plant generates a unit of electricity today, a meter spits out data that gets logged in a spreadsheet. The spreadsheet is then sent to a registry provider, where the data gets entered into a new system and a certificate is created. A second set of intermediaries brokers deals between buyers and sellers of these certificates, and yet another party verifies the certificates after they are purchased.

Such a byzantine system racks up transaction costs, while leaving plenty of room for accounting errors that can range from honest mistakes to outright fraud. The lack of transparency also scares many people off entirely.

What if the meter wrote the data directly to a blockchain instead? Most of these problems would vanish at a stroke, says Morris.

And that’s just the beginning—many energy experts are convinced that blockchain technology has the potential to touch off a fundamental transformation of modern energy grids.

The electricity sector is, for the most part, still based on massive, centralized power plants that generate power sent long distances over transmission and distribution lines. In recent years, though, a growing number of smaller “distributed” power generators and storage systems, like rooftop solar panels and electric-vehicle batteries, have been connecting to the grid.

The owners of these systems struggle to maximize their value because the system is so inefficient, says Jemma Green, cofounder and chair of Power Ledger, an Australia-based startup developing a blockchain-based platform that allows producers to trade energy peer-to-peer with consumers. For instance, it generally takes 60 to 80 days for an electricity producer to get paid. With a blockchain-based system, Green says, producers can get paid immediately, so they need less capital to start and run a generating business.

In such a system, neighbors could simply trade energy with one another—a far more efficient process than selling electrons back to the grid first. Power Ledger has demonstrated a product that can turn an apartment building into a microgrid based on a shared system of solar panels and battery storage, for example. Another company, called LO3 Energy, set up a neighborhood microgrid in Brooklyn.

But the traditional system “hasn’t yet figured out how to deal with” this kind of local trading, Green says. “How much should you pay for using a discrete part of the network?” She says her company’s platform—and blockchain technology in general—can “add a level of sophistication to the market by enabling those more granular transactions.”

To unleash the potential of blockchain in the energy sector, Jesse Morris’s team at RMI has joined with Austria-based blockchain startup Grid Singularity to create a new nonprofit called the Energy Web Foundation. Earlier this month, the EWF launched its own blockchain, which Morris says is “purpose-built for the energy sector.” Based on Ethereum, the network will be a test bed for promising use cases. To validate transactions during the test, EWF will rely on 10 major energy companies that have signed on as affiliates.

The team will begin with applications like tracking renewable-energy certificates. In the longer term, though, Morris envisions a world in which homes and buildings are equipped with software that automatically sells and buys power to and from the grid on the basis of real-time price signals.

This content was originally published here.