Unverified Rumor Circulating That Amazon May Accept Bitcoin By October

Unverified Rumor Circulating That Amazon May Accept Bitcoin By October

 

Rumors are circulating that Amazon may begin accepting Bitcoin

as a payment method this October. The rumors appear to stem from a recent report on squawker.org, Some surveys have indicated that the company would have a financial reason to do so, but no official announcement has been made.  The squawker.org article references a mention in investor James Altucher’s newsletter. According to the source, Altucher is an experienced trader who many believe could have pre-announcement information.

The article comments:

“James Altucher has (co)founded more than 20 companies, authored 11 books, and has been a contributor to several major publications.He is a former hedge fund manager and venture capitalist turned activist blogger/podcaster and offers a subscription based mailing list – the source of the Amazon information.”

Such an announcement is a long shot, but isn’t inconceivable. As online retailers begin to embrace Bitcoin, Amazon will likely respond in kind, in order to maintain its dominance. Overstock CEO 

Patrick Byrne said:

“They have to follow suit. I’d be stunned if they don’t, because they can’t just cede that part of the market to us, if we’re the only main, large retail site accepting Bitcoin.”

Following suit

The move would also continue a trend that began with Overstock and has included other enterprise-level tech companies. A recent comment within a Google API tutorial has led many to believe that the online behemoth will also begin accepting Bitcoin within the Google Store, as PayPal and others already do. As recently as this summer, users were petitioning Jeff Bezos, CEO of Amazon, to begin accepting the cryptocurrency. The move may occur as early as October 26th, during the next earnings conference call. It should be reiterated that this is likely only a rumor at this point, and could be swiftly put to rest. Nonetheless, it is interesting to speculate on the possibilities if Amazon does one day integrate Bitcoin. As the adoption of Bitcoin and cryptocurrencies grow, retailers will need to join the progression toward acceptance in order to remain relevant.

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Gibraltar’s Financial Regulator Takes Note of ICO Boom, Issues Warning

Gibraltar’s Financial Regulator Takes Note of ICO Boom, Issues Warning

 

Regulators across the world are waking up

to the fact that there is a serious amount of money changing hands during ICOs.
The latest to issue a statement about ICOs is the Gibraltar Financial Services Commission .

Gibraltar – An established Finance Centre

Gibraltar, a British Overseas Territory located south of Spain, is an established international financial centre. Major international finance firms have established a presence there, to benefit from low taxes, access to the EU single market and an established legal system. Casinos and finance firms are the growth engines of Gibraltar. Experts had previously opioned that Gibraltar could be a great place to set up Bitcoin-based funds. With increasing numbers of ICOs, the Gibraltar Financial Services Commission has issued a statement saying that it is putting in place a regulatory framework for companies which use Blockchain (or distributed ledger technology) to store or transfer value. This framework is expected to be in place by January 2018. It has warned investors that ICOs are highly risky and speculative, and investment is best left to professionals who are experienced in assessing that risk.

USA and then China take Action

The SEC in the United States has periodically issued warnings about the risks posed by investing in ICOs. In July 2017, it came out with a clear announcement that ICO tokens may be securities, in which case ICOs would have to follow all the rules and regulations associated with securities offerings. While it did find that the Ethereum DAO indeed constituted a securities offering, it did not file charges and used this as an opportunity to educate the fledgling industry. China's recent action against ICOs was sudden and abrupt. In September 2017, China banned all ICOs, classifying them as illegal fundraising. China also asked all organizations and individuals to return money raised through ICOs.

Investor Frenzy in 2017

The ICO mania exploded in 2017. From around $250Mn raised through ICOs in 2016, the amount of money raised in ICOs in year-to-date has exceeded $1.5 bln (and there are still three months left in 2017). The ICO mania started in the first few months of 2017, when divisions within the Bitcoin community about scaling resulted in investors looking elsewhere. A deluge of money was poured into altcoins, resulting in their valuations reaching stratospheric levels. This resulted in many companies planning ICOs, issuing tokens to fund their development. Since these tokens tend to jump in price when they get listed on exchanges, investors treated ICOs as speculative vehicles and companies have been able to raise millions of dollars in a matter of minutes.

Is a Balance between Over Regulation and Free-For-All Possible?

Before the ICO boom, early stage companies had few options but to turn to venture capitalists (VCs) to raise funds. This resulted in a system of checks and balances, since VCs did their own due diligence about the viability of a company's business model. VC involvement also imposed discipline by limiting the way these companies could use the funds raised. With the advent of ICOs, companies have a quicker and easier option to raise money.

Unfortunately, any company with a whitepaper and a half-baked business model has also been able to raise significant sums through ICOs. Hence regulators have tried to step in before individual investors lose money in fraudulent ICOs. A balance has to be found, where only select investors such as high net worth individuals (the SEC calls them “accredited investors”) can invest in ICOs. Even then, ICOs should be required to meet basic disclosure requirements. Reasonable solutions must be found that don’t strangle the newborn ICO industry, but that don’t allow too much harm to come to individual investors.

