Bank Blockchain Integration: A Challenge Overcome

Bank Blockchain Integration:
A Challenge Overcome

For the past couple of years, there has been an extraordinary

amount of hype around the potential of blockchain (or more correctly distributed ledger technology) to transform the banking industry. The reason for this hype is quite profound: DLT has given us the opportunity to rearchitect the financial industry. In the years ahead, we will move from a system of many banks with many ledgers (with all the associated reconciliation, central clearing parties, auditing, etc) to a simpler system of many banks but fewer ledgers where reconciliation is automatic. Central clearing parties may no longer be necessary and regulators will have a real-time view of the positions and risks across the industry.

But this transition, if it finally happens, is going to take a long time, and the chief reason is simple: legacy bank infrastructure and the tens of billions of dollars that have already been spent on building that infrastructure. The core bank systems of today, designed with security in mind, are extremely robust and secure. But as a result, they sacrifice flexibility and aren't exactly friendly in how they communicate with other technologies. Luckily though, over the past several years, the APIs of core bank systems have been upgraded to be REST-compliant and some even support events and web sockets. So, integrating a DLT platform with a core bank system can be relatively straightforward even though the underlying DLT network topology, architecture and security considerations may still be a work in progress.

Keeping it simple

The key to any successful integration is to minimize complexity. Certain use cases and transaction processes (e.g. cross-currency swaps) are complex and touch upward of 20 computer systems. And although very promising for the application of DLT, they may not be the obvious place to start as we move forward with the first real-money pilots. Other transaction processes like cross-border payments are simpler, and it is these kinds of applications that are probably the closest to production. So, how do integrations work in practice? At Banco Santander, our Blockchain Lab starts by building a prototype to tackle a specific business problem on a particular DLT platform (ethereum, Hyperledger Fabric, R3's Corda). In order to make the prototype as close as possible to the real thing, first we will build a limited core bank simulator that emulates the core bank systems for that particular application.

Next, we will map out the process flow for the use case that we are building and then spend the next two to three months in a series of sprints that result in an application that is robust enough to demonstrate to the business. If the business leaders like what they see, they may support taking the application to the next phase: pilot. At Santander when we say "pilot," we mean running the application on real money systems, though at limited scale. (The pilot phase is when the bank's IT teams – corporate IT and ops, security, infrastructure – get involved.)

Together, we will do an architecture and security review of the prototype application and figure out all the necessary modifications that will need to be made to plug it into the bank’s pre-production environment. But because we have already been building on core bank simulators, connecting to the real core bank systems becomes significantly easier. These pilot integrations have been taking us four to 12 weeks, depending on the amount of work involved.

Once the pilot integrations have been done, performing a robust series of tests on a defined schedule is the next step. It is during these tests that bugs are identified and squashed. The chief concern here is maintaining atomicity between the core bank system and the blockchain. In other words, it is imperative that the numbers that are reflected in the core bank are exactly the same as the numbers that are present in the blockchain. In practice, though, this is not too difficult to achieve and the two systems play quite nicely with each other. Very nicely, in fact.

A sample use case

A good example of a hypothetical integration process might be the development of a killer app like digital cash (aka a "fiat-backed stablecoin" in industry parlance) that will support micropayments, pay-per-download of digital content and the natural extension of Internet of Things, the machine-to-machine economy. Digital cash as a concept is not new and has been tried before, starting with the original Ripple gateways in 2013 and followed by later attempts like BitAssets that involved backing the stablecoin with a non-fiat asset.

More recent efforts like basecoin are at the white paper stage, with theoretical approaches to creating an algorithmically backed stablecoin. And, while we are waiting for central banks to issue digital versions of their own currencies (very possible, but unlikely to happen for quite some time) existing commercial banks could get the ball rolling. So, what integrations would be needed to deploy a fiat-backed stablecoin? First, we would have to identify the components and integration points needed for a simple tokenized digital cash system as follows:

  • User wallet:
    The user registers his or her blockchain wallet with the digital cash platform. Know your customer(KYC) checks would be performed at this time. An integration with a KYC system is required.
  • Escrow account:
    The account at the bank where the funds from all the different users are pooled. Segregation of those funds happens on the distributed ledger.
  • Tokenizer:
    The interface between the core bank system and the blockchain. This application detects incoming transfers to the escrow account and creates the matching amount of digital tokens in the user’s wallet. It also handles redemptions of tokens and triggers their destruction and the corresponding transfer of real funds from the escrow account back to the user’s bank account.
  • Transactions:
    These occur directly between user wallets on the blockchain. No integration as such is needed, although regulations may require that both wallets conduct KYC in advance and anti-money-laundering (AML) screening might be required for transactions above a certain size

From a technical point of view, building a digital cash application is quite straightforward. Very few integrations with core bank systems are required. The "tokenizer" does most of the work, with KYC and AML being done off-chain if needed. Of course, there are many legal and regulatory challenges that will need to be overcome before bank-backed digital cash becomes a reality on public blockchains.