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Digital Currency Mining May Look Much Different in 2025

Digital Currency Mining May Look
Much Different in 2025

 

Digital currency mining has reached the point

where all mining equipment combined uses more electricity than Iceland. However, the cryptocurrency market capitalization is still minuscule in comparison to other traditional markets. Such electricity consumption may soon become unsustainable if the adoption rate of digital currencies continues to grow at its current pace.

Higher mining difficulty

Bitcoin mining difficulty is adjusted every 2016 blocks to remain at roughly 10 minutes per block. As more mining capacity is brought online, the difficulty increases accordingly. Thus difficulty increases proportionally to the increase in computing power of the network. The mining difficulty of both Ether and Bitcoin has increased exponentially since their respective genesis blocks. This trend will likely continue as adoption keeps increasing. Therefore, digital currency  miners will have to constantly acquire more powerful mining equipment. The times where everyone could mine Bitcoin with his/her personal computer are long over.

More centralized

The rising mining difficulty has forced miners to keep buying new and more powerful mining equipment. The problem is that these super-computers are also very expensive, creating a significant barrier to entry that only those with deep pockets can overcome. Mining benefits greatly from economies of scale, which further limits the ability of small-time miners to be competitive. Because of this, mining has become heavily centralized. AntPool claims to be the largest cryptocurrency cloud mining company in the world, controlling 17.82 percent of the hashpower of the Bitcoin network. Most mining companies are located in China due to the low cost of electricity and labor.

Green alternatives

As the hashrate of Blockchain networks keeps increasing, the amount of mining hardware will continue to grow. These mining computers consume vast amounts of energy, and this is with the entire cryptocurrency market being relatively miniscule in size. One can only imagine how much electricity will be used for mining if digital currency becomes mainstream. Unfortunately, the electricity that powers these machines usually comes from non-renewable sources of energy, which contributes to climate change.

Austrian company HydroMiner is one of the few mining companies that are planning to make mining more sustainable and profitable by using renewable energies. Nadine Damblon, CEO at HydroMiner, pointed out in an interview for CoinNoob that there already are companies using solar energy for mining, but that hydroelectric power is probably the better solution since it’s more consistent and because the water can then be used to cool down the mining equipment.

Proof of stake

In a proof of stake (PoS) network, every validator owns a portion of the network. This is much different from Proof of Work (PoW) where every validator needs to own expensive mining equipment. PoS also encourages greater decentralization of the network, since all the currency holders are involved in securing the network in proportion to the amount of currency they own. Additionally, PoS is extremely energy efficient, since there is no need to make computationally difficult calculations. It also enables much faster validations. Proof of stake does have a couple of drawbacks, with the most serious being the “nothing at stake” problem. Imagine that a network which uses PoS is under attack by a hostile actor who is trying to supplant the valid Blockchain with one of his own. It makes economic sense to “mine” on both Blockchains, since it costs you nothing to do so.

In fact, that’s the smart thing to do, just in case the attacker succeeds. With Proof of Work, a miner must instead decide to mine on one chain or the other, since mining equipment can only be used on one network at a time, and burns expensive electricity doing it. Blocks on the Bitcoin Blockchain will always be verified through PoW. However, Ethereum is moving towards PoS with its new “Casper” protocol. If successful, this will enable Ether holders to stake their coins in a smart-contract in exchange for transaction fees. Many are eyeing Ethereum to see if they can in fact solve the heretofore intractable problems with Proof of Stake.

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Central Banks and Govts Are Pro-Blockchain, 80% Consider Centralized Cryptocurrency

Central Banks and Govts Are
Pro-Blockchain, 80% Consider Centralized Cryptocurrency

 

According to a recent study by the Cambridge Centre

for Alternative Finance, central banks around the world are strongly in favor of Blockchain technology. This, in spite of the recent report by the ECB that Blockchain technology is too immature for widespread use. According to the study, central banks surveyed indicated that 20 percent of central banks will be using Blockchain technology by 2019, and 40 percent will have active Blockchain applications within a decade.

Priorities

Among the respondents, however, many declined to give time frames but indicated that Blockchain technology was high on their priority list. The findings indicate what many market researchers had already been noting, namely, that the banking industry is starting to grasp the power of Blockchain technology.

The central banks who responded indicated that they are most interested in using Blockchain technology for permissions platforms or protocols, but also indicated strong interest in both Bitcoin and Ethereum. Ironically, a large percentage also indicated that they are considering using Blockchain technology to create their own central bank-issued digital currency. In fact, more than 80 percent of the banks surveyed indicated that this was the main reason they were conducting research. The findings represent a new shift in adoption away from government free cryptos to attempts at centralized digital currencies.