But for blockchains, particularly smart contract platforms, to reach their true potential and become an integral part of the lives of the Earth's 7 billion people, enabling tokenized versions of real money is an essential step. Admittedly some of the technology is not quite ready to support digital cash at scale. But the good news is that from an integration point of view at least, creating a fiat-backed stablecoin might not be too difficult. In fact, it might be the easiest integration of all.

Chuck Reynolds

Marketing Dept

Please click either Link to learn more about Bitcoin.
Interested or have Questions, Call Me, 559-474-4614

Cryptocurrency boom: Why everyone is talking about ripple

Cryptocurrency boom:
Why everyone is talking about ripple

The craze over bitcoin has given other crypotcurrencies like litecoin and ethereum their moments in the spotlight. Now, it's ripple's turn.

In recent weeks, ripple's value has spiked, making it the second most valuable digital currency and bringing it newfound attention. The relatively obscure cryptocurrency, also known as XRP, is now worth about $2.60 with a market cap of more than $100 billion, according to Coinmarketcap. In early December, it was trading at just 25 cents. Even with the spike, ripple is worth considerably less than bitcoin. After a tumultuous December, bitcoin was trading around $15,000 late Tuesday with a market cap of more than $250 billion.

What's different about ripple is it's controlled by just one company, San Francisco-based Ripple. There are reports of current and former Ripple executives becoming cryptocurrency billionaires from its recent boom. Ripple launched in 2012 to facilitate global financial transactions. It differentiates itself from other digital currency platforms by its connections to legitimate banks. Companies that use the Ripple platform include Santander (SANPRA), Bank of America (BAC) and UBS (UBS).

 In recent weeks, financial services companies in Japan and South Korea have adopted Ripple's technology, helping boost the price of the cryptocurrency. According to Stephen Powaga, head of research at investment firm Blockchain Momentum, ripple and other some other cryptocurrencies have relatively low transaction fees, which made them popular when people began looking for alternatives to bitcoin. But unlike Bitcoin, ripple isn't created, or "mined," by users. The company has control.

It created 100 billion ripple coins initially, and 38 billion of them are in circulation at the moment. Ripple management can release up to 1 billion coins per month, which Powaga predicts could oversaturate the market. North & South Koreans are OBSESSED with bitcoin."It's somewhat concerning for me because if they chose to release them as quickly as possible, within a little over four years, you'd see more than a doubling of supply of ripple," he said.

That could put pressure on its price.

"I'm not certain that some of the newer market participants are fully appreciating the potential for inflation," Powaga said. Cross-border payments that can take hours with bitcoin or days with traditional financial transactions can go through in a matter of seconds with ripple, the company says. Like bitcoin, ripple's payment network, RippleNet, uses blockchain technology. A blockchain is a public ledger containing transaction data from anyone who uses the service. Transactions are added to "blocks," or the links of code that make up the chain, and each transaction must be recorded on a block.

Chuck Reynolds

Marketing Dept

Please click either Link to learn more about Bitcoin.
Interested or have Questions, Call Me, 559-474-4614

Ripple cryptocurrency hits a record high and now a market capitalization of more than $110 billion

Ripple cryptocurrency hits a record high and now a market capitalization of more than $110 billion

  • Ripple, the world's second-largest cryptocurrency by value, hit an all-time high above $2.90 on Wednesday.
  • It marks a more than 45,700 percent rally in one year, according to CoinMarketCap.
  • Ripple works with large enterprises and deals with large financial institutions, which has helped its digital coin, known as XRP, rally

Ripple, the world's second-largest cryptocurrency by value,

  • hit a record high on Wednesday as its strong rally continues.

The digital coin jumped more than 18 percent to an all-time high above $2.90, according to CoinMarketCap. Ripple, or XRP, now has a market capitalization of $112 billion and remains solidly in second place to bitcoin, which has a market value of about $255 billion, according to CoinMarketCap. The website showed ripple has gained more than 45,700 percent over the last 12 months.

Ripple 12-month performance

The digital coin has climbed more than 120 percent over the last week, according to CryptoCompare.

What is ripple?

Unlike bitcoin, Ripple is a company that has created coin known as XRP that is aimed at enterprises. Ripple markets itself as a cross-border payments solution for large financial institutions based on blockchain technology.Currently, an international payment may take a few days to complete, and at a high cost. A headache for banks is high-volume, but low-value, transactions — the kind that Facebook might pay out to app makers, for example. These can often be expensive and unprofitable for banks because it takes a lot of effort to move the money and the percentage cut won't be as high as for a larger transaction.

Ripple is trying to solve this problem via its technology. XRP can be used by enterprises to get instant liquidity needed in a high-value transaction, without having to pay fees. XRP acts as a bridge between fiat currencies during a transaction. Ripple said transactions in XRP can be settled in four seconds, faster than any major cryptocurrency right now.

Why is it rallying?

Ripple has been conducting trials with a number of financial institutions, including American Express and Santander. Its price was also helped by news in December that Japan's SBI Holdings and SBI Ripple Asia, which was formed as a partnership between the two firms in 2016, created a consortium with Japanese credit card companies to utilize blockchain.

Blockchain is the technology that underpins cryptocurrencies, including Ripple.There is also a sense that investors are looking at alternative digital tokens beyond bitcoin. Bitcoin's dominance of the cryptocurrency market hit its lowest level ever on Tuesday, according to data from

Chuck Reynolds

Marketing Dept

Please click either Link to learn more about Bitcoin.
Interested or have Questions, Call Me, 559-474-4614

Bitcoin Billionaires Hiding in Plain Sight

Bitcoin Billionaires Hiding in Plain Sight

Bitcoin’s anonymous yet transparent nature makes for some interesting reading

when trawling through the easily accessible information on the top wallets out there. While these top 10 wallets, do not have names attached to them, some are easy to figure out. The Winklevoss twins made history in early December by becoming the first widely accepted Bitcoin Billionaires. It was estimated at the time of print that the twins held 91,666 which equated to $1.063 bln. However, these high profile twins are one of the few that are solidly in the spotlight that it is easy to speculate on their wealth. It is believed that there could be far more Bitcoin Billionaires out there, lurking in the shadow.

Distributed funds on a distributed ledger

If it was the norm to hold all our funds in one wallet, it would be easy to put together a rich list and speculate who belongs where. However, not only does Bitcoin’s anonymity but its practices of good coin storage, also make things difficult. The normal procedure, especially for those whose funds are closer to billions than hundreds like most mere mortals, is to split the wealth over a number of wallets and other storage methods. It is a lesson that everyone should heed when it comes to keeping one’s fortune on the wild west that is Bitcoin exchanges.

As many as 200 Billionaires

A representative for BitInfoCharts, who wished to remain anonymous because of security concerns, told MSN in an email that, given Bitcoin’s current overall market capitalization and that most people hold Bitcoin at multiple addresses, there may actually be as many as 200 Bitcoin billionaires, and possibly no fewer than 35.

The rep noted that it’s likely most of these addresses are owned by exchanges or hedge funds. A billionaire could keep on being created without much work needing to be done by some of the more than 100 addresses that already have over $100 mln in Bitcoin currently. The growth of Bitcoin has turned many people into millionaires and is doing the same with those people taking the step up to billionaires.

Better to hide in plain sight?

If there are so many of these billionaires out there making a massive profit from some savvy early investing or clever trading perhaps, why are they so hidden and secretive? The king of secrecy and anonymity is, of course, Bitcoin's creator Satoshi Nakamoto who has been estimated to be sitting on one mln Bitcoins. Much has been made over Nakamoto's reasoning for remaining hidden and seemingly out of all Bitcoin activity, but there is also speculation mounting over his fortune which could be rivaling some of the richest men in the world.

The circling regulatory wolves

Of course, one of the biggest reason for remaining hidden when you are sitting on enough money to buy an island is the tax and regulatory implications that could come into play if you were to suddenly show your face. Regulators are playing a game of treat the symptom, not the disease when it comes to Bitcoin as they struggle to keep up. This has seen tax agencies still scratching their heads, leaving massive loopholes for Bitcoiners. However, those with massive fortunes who are publicly known would most likely be the first in the firing line.

Chuck Reynolds

Marketing Dept

Please click either Link to learn more about Bitcoin.
Interested or have Questions, Call Me, 559-474-4614

Bitcoin mania: What the big names of finance are saying

Bitcoin mania:
What the big names of finance are saying

Bitcoin's stunning rise was one of the big stories of 2017, and it's set to divide opinions further this year.