Governments embracing crypto?

The use of Blockchain in the government sector has certainly been increasing. From railway lines to mining farms in Russia, Blockchain technology and cryptocurrencies are on government's’ radar. Other applications appear to be coming on line as well, including Blockchain-based data security after the Equifax hack, and Blockchain based voting systems like Horizon State, which has created a platform for fraud-free voting through Blockchain for state use.

Founder Jamie Skella said:

“For the first time in history, thanks for the post-unforgeable characterises of distributed ledger transactions, we have a ballot box that cannot be hacked. When the result of a vote cannot be tampered with, unprecedented trust amongst communities – and indeed companies – is delivered for constituents.”

With central banks around the world embracing Blockchain technology, and governments seeking solutions for data tampering and fraud-less voting, Blockchain technology will continue to gain market share.

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Is Bitcoin’s Volatility Such a Bad Thing?

Is Bitcoin's Volatility Such a Bad Thing?

 

One reason used by Bitcoin opponents,
to attack it is its high volatility.
Is high volatility such a bad thing for Bitcoin after all?

Highly volatile asset class

One reason why traditional investors have shunned Bitcoin is that its price has swung from one extreme to another. Its price increased from around $1,000 at the beginning of the year to a peak of over $5,000 in September 2017 (gain of +400 percent), before crashing to a low of $3,000 (-40 percent from its peak). Even this represents an improvement from the initial days when Bitcoin price crashed from $32 to $2 in 2011 (a drop of 94 percent). There have been periods of low volatility, but these have been few and far between. Bitcoin may be called digital gold, but in terms of volatility, it looks more like stock markets on steroids.

Volatility is an opportunity for traders

For day traders and short-term investors, volatility presents an opportunity for making profits. By correctly predicting the short-term trends in Bitcoin, traders can make substantial profits; much more than investors who have a buy-and-hold strategy. Highly volatile markets also create demand for secondary derivative products like options. As the cryptocurrency market develops, we could see increased trading of derivative products rather than actual trading of Bitcoin. As per the London Bullion Markets Association, it is estimated that 95 percent of gold trading in London is in unallocated metal (which is not settled). Bitcoin is still in its infancy, but as the market develops we could see the same trading characteristics in Bitcoin as well.

Bane for merchants

Merchants, no matter how tech-savvy they are, hesitate to accept Bitcoins for their goods and services. Their core competence lies in providing goods and services, not in managing Bitcoin's volatility. They work on thin margins and hate even the one to two percent transaction fees imposed by credit card companies. The Bitcoin price can move substantially between the time they accept Bitcoins from customers, and they sell these Bitcoins in exchange for their local currency. This price movement can wipe out their entire profitability. This is the reason why most merchants accept Bitcoin only through payment processors like Coinbase, which removes the risk associated with holding Bitcoins. In the end, merchants have to pay their bills using fiat currencies, not Bitcoin.

Volatility inevitable during growth

Bitcoin is a relatively new asset class. Although the level of awareness about Bitcoin among the general population has increased, only a small proportion of them hold significant amount of Bitcoins. Moreover, institutional investors have largely avoided Bitcoin, given its unregulated nature and the risks associated with it. As Bitcoin adoption increases and demand increases, its price can move up rapidly. Similarly, when there is negative news about Bitcoin, like the Chinese shutting down cryptocurrency exchanges, some of the holders of Bitcoin will sell and its price can crash rapidly. Until the holding of Bitcoin becomes widely distributed and its liquidity improves substantially, we will see substantial volatility in Bitcoin price.

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China’s Crackdown on Cryptocurrency Trading. A Sign of Things to Come?

China’s Crackdown on
Cryptocurrency Trading.
A Sign of Things to Come?

China’s Relationship with Bitcoin

The Chinese government released a list of 60 initial coin offering trading platforms and instructed local agencies to make sure all platforms were listed and closed down. The delayed crackdown is in line with previous practice in China. The Chinese government often adopts a wait-and-see approach to activities that are largely unregulated until the magnitude of the activity becomes clear. The extent of speculative investment and the risk of losses to investors if the bubble bursts motivated the government to intervene in cryptocurrency trading. In China, the popularity of cryptocurrencies has been boosted by the tightening of controls on money moving out of the country over the past two years. This has lowered the value of the China’s currency, the renminbi, as investors seek assets in different denominations and chase higher yields. Cryptocurrencies are also popular because they can be used to transfer funds offshore and circumvent foreign exchange controls.