The digital currency's price soared more than 1,300% last year, easily outgunning the returns from many traditional financial assets like stocks, bonds and gold. But while bitcoin has gained greater mainstream acceptance in recent months, it still has a lot of critics. They warn about issues like its volatile price, absence of underlying assets and lack of regulation.

Here are some of the most memorable quotes from high-profile figures in the financial world:


Peter Thiel: 'Great potential'

"If bitcoin ends up being the cyber equivalent of gold, it has a great potential left," billionaire tech investor Peter Thiel said at an investment conference in October. Thiel, an early investor in Facebook (FB), said he thinks people were "maybe underestimating" bitcoin. "It's just a store of value, you don't actually need to use it to make payments," he said.

Cameron Winklevoss: 'A multitrillion-dollar asset'

"Long-term, directionally, it is a multitrillion-dollar asset," Cameron Winklevoss, who founded bitcoin exchange Gemini with his twin brother Tyler, said in December. The brothers, who settled with Facebook CEO Mark Zuckerberg over their legal challenge accusing him of stealing the idea for the popular social network, became the world's first bitcoin billionaires in 2017.

Tim Draper: 'The greatest technology since the internet'

"This is the greatest technology since the internet. This is a sociological transformation, it's a movement," Silicon Valley venture capitalist Tim Draper said in November. Draper has previously backed the likes of Tesla (TSLA) and Skype. He invested in bitcoin three years ago, buying thousands of the virtual coins, which are now worth more than $13,000 each.


Jamie Dimon: 'If you're stupid enough to buy it …'

"If you're stupid enough to buy it, you'll pay the price for it one day," Jamie Dimon, CEO of JPMorgan Chase (JPM), said in October, predicting governments would eventually "crush it." Dimon has been a frequent critic of bitcoin's ascent. He'd previously dismissed it as a "fraud" and threatened to fire any of his bankers who trade it — although he has admitted his daughter owns some.

Janet Yellen: 'It is a highly speculative asset'

"It is not a stable source of value and it does not constitute legal tender. It is a highly speculative asset," Janet Yellen, the chair of the Federal Reserve, said last month. But she played down concerns about a bitcoin bubble leading to a full-blown financial crisis, saying it posed only "limited" risks.Bitcoin attacks fuel traders' frustrations

Warren Buffett: 'A real bubble'

"You can't value bitcoin because it's not a value-producing asset," renowned investor Warren Buffett said in October. He added that its unpredictable price makes it a "real bubble in that sort of thing." The Berkshire Hathaway (BRKA) CEO is a long-term skeptic. He labeled the digital currency a "mirage" back in 2014, when its price was a little over $600.

Lloyd Blankfein: 'A vehicle to perpetrate fraud'

"Something that moves 20% [overnight] does not feel like a currency. It is a vehicle to perpetrate fraud," Goldman Sachs CEO Lloyd Blankfein said in November. He said Goldman (GS) didn't have a bitcoin strategy at that point. But he did leave the door open for the bank to trade the digital currency in the future if it becomes less volatile.

Joseph Stiglitz: It 'ought to be outlawed'

"Bitcoin is successful only because of its potential for circumvention. It doesn't serve any socially useful function," Nobel laureate Joseph Stiglitz said in November. The former World Bank chief economist warned that bitcoin "ought to be outlawed."

Chuck Reynolds

Marketing Dept

Please click either Link to learn more about Bitcoin.
Interested or have Questions, Call Me, 559-474-4614

Bitcoin fans hold on for a very wild ride

Bitcoin fans hold on for a very wild ride

Bitcoin has been a wild ride for those brave enough to invest.

Ankit Patil bought his first Bitcoin for $200 two years ago out of curiosity. When the cryptocurrency's value reached $800, Patil sold it to buy the motherboard, graphics card, hard drive, and other equipment necessary to mine Ethereum, another digital coin. His setup now whirs away in a corner of his apartment in The Acre.

A hedge fund associate by trade with a master's degree in corporate finance, Patil was drawn to the economics of the Bitcoin market and has spent the last two years learning about the various cryptocurrencies that have captivated tech enthusiasts, libertarians, regulators and hobbyists alike. Public interest has surged in recent weels as bitcoin reached a record valuation of $19,662 on Dec.A man uses a Bitcoin ATM in Hong Kong on Dec. 8. Below, mock Bitcoin chips are displayed at a Bitcoin trading store in Hong Kong on Dec. 21. Virtual currencies are not tied to a bank or government and allow users to spend money anonymously. They are basically lines of computer code that are digitally signed each time they are traded.

Public interest has surged

in recent weels as bitcoin reached a record valuation of $19,662 on Dec.17 then dropped to $12,617 just five days later. At the start of the year, one Bitcoin was worth just under $1,000.Depending on who you ask, cryptocurrencies are the future of money, a bubble that's about to burst, or both. "People should learn how it works because It touches on so many subjects — government, inflation, the economy," Patil said, predicting that cryptocurrencies will soon be as ubiquitous as social media platforms like Snapchat and Facebook.

To that end, he founded a Bitcoin discussion group in Lowell, which met for the first time on Dec. 23. Its members come from a variety of backgrounds and are drawn to cryptocurrencies for different reasons. For Patil, it was the economics and the opportunity to make some money on the side. Michael Connell, the owner of a video production company from Quincy, is in it purely to see an increase on investment, although he's far from betting his retirement on the technology.

"Call it a bubble, call it a scam, call it whatever, but in my lifetime I've had the stock market crash on me twice," Connell said. "I lost 30 percent on my mutual funds the first time and 60 percent the second time and I haven't heard anybody complaining about the scam we call mutual funds.A chart shows Bitcoin is closing value from Dec. 1 to Dec. 29. Bitcoin reached a record valuation of $19,662 on Dec. 17 then dropped to $12,617 just five days later.

His original investment of $1,000 has grown into $15,000. George Gaines, of Boxboro, has also seen a substantial return on investment but his interest lies more in Bitcoin's underlying technology. Blockchain is a digital technology that acts as a public ledger of transactions. In the case of Bitcoin, whenever two users make a transaction, or block, computerized "mining" systems distributed throughout the network confirm its accuracy by solving complicated mathematical problems based on the same algorithm. The block is then added to the end of the chain, which is recorded across the network.

Occasionally, and increasingly rarely,

one of those miners will solve a problem that creates a new block out of thin air, and a bitcoin is born. There is a finite number of bitcoins — 21 million — that can be mined. Blockchain has many potential applications, attracting even those investors who dismiss cryptocurrencies. The stock of Long Island Iced Tea Co., for example, rose 289 percent last week after the beverage company changed its name to Long Blockchain and announced it would begin partnering with companies using the technology.

Gaines, a serial entrepreneur who is currently working on ways to use artificial intelligence in health care settings, said he thinks blockchain could solve one of the Internet's biggest problems: verifying the accuracy of information. Investing in cryptocurrencies may help it realize that potential. "That helps the technology," he said."It's kind of amusing because the excitement and the greed fuels more interest, which fuels more technology, which solves some of the underlying problems."Ask a cryptocurrency enthusiast what he or she thinks about Bitcoin or blockchain and the conversation can go in a hundred different directions.

There are investment strategies to discuss, security precautions to share, and philosophies to expound on. The community aspect is important. One of the main criticisms of cryptocurrencies — although it's also an attraction for many users — is that they are decentralized. There is no Securities and Exchange Commission overseeing Bitcoin or a Federal Deposit Insurance Corporation to insure against loss if, for example, someone hacks a company that creates the digital wallets in which bitcoins are stored and steals thousands of customer passwords.

The future of cryptocurrencies is therefore heavily dependent on the technologies and communities that grow around them. Patil and other members of the new Lowell Bitcoin group hope their collaboration will make them safer, individually, and more valuable, collectively. "There's so much happening in this field, you need someone to talk to," Patil said. "When you get in, you have to be educated."

Chuck Reynolds

Marketing Dept

Please click either Link to learn more about Bitcoin.
Interested or have Questions, Call Me, 559-474-4614

Where Are All the Quick Wins for Blockchain?

Where Are All the Quick Wins for Blockchain?

In 2017, much of the focus was on vision setting,

long-term projects and the sizzle of cryptocurrencies. We also got CryptoKitties, a star of 2017 blockchain usage that is cute and fun, but of limited benefit. As someone who joined the community because of the technology and social impact, the vision is compelling, but nowhere near sufficient to sustain this ecosystem until 2022-2024, the time when most predictions of meaningful production applications are settling. The question for 2018, then, is more tangible: How do we get real cost savings? Improve the customer experience?  Increase revenue? Decrease risk? Arrive at stakeholder benefits more quickly?

Bite-sized success

First off, we need to make the entire blockchain ecosystem more actionable, more real, even better – simpler! Maybe because this is a technology-led community, most blockchain discussions get more complicated rather than simpler. With simpler, quick-win, use cases, there is an opportunity to move organizations from research and into action.