The government is particularly concerned with the use of cryptocurrencies and initial coin offerings to perpetrate and disguise fraudulent activity, including money laundering and ponzi type investment schemes. Chinese authorities are anxious to avoid any social unrest in the lead-up to the 19th Party Congress. The effects of the 2015 stock market collapse, where the A-share market lost one-third of its value over a period of one month, are still being felt. In some respects, the regulatory intervention in China is mirrored in other countries that have been dragging their heels in coming to terms with cryptocurrencies. It was only in July this year that the US Securities Commission issued a report determining that DAO tokens were “securities” and must be regulated accordingly.

China’s Own Cryptocurrency

In January last year, the People’s Bank of China issued a notice announcing it would be issuing its own digital version of the renminbi. The notice highlighted the benefits of a government backed digital currency in terms of cost, coverage, convenience and security. In the initial phase, it’s likely that trading in this digital currency will be limited to regulated entities such as banks along similar lines to trading on the conventional foreign exchange markets.

By launching its own digital currency, the Chinese government avoids the risks associated with privately-issued cryptocurrencies and ensuring they are not used as a means of circumventing China’s strict capital and currency controls. The ConversationWhen China introduces its own digital currency (no formal date has yet been announced), the impact on the global economy will be significant. Not only will it challenge the existing global payment systems and establish China as a leading rule maker in this area, it will also enhance the importance of the renminbi as a global reserve currency.

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Bank of Russia Opposes Cryptocurrency Legalization, Worried About ‘Loss of Control’

Bank of Russia Opposes Cryptocurrency Legalization, Worried About
‘Loss of Control’

The head of the Central Bank of Russia has spoken

against the legalization of cryptocurrency at a meeting between President Vladimir Putin and representatives of the Russian business circles and associations. Meanwhile, the finance ministry is drafting a bill to legalize cryptocurrencies such as bitcoin and regulate their circulation.

Central Bank Worried About Loss of Control

Russian President Vladimir Putin met with representatives of the Russian business circles and associations on Thursday. The meeting was attended by over 50 business leaders, CEOs of leading companies, banks and public organizations. At the meeting, Elvira Nabiullina, the head of Russia’s central bank, spoke out against the legalization of cryptocurrency in Russia. This was conveyed to journalists on Thursday by the president of OPORA Russia public association, Alexander Kalinin, according to Tass. Regarding cryptocurrencies, the central bank “opposed their legalization in the Russian Federation,” he explained,

noting that:

Elvira Nabiullina said that the central bank is against, because this is actually a loss of control over the money flows from abroad.

 

Meeting Between Putin and Representatives of the Russian Business Circles and Associations. Early this month, news.Bitcoin.com reported on the Bank of Russia issuing a statement warning about the risks of digital currencies including bitcoin as well as initial coin offerings (ICOs). “The Bank of Russia considers it premature to admit cryptocurrencies, as well as any financial instruments nominated or associated with cryptocurrencies, to be circulated and used in organized trades and in clearing and settlement infrastructure on the territory of the Russian Federation for servicing transactions with cryptocurrencies and derivative financial instruments on them,” the bank’s statement read.

A few days after the above statement was issued, Nabiullin said at the Moscow Financial forum 2017 that cryptocurrencies will not be admitted to the Russian market as money surrogates, Tass reported at the time.

She was quoted saying:

The use of cryptocurrency as a monetary surrogate is actively proposed for the calculation of goods and services, in our view, this has the risk of undermining monetary circulation and, of course, we will not allow the use of cryptocurrency as a money substitute.

Finance Ministry Favors Legalization

While the central bank opposes the legalization of cryptocurrencies, the Russian finance ministry is drafting a bill to legalize them, according to the Finance Minister Anton Siluanov early this month. News.Bitcoin.com reported on him stating that the draft law, which provides the legal framework for the circulation of cryptocurrencies in Russia, will be prepared by the end of this year.

As the legal framework is being drafted, discussions are underway regarding how to define cryptocurrency. Deputy Finance Minister Alexei Moiseev proposed in August for cryptocurrencies including bitcoin to be regulated as financial assets and be listed on stock exchanges, such as Moscow Exchange. However, he also suggested that they should only be available to qualified investors. This idea did not receive strong support from other government officials.The finance minister suggested at the Moscow Financial Forum that, instead of banning them from individuals, they should be made available in the same way federal loan bonds (OFZ) are currently.

The finance minister suggested at the Moscow Financial Forum that, instead of restricting them to qualified investors, they could be made available to anyone in the same way federal loan bonds (OFZ) are currently. First Deputy Prime Minister Igor Shuvalov also made a statement following Moiseev’s suggestion. Regarding Moiseev’s proposal, he said “this is only the proposal of experts,” RIA Novosti reported. He added that there is still no official definition or legislation of cryptocurrency but this matter will be seriously discussed “in the near future.”

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Australia Ends Double Taxation of Bitcoin, Cryptocurrencies / First Bitcoin-Only Real Estate

Australia Ends Double Taxation of Bitcoin, Cryptocurrencies

 

The Australian government has finally and conclusively

provided a legislative end to the double taxation of Bitcoin and other cryptocurrencies. The bill will retroactively be enforced to July 1 of this year, as had been promised earlier in the year. The bill ends the practice of taxing the purchase of Bitcoin and other cryptocurrencies, according to the Australian goods and services tax (GST). The release regarding the end of the double taxation standard included

the following:

“Currently, consumers who use digital currency can effectively bear GST twice: once on the purchase of the digital currency, and once again on its use in exchange for other goods and services subject to the GST. The bill will ensure that Australians are no longer charged GST on purchases of digital currency, allowing it to be treated the same way as physical money for GST purposes."

The current Australian government hopes that the bill will open doors for greater levels of Fintech investment into the country. As the Chinese government moves to crack down on ICOs and cryptocurrencies, the Australian government is seeking to embrace the sea change in the financial world.

First Bitcoin-Only Real Estate Transaction Completed in Texas

 

Use cases for Bitcoin have been popping up everywhere,

with new ‘Accepts Bitcoin’ signs on everything from coffee carts to retail stores in South Africa. These adoption cases are important as the continued use of Bitcoin will only increase the adoption and price cycle, commonly referred to as a Satoshi cycle. In a new and interesting twist, an entire real estate transaction has taken place via Bitcoin. In other words, you can now buy your house with Bitcoin…at least in Texas. The transaction was for the purchase of a newly built custom home, and the full purchase price was transferred to the seller/builder via Bitcoin. The seller then converted the coin into USD. The broker for the

purchase said:

"In all of my 33 years of closing transactions, I honestly couldn't have expected something so unique to go so smoothly. In a matter of 10 minutes, the Bitcoin was changed to US Dollars and the deal was done!”

The purchase of the home as an agreement between buyer and seller represents another step toward widespread acceptance of the currency. Other companies are seeking to use tokenization of assets to allow smaller-scale real estate investment via Blockchain technology as well.

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Here’s The Man Who Created ICOs And This Is The New Token He’s Backing

Here's The Man Who Created ICOs And This Is The New Token He's Backing

 

The video begins with a loud, hyper, motorized ticking noise.

The camera zooms in, between the backs of some mens’ heads, to show a conference panel. The screen gets darker, the camera jolts back and forth, then it shows the backs of chairs, then everything goes blurry …. It seems like the last video anyone would want to watch. (Quite literally. More than four years after it was published, it still only has 94 views.) But four and a half minutes in, one of the panelists begins to describe an idea he’s had:

“If you wanted to, today, start a new protocol layer on top of Bitcoin, a lot of people don’t realize, you could do it without going to a bunch of venture capitalists and instead of saying, hey, I’ve got this idea, you can — you’re familiar with Kickstarter I assume? Most of you? You can actually say, okay, here’s my pitch, here’s my group of developers — there’s a lot of developers in this room. If you get a bunch of trustworthy guys together that people have heard of and say, okay, we’re going to do this. We’re going to make a new protocol layer. It’s going to have new features X, Y and Z on top of bitcoin, and here’s who we are and here’s our plan, and here’s our bitcoin address, and anybody who sends coins to this address owns a piece of our new protocol. Anybody could do that. And I’ve been telling people this for at least a year now because I want to invest in it. I don’t have a ton of coins, but that’s where I want to invest my coins. And I’ve yet to find somebody who wants my coins. Does anybody in this room want my bitcoins because I want to—”

“I’ll take them,” someone shouts, and the video ends.

It was the 2013 San Jose Bitcoin conference. By that point, the panelist, J.R. Willett, had been hawking his crazy idea for more than a year. In January 2012, on the Bitcoin Talk forum, the Seattle-based software engineer published a white paper titled, “The Second Bitcoin White Paper.” (To quote the summary: “We claim that the existing bitcoin network can be used as a protocol layer, on top of which new currency layers with new rules can be built …. We further claim that the new protocol layers … will provide initial funds to hire developers to build software which implements the new protocol layers, and … will richly reward early adopters of the new protocol.”) Seventeen months later, still no one had tried it. Little did he know it would be five years before the idea in his white paper would become a runaway trend (built on Ethereum instead of Bitcoin, but the same concept nonetheless), raising $2 billion in just the first nine months of 2017 and leaving venture capitalists fretting about the future: the initial coin offering.

Though Willett, who’s been obsessed with Bitcoin ever since he discovered it in 2010, did finally launch the first ICO, Mastercoin (now called Omni), back in 2013, he’s not been involved in cryptocurrency in recent years — until now.He’s found what he calls “the perfect token sale” and is backing it with more than $1 million of his own money — and not even at a pre-sale price. (“I feel pre-sales stink of insider favoritism, so we’re not doing a pre-sale,” he wrote via email.) The so-called UpToken, whose sale begins October 16, is also different from the tokens that have garnered the most attention this year — those powering new decentralized blockchains and apps built on top.