You might think, there are already plenty of use case lists, just get going! True, there are plenty of lists, but they lack actionability. They are too high level – it'd be almost the same as telling a salesperson to "just go sell something" without the context, the training, the experience and the technology underpinnings for them to be successful. My company is helping to change the process by thinking this way: "What benefit can we bring using existing blockchain technology in 3-6 months?" Though we certainly don't have these simpler, quick-win use cases nailed down yet, we have identified four patterns where we believe there can be

2018 value:

  • Decrease digital storage costs while learning blockchain
  • Improve trust and usability of recorded data
  • Next generation business process management and integration
  • Speed up and reduce costs of payments.

The goal of this list is to combine the fundamental values of blockchain, existing technology and real organizational needs. The first pattern on the list is a perfect example. Hardly anyone would say that storage is visionary and while it’s cheap, the continual expansion of data, necessitates better solutions. With Sia, Storj, and others, you can reduce your costs over AWS – a practical benefit from a blockchain. Another quick win example is a private equity administration blockchain developed by Northern Trust. In its solution, the company looked at how to leverage the trusted data resulting from using blockchain. Their blockchain leverage turned into reduced costs and duration of transactions along with increased transparency for audit and compliance.

Giving up control

In addition to simplifying the use cases, we need to address the proverbial elephant in the room: everybody wants the benefits of a blockchain but is hesitant to dive in because of competitive and control concerns. These are valid concerns, and we've already seen these issues manifested in the bitcoin community. Since we won't eliminate the concerns directly with blockchain, a better way to speed adoption is to create a set of patterns to follow.

For example, take a look at a simple hierarchy of business network models:

  • Public data + Own Organization + consumer
  • Vertical value chain with dominant origin or end point
  • Complementary Proprietary Data/Contracts/SLAs + Own Org + consumer
  • Complementary Proprietary Data/Contracts/SLAs + Own Org + Proprietary Data/Contracts
  • Competitors via alliances, consortiums and direct relationships

The model at the top is the easiest way to get started since it has the fewest direct participants while the one at the bottom is the most difficult because these are your numerous, direct competitors. Not surprisingly, each of these models has examples. Public data is the key to the first model, whether it’s flight departure times or from a governmental entity. The second has many examples (Tencent, Daimler, Cargill, Bloomberg…) where a dominant organization can drive or forestall change within a business network.

The third and fourth are about disruption – both avoiding it, and creating new combinations to improve a customer’s experience. And finally, there is the straightforward combination of direct competitors working to create some sort of new standards. Like a lot in blockchain these days, these patterns and models are only the beginning. Feel free to use them as a guide to prioritize your thinking, minimize blockchain readiness objections and get to the nuts and bolts of creating a real blockchain project. Meanwhile, we’re working on enhancing these patterns with specific scenarios to make them even more actionable. We can see a better world using blockchain. Let's get there faster by focusing on creating simpler, more practical, use cases. We may even get to the world-changing visions more quickly.

Chuck Reynolds

Marketing Dept

Please click either Link to learn more about Bitcoin.
Interested or have Questions, Call Me, 559-474-4614

Which Privacy Cryptocurrency is the Most Undervalued Right Now?

Which Privacy Cryptocurrency is the Most Undervalued Right Now?

CLOAK is one of the few strongly privacy driven cryptocurrencies out there.

And privacy is the last human right we have forgotten to fight for. CLOAK is also incredible, because it rewards every single coin holder that wishes to participate in maintaining the CLOAK transaction system called ENIGMA – something none of the top cryptocurrencies do for their users.

Before the following description of CLOAK, in advance big news has to be announced. The source of ENIGMA will be open-source on 31st of December 2017. So everybody will be able to review the source code based on over three years hard work. Hard work pays off and hence CLOAK ticks all the boxes, when evaluating the long term sustainability of a cryptocurrency:

  • Tight and active community
  • Strong developer team
  • Purpose of the project
  • How well designed the project is

At the time of writing, CLOAK is performing very well in coinmarketcap. When looking at the momentum it has gained since the start of December – the price has tripled this month. It’s especially impressive how well CLOAK is trading against Bitcoin, something that few altcoins can say after Bitcoin’s dramatic December surge of over 7000$. And there are good reasons for that. Let’s compare CLOAK to other big cryptos on the scene right now.

CLOAK has a low circulating supply compared to others

Let’s imagine that CLOAK is as popular as Bitcoin and attracts the same investment. CLOAK’s hard cap of 5+ million means every single CLOAK would be worth 3 times more than Bitcoin, which has a circulating supply of 16.5 million.

2018 is predicted to be the year of Altcoins. In 2017, Bitcoin has already given a large chunk of its hegemony in the total cryptocurrency market cap away. CLOAK should do well to seize a sizeable portion of this, once it’s noticed.