So what exactly is Willett backing? What he calls the “shovels” in this digital gold rush: crypto ATMs (by Washington-based company Coinme) with tokens that offer discounts and cash back to token holders. While ATMs — physical infrastructure that have been around since the 1970s — don’t feel like they belong in a blockchain-based future, Willett says, “This really pushes crypto assets/crypto economy to new audiences and opens that gateway to people who will learn about Bitcoin perhaps just by walking in the mall and seeing the Bitcoin ATM.” Whether or not Willett's new venture aiming to "put a crypto ATM on every corner" will turn out to be an instance yet again in which he was two steps ahead or an idea whose time has passed remains to be seen.

From Penny Stocks To Magic Internet Money

In 2010, the quirky, affable Willett was a software engineer who had an intellectual interest in “these ridiculous penny stocks would float way up and crash.” He traded them on paper, but not with actual money. He was also researching, payment systems for some personal projects, when he read that credit card chargebacks could be avoided with Bitcoin. At that point he fell down the rabbit hole. “I spent days just reading everything I could about this,” he says. “I didn’t know if Bitcoin would be huge itself, but I thought, something that looks a lot this is going to take over the world and I really would like to own a piece of it.”

But with two children and another on the way, there wasn’t a lot of extra money to throw into a speculative investment — especially one in which the exchange options were, one, the “sketchy-looking” Mt. Gox website, which was named for Magic the Gathering cards and subsequently lost almost half a million dollars worth of Bitcoin, and two, mailing an envelope full of cash to a guy in Canada who would send you bitcoins back.

For months, he and his wife argued, with him insisting Bitcoin could be huge. “Watching the penny stocks — the dumbest things would suddenly take off because someone was pumping them up and others were legitimately hyping these ideas that were getting people excited, and some were blatant scams. In fact, it reminds me a lot of the ICO market today,” he says. But he believed Bitcoin could get into a speculative bubble. “People on the Bitcoin forum were already moaning about the speculative bubble from 1 cent to 25 cents. How could something go up 25 fold? Everyone was saying, this is unsustainable, this is a crash, it’s going to end in tears. And I was thinking, this could go so much higher.” Finally, after four months of bickering, his wife gave him $200 for both his birthday and Christmas and said, “Flush it down the toilet if you want to.” With that money, he launched a Bitcoin mining scheme — in which he paid random people from Craigslist monthly to run his mining software.

From Sleepless Nights To The First ICO

But mining bitcoins wasn’t enough. Willett kept lying in bed night after night, trying to imagine what would happen with cryptocurrency. He dreamed up something like contracts on top of Bitcoin, the way email is layered on top of TCP/IP, but wondered how he could pay for its development. Realizing he could float a coin on top of Bitcoin that buyers would automatically own if they sent bitcoin to fund its development, he wrote the white paper but didn’t want to play entrepreneur himself. Finally, after a year and a half of promoting his idea, he became so frustrated no one was trying out his idea, he decided to do what he called an “initial distribution” himself. “Basically the reason I did the first ICO is that I just wanted to prove that it would actually work,” he says.

The invention of the ICO “did not seem like such a big deal at the time,” though Willett says it was this “bizarre feeling of, whoa, I published a white paper and an address, and strangers were sending me money.” And though Mastercoin proposed all sorts of ideas like decentralized commerce and a decentralized exchange, Willett soon realized, “What everyone got really excited about was, hey, I can publish a paper and people will send me money. Literally within a few months, other projects were doing the same thing — the most famous of which was Ethereum.”

But Willett was correct that launching a new venture was stressful. First, soon after launching the sale, “there were literally people saying I’ve reported you to the SEC, you’re going to go to jail,” says Willett. “I got really worried about the SEC swat van — if there is such a thing — kicking down my door and dragging me off in the middle of the night.” (He hadn’t consulted a lawyer.) Then, there was the fact that, after raising $500,000 worth of bitcoins, the price jumped tenfold. Suddenly he had $5 million to keep safe. Though at first he had contractors working to develop Omni while he kept his full-time job, once the token reached 100 multiples of its ICO price, he sold just 2-3% of his tokens — “just enough to make my wife happy to be able to quit my job,” he says. But then it went down almost a hundred-fold. Within a year, he was back at his old employer, Cozi, working on a calendar applications for families.

This year, watching ICOs take off, Willett had mixed feelings. On one hand, “I worry about unsophisticated people losing their shirts,” he says. On the other, he says, “token sales allow people to participate in a number of exciting projects at a very early stage,” and he finds it exciting that projects that are doing good work can now “get the funding they might otherwise not have gotten to push the ball forward in the crypto economy.”