CLOAK uses PoS instead of PoW

The cryptocurrencies dominating the top of coinmarketcap all use the Proof of Work algorithm. But investment that goes into sustaining PoW coins devalues over time, because PoW coins require expensive hardware and a lot of computational power. As such, control of PoW networks also tends to centralise into the hands of a few. CLOAK uses Proof of Stake, where consensus in CLOAK can be reached based solely on the amount of coins in staked wallets.

CLOAK is environmentally sustainable compared to others

PoS integrates the security and running of the blockchain into the coins instead of separate mining equipment. It therefore saves not just on hardware, but also electricity, making it much more environmentally friendly.

CLOAK rewards all its coin holders

To motivate coin holders to stake their coins into the service of the blockchain, CLOAK uses PoS without Master Nodes. As a result, CLOAK is able to reward all of its coin holders with 6% on their holdings per year. Which investment yields a 6% return annually? None! There are even more gains, if your wallet secures Enigma transactions. The 1.8% charge taken from using Enigma’s extra layer of anonymity is divided among all participating nodes (wallets).

CLOAK offers true decentralization and anonymity to its users

Increased regulation is inevitable as cryptocurrency adoption becomes more widespread. Many are concerned regulation could stifle the libertarian aspects of cryptocurrency. Anonymity for its users has never been a priority for Bitcoin in its quest for ubiquity. But CLOAK is a cryptocurrency designed to facilitate private, secure and untraceable transfers by using Enigma, a secure and decentralized, off-blockchain mixing service. By using PoS without Master Nodes, CLOAK also achieves a wide spread of power across the blockchain, bringing true decentralization to its users.

To conclude, ask yourself this: are the cryptos popular now the Googles of cryptocurrencies? Or are they the Netscapes? If they’re the Netscapes, where is the Google of cryptos sitting right now? CLOAK has been around since 2014, having 3 unrushed years to build up a solid and well-designed project. And in this time, the project has evolved, taking in lessons and keeping up with developments trending in cryptocurrencies. No wonder CLOAK is coming off so well and everybody is awaiting eagerly the open-source of ENIGMA on 31st of December 2017.

Chuck Reynolds

Marketing Dept

Please click either Link to learn more about Bitcoin.
Interested or have Questions, Call Me, 559-474-4614

2017: A Defining Year for Cryptocurrency Regulation


A Defining Year for Cryptocurrency Regulation

In a year of soaring cryptocurrency prices and countless initial coin offerings,

it's perhaps unsurprising that, over the course of 2017, regulators worldwide stepped in to define how they would oversee what had been to date a legally murky environment. From China's crackdown on exchanges to the SEC's report on The DAO, 2017 was perhaps one of the most significant years to date on the regulatory front. Indeed, the year saw regulators from many of the world's leading economies issue investor alerts and cautionary statements about financial use cases for the tech. The past two months especially have seen growing activity on the ICO funding model, as seen by bans in major Asian countries to enforcement actions in North America. In this article, we look at some of the big policy shifts from the past 12 months – many of which may have set the stage for further industry-defining developments in the year ahead.

The People's Bank vs bitcoin

It was the first week of 2017 and China's "Big Three" bitcoin exchanges – OKCoin, Huobi and BTCC – were being warned by the country's central bank. That warning about staying compliant with "relevant laws and regulations" was followed in February by a freeze on withdrawals and the creation of new trading fees – both of which were measures imposed by the People's Bank of China in a stated effort to curb the risk of money laundering. And after months of waiting, exchanges ultimately returned access to funds to users in late May.

Officials in the world's most populous nation ultimately ordered those cryptocurrency exchanges to cease trading and shut down in mid-September, which combined with BTCC's closure effectively ended the "Big Three" ecosystem and pushed trading activities within China to over-the-counter markets. News of the pending shutdowns came just days after the country stopped ICOs within its borders, saying the campaigns operated by "illegally selling and distributing tokens." Where 2018 will head remains to be seen, though commentators on state-owned television in China have said in recent months that OTC cryptocurrency trading may be deemed against the law as well.

The DAO report

Rumors had circulated for months that the SEC would move to define how it would regulate ICOs. Yet the agency played its cards close until late July, when it declared that U.S. securities laws could be applied to some token sales depending on the nature of the token itself and the manner in which it was offered.