‘The Perfect Token Sale’

When Bitcoin ATM purveyor Coinme called Willett, he became convinced ATMs were the next big expansion of the crypto economy — as long as their network was powered by a token. He persuaded the team to adopt what they’re calling UpToken, which is designed like loyalty points, and quit his job again in July. He now serves as a contractor on the project.

While it seems counterintuitive that many people would buy digital currencies through a physical ATM, Coinme cofounder and CEO Neil Bergquist says, “Bitcoin appeals to a technical audience. The majority of the world is non-technical, and what they need is a physical portal to participate not only in the crypto economy but also in financial transactions in general.” On top of that, he says, the experience can be preferable to a process even as easy as a service like Coinbase’s where it can take about a week from time of purchase before the coins show up in your account. “We get calls and Facebook posts every day from people saying, this was amazing, I just bought my first bitcoin, it was so easy and instant,” says Bergquist. On top of that, the transaction allows more privacy, whereas signing up for an online exchange may require you to link your bank account. Plus, crypto exchanges have a long history of being hacked.

But just how popular crypto ATMs can prove to be and how much volume they can handle remains to be seen. The average ATM volume per month is only $100,000 and Coinme currently has 39 in Washington state, while fewer than 1,600 exist total worldwide, compared to an estimated three million fiat ATMs. However, Bergquist isn’t banking everything on the ATMs. “We see ATMs as the beachhead,” he says, adding that Coinme gives customers their own Coinme wallets, crypto IRA and 401(k) offerings and other financial services. The company even has a private client division for customers who want to buy and sell up to $1 million of cryptocurrency a day.

But if ATMs are the beachhead, the troops need to be increased. About 85% of all Bitcoin ATMs are located in North America and Europe, which the same geographies where the unbanked are a lower proportion of the population than the rest of the world. Perhaps a token could rev up demand for more ATMs — which is the purpose of UpToken. Every ATM user receives a cash back equivalent to 1% of the ATM fees, which range from 5-10%, in UpToken. Any customer who pays for their transaction fees in UpToken will receive a 30% discount on such fees. And UpToken holders will be able to vote on the new cryptocurrencies to be added to the network. Willett says this is the “perfect” token sale because it’s grows in accordance with the amount raised. Also, for UpToken, it doesn’t matter whether Bitcoin or Ethereum or another coin we may not yet know becomes the dominant coin.

As for whether this offering could get the “SEC swat van” to come running, Marco Santori, a partner at Cooley who is familiar with how securities law may apply to crypto assets, says the risk that a coin like UpToken is labeled a security is low. On top of that, he thinks crypto loyalty points is the wave of the future. “I think [crypto loyalty points have] the potential to unlock a tremendous amount of value in industries that have really been untouched by the technological revolution over the last 10 years. Affinity points — airline miles and loyalty haven’t changed very much over time, for example,” he says.

However, Spencer Bogart, head of research at Blockchain Capital, says the setup is like “a big Rube Goldberg machine.” Noting that he believes that tokens seem best for businesses that want to build a network effect — where early adopters benefit the more people end up joining the network — he says, “The ATM experience is not better to me because other people also use the ATM. I don’t care if 100 of my friends use the ATM or don’t use it or anybody in San Francisco uses it or doesn’t use it.” On top of that, he says competitors could just charge better rates instead of offering discounts. Or, pump-and-dumpers could buy a lot of UpTokens to have their coin added to the network and then sell if their coin wins and the price jumps.

Coinme ATM users who received UpToken with the 1% reward may not like the fact that they can't touch their Uptokens until they've amassed $10,000 in ATM transactions, but Bergquist explains this is like not being able to redeem airline miles until you've earned at least 10,000 miles.

As for Bogart's network effect criticism, Bergquist says that the vast majority of Coinme users have never purchased a Bitcoin before, so "the network effect of UpToken will be felt across the entire crypto community," he wrote via email. He also says the more ATMs that are deployed, the lower the fees, as small Bitcoin ATM operators can charge as much as 17%. As for people trying to sway elections to pump and dump, Willett, using Litecoin as an example, wrote in an email, "Of the hundreds or even thousands of people who used their UpToken to win that auction for Litecoin, undoubtedly some of them would sell Litecoin as the price went up. I don't see a problem with that. It's still great news for Litecoin to be on a massive worldwide ATM network."

UpToken is a crypto token meant to be used like loyalty points. Compared to some other blockchain projects that are attempting to bootstrap decentralized networks, it should be easy to see whether they've achieve their goal to "put a crypto ATM on every corner." As with his initial idea, only time will tell — but now many more will be watching.

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-4614

Aeron Leverages Blockchain Tech for Safer Flights

Aeron Leverages Blockchain Tech
for Safer Flights

 

Humans have been flying since the Wright Brothers took flight

on December 17, 1903. Flying is considered to be one of the safest modes of transport that humans use. However, accidents do and will happen. It is incredibly difficult to arrive at numbers related to accidents with and without fatalities because of poor record keeping in the early days of aviation.

Boeing publishes the “Statistical Summary of Commercial Jet Airplane Accidents between 1959-2016”, which tells us that there have been 623 fatal accidents involving commercial jet fleets and 1948 total accidents in this time period. However, this number just covers commercial aviation and not private planes that meet accidents. According to the National Transportation Safety Board (NTSB), there were 1,290 air accidents just in 2014 and that too only in the United States. Wouldn’t it be wonderful if we could use new technology to reduce the amount of accidents that happen each year? Aeron is a project that intends to do just that by using Blockchain technology.

Aeron is making aviation transparent and reliable

The key issue to address is the human factor when it comes to aviation safety. Pilot errors, possible corruption in the flight schools all contribute towards unsafe skies. Aeron, by implementing Blockchain technology, can benefit pilots, airlines as well as ordinary consumers. They are planning to integrate Blockchain in such a way, so that pilot logs become more verifiable and transparent. They are also going to implement solutions that will help verify flight school credentials and help aircraft operators access uncorrupted data.

All of this is possible because the Blockchain itself is immutable and records once stored can’t be changed. Combined with the deployment of smart contracts and a cryptographically secure database, Aeron would be able to eliminate falsification, create verifiable logs and basically deliver an “airline in a pocket” through its deployable applications. The workings of Aeron are rather simple. All persons involved in the operation of the aircraft will have access to customised apps. As an example, pilots will have the functionality of personal flight logging in their app.

Aviation companies have the ability to collect and verify data from aviation schools, service companies, airlines and aircraft operators. In the wider ambit, if there is any data mismatch between any Aeron data source, it would be possible to quickly detect the problem and take corrective measures. Aeron will also enable expired pilot licenses to be detected while giving flight school students and consumers the access to a verified global database through aerotrips.com. Aeron has put up a one-pager to explain the workings of the project succinctly.

After a successful pre-sale, Aeron launches crowdsale

Aeron has successfully concluded their presale of Aeron (ARN) tokens and has raised over $1 mln. Now, they are launching a crowdsale that will help them build the platform and develop the technology required, as well as follow up with government relations and lobbying with aviation authorities. In total, 100 mln ARN tokens will be issued. ARN tokens are ERC-20 compliant. Investors have the chance to buy 60 mln of these tokens that are available during the crowdsale. The end date of the crowdsale is Oct. 23, 2017, and each token costs $0.50. Early investors will receive bonus tokens. Investors can visit the Aeron website to secure their bonus tokens. The ICO has been rated 4.8 by Icobench.

Why hold a token sale at all?

The Aeron token sale is their inclusive attempt to gather funds for the project.  Aeron can this way not only gather investors from different parts of the world but also incentivize investors to promote their products. The token sale would enable participants to take advantage of liquidity as these tokens can be traded on various exchanges post the sale. After the token sale, the Aeron (ARN) token will be distributed to the buyers. A maximum of 100 mln ARN would be released and over time the supply will reduce due to lost keys etc. ARN tokens would be used both within and outside of the Aeron ecosystem. The tokens will be used for a subscription fee and transaction-based fee for log entries, commission on paid services, commission on intermediation and client introductions, as a currency for the purchase of aviation services and for flight school-related services.

Aeron is a project led by experts

Aeron is an ambitious project that will start to transform the aviation sector with the passage of time. The project is led by people who have significant experience in the aviation sector. The CEO, Artem Orange is a serial entrepreneur in high tech industries like telecom and is himself an aviation enthusiast. Nadezhda Barkanova, the CTO is a qualified air traffic management engineer with 11 years of work experience and is specialized in production of aeronautical databases, flight crew training and flight simulators. The CDO, Konstantin Gertman has 14 years of experience in consulting and market research as well as financial businesses and is the co-founder of aerotrips.com and is himself an EASA certified pilot since 2013. With this team at the helm, Aeron has the potential to benefit from years of industry experience not only in aviation but also in other crucial technical fields that the project needs to succeed long term.

What is the future for Aeron?

After the crowdsale is over, Aeron plans to utilize a big chunk of the collected funds, up to 40 percent for research and development. Marketing and promotion will take 30 percent, technology infrastructure 10 percent, lobbying authorities, legal consultancy and administration the remaining.

They have plans to build a multi-stage platform over time in phases. In the future, they will be able to offer services related to aircraft maintenance records and even tracking spare parts that would lead to great improvements in flight safety. Aeron has released a whitepaper that lays out in detail their token sale and post-sale plans. Given that they have plans to work closely with each aspect of the aviation industry, be it spare parts manufacturers, airlines, pilots and flight schools. There is a chance for investors to be able to gain from not only investing in the token sale and profiting from future increases in token price but also from the transactional revenues that the tokens will generate for the owners.

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-4614