The funding model, through which the sale and distribution of cryptographic tokens would be used to kickstart work on a new blockchain network, was at the heart of The DAO, the now-defunct funding vehicle that raised millions of dollars in ethers in 2016 through the sale of DAO tokens. It collapsed later that summer following a debilitating exploit, sparking months of infighting, recovery efforts and, ultimately, a split in the ethereum blockchain. According to a report published by the SEC in July, the DAO tokens were securities under U.S. law, though the agency said that it had declined to pursue any enforcement action related to the sale.

The SEC wrote at the time:

"…the Commission deems it appropriate and in the public interest to issue this Report in order to stress that the U.S. federal securities law may apply to various activities, including distributed ledger technology, depending on the particular facts and circumstances, without regard to the form of the organization or technology used to effectuate a particular offer or sale."

The agency's statements are significant because they sparked a host of similar warnings and publications from other regulators around the world. The SEC itself would go on to warn about celebrity endorsed ICOs and public-stock scams that use the funding model as a way to entice investors. The agency has also pursued civil lawsuits against ICO organizers since July through a newly-created unit focused on digital investigations.

Putin's edicts

CoinDesk readers are likely familiar with the long-running saga of cryptocurrency regulation in Russia.

And while recent statements from senior lawmakers suggest that Russia's State Duma may finally approve rules governing the trade and issuance of cryptocurrencies, statements from earlier this year from president Vladimir Putin are arguably more impactful for the tech's future in the country. In late October, the Kremlin published five orders from Putin focused on various uses for the tech. He ordered new registration requirements for cryptocurrency miners, the application of securities laws to the initial coin offering (ICO) funding model and research into how the tech could be used as part of a digital payments ecosystem in the Eurasian Economic Union.

Echoing moves by other countries in the past year, Putin also ordered the creation of a regulatory "sandbox" for companies that use technologies like blockchain to develop new products and services. While the orders undoubtedly nudged forward the work on legislation around cryptocurrencies, Putin's edicts have arguably advanced efforts to integrate the tech into the Russian state government infrastructure. They also came months after the Russian leader briefly met with ethereum creator Vitalik Buterin. Other leaders in Russia have pushed the idea of using blockchain for public-sector purposes as well. Prime minister Dmitry Medvedev, for example, ordered government officials to begin researching uses of blockchain last spring.

Chuck Reynolds

Marketing Dept

Please click either Link to learn more about Bitcoin.
Interested or have Questions, Call Me, 559-474-4614

Bitcoin Looking Over Its Shoulder as Cryptocurrency Competition Heats Up

Bitcoin Looking Over Its Shoulder as Cryptocurrency Competition Heats Up

What Could Go Wrong for Bitcoin in 2018?

A host of cryptocurrencies are vying with the more-established Bitcoin for the interest of investors looking for risk and the potential make a quick buck.While Bitcoin has a cryptocurrency market share of more than 50%, competition is hotting up as investors are looking at smaller, cheaper cryptocurrencies for which there is more scope to rise in value.Bitcoin, the most established cryptocurrency, was worth $13,300 and had a market capitalization of $224 billion on Sunday, according to Coinmarketcap.The next largest cryptocurrency by market cap is Ripple, which was worth $91.7 billion on Sunday, followed by Ethereum, worth $70.9 billion. However, one Ripple is currently priced between $2 and $3, extremely cheap when compared to competitors such as Litecoin ($220) or Ethereum ($732).

According to, a site for investors, smaller cryptocurrencies could be a worth a punt as the price of Bitcoin remains high."Go a few rungs lower and market cap plummets; by the 200th rung you get Faircoin, at a mere $57 million market cap and $1.09 apiece earlier today. Move on down to #1,065 and you get Nodecoin, with a total market cap of less than $8,000, a price of less than a nickel per coin—and a 19% gain in just the past hour!" ValueWalk advised on Saturday. The cryptocurrency with the fourth largest market cap is Bitcoin Cash, which was created as a result of a so-called "fork" in August when some Bitcoin developers branched off to create a new, allegedly superior payment network — with the same transaction history. 


The fork resulted in Bitcoin owners owning an equivalent amount of Bitcoin cash. However, things are less straightforward for traders or investors with Bitcoin held by third parties such as Coindesk. While Coindesk decided to include Bitcoin Cash in its list of assets which can be traded on the platform, others are less accommodating of the newcomer. On Thursday, BitMEX, a Seychelles Islands-based cryptocurrency trading platform, announced it had sold all of the Bitcoin Cash cryptocurrency held by its users, and credited them with an equivalent value of Bitcoin instead.

Chuck Reynolds

Marketing Dept

Please click either Link to learn more about Bitcoin.
Interested or have Questions, Call Me, 559-474-4614