Former US Defense Official Urges Govt to Incentivize Blockchain Investments

 

    

Former Department of Defense official Eric Rosenbach

urged the United States Foreign Relations Committee to incentivize blockchain investments as part of a wider strategy to combat cyberspace threats. Rosenbach, who served as Assistant Secretary of Defense for Homeland Defense and Global Security during the Obama administration, made this remark during a speech titled “Living in a Glass House: The United States Must Better Defend Against Cyber and Information Attacks.”

Rosenbach’s thesis is that cyber warfare is asymmetric in that “a small nation with an offensive cyber capability can have an outsized effect on a large power” such as the United States. He believes that the high rate of internet access within the United States, along with the open nature of American democracy, renders the nation vulnerable to a cyber attack from a hostile actor such as North Korea. He believes such an attack “is likely to happen within the next year if current trends continue.” He argues the United States must guard itself against cyber attacks by pursuing an aggressive,

tech-based approach.

In sum, the strength of the tech sector and the internet has driven American economic growth and strengthened our democracy for the past two decades. The corollary of this success, though, is that the US is increasingly vulnerable to cyber and information attacks. In order to maintain the “center of gravity” for the United States, we must bolster America’s cybersecurity posture and rethink our strategy for countering foreign information operations.

Specifically, he advised the US government to “incentivize investment in cloud-based security, blockchain-enabled transactions, and quantum computing.” Such technological investments should help secure American against cyber threats.

How Will Governments and Blockchains Coexist?

Many cryptocurrency advocates will bristle at some of Rosenbach’s other security suggestions, including withholding information about cybersecurity vulnerabilities from the public domain. However, as governments begin to realize the possibilities presented by blockchain technology, it is inevitable that they will try to find ways to use it for their own purposes. To this end, the Department of Homeland Security recently awarded grants to blockchain researchers, and just this week the State Department established the Blockchain@State working group.

The first blockchain was designed as a tool for revolutionary decentralization. Governments, by necessity, will look to co-opt the technology and integrate it into centralized frameworks. Only time will tell what role the government will play in blockchain technology’s future, as well as how blockchain technology will affect the nation-state.

Chuck Reynolds

Marketing Dept

Contributor

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Former US Defense Official Urges Govt to Incentivize Blockchain Investments

Bitcoin-Ethereum Flippening Fervor “Makes No Sense,” Claims Vinny Lingham

Bitcoin-Ethereum Flippening Fervor “Makes No Sense,” Claims Vinny Lingham

    

Both bitcoin and ether prices fell today,

putting off what many traders consider inevitable—the “Flippening.” The Flippening, of course, refers to the potential future date when Bitcoin could lose its status as the largest cryptocurrency by market cap. Many coins have tried to usurp Bitcoin through technical innovations, corporate partnerships, and marketing strategies, but Bitcoin has continued to reign supreme.

Only recently has the Flippening become a real possibility. As the ether price has surged to a high of more than $400, Ethereum has become the first cryptocurrency to get within striking distance of Bitcoin’s market cap. Many crypto-pundits have begun to ponder what will happen if the Flippening does occur. Will it be the beginning of the end for Bitcoin? Will the Ethereum platform finally take the blockchain mainstream?

The Flippening “Makes No Sense”

Others, such as Gyft co-founder and Civic CEO Vinny Lingham, believe those questions are meaningless and irrational.

As he stated on Twitter:

Bitcoin is better money, deflationary & scarce. Ether is not really money, inflationary & abundant. The flippening makes no sense[.]

What Lingham’s tweet alludes to is that, strictly speaking, Bitcoin and Ethereum are not competitors. Bitcoin is designed to function as a currency (which is why Bitcoin nodes validate addresses), while ether is meant to serve as fuel for Ethereum’s decentralized smart contracts platform; this is why the developers of Ethereum refer to ether as a “token” and advise it is not intended to be used as a currency. However, that warning has not stopped people from treating ether like a currency.

Lingham notes bitcoin derives its value from its scarce and deflationary nature. Ether, in contrast, is inflationary. Ether issuance is capped at 18 million per year (the move to Casper should decrease that number further), so the rate of inflation will decrease every year, but the token will remain inflationary to some degree. Ether’s inflationary nature has proved unpopular with some Bitcoin proponents, many of whom were first attracted to cryptocurrency because of Bitcoin’s “digital gold” nickname. Flippening numbers on Thursday.Additionally, as Lingham points out, there are already far more ether in circulation than bitcoins (~92.5 million ETH to ~16.4 million BTC).

What is Money?

Lingham’s tweet triggered a litany of replies (more than 130 at the time of writing). Lightning co-founder Elizabeth Stark ascribed the Flippening to short-term ether speculation. She stated that “Users and real use cases are what will matter,” not short-term market cap rankings.

Before long, the thread had devolved into arguments about the fundamental nature of money. BitPoint CEO Aaron Foster, for instance, argued that Ethereum will surpass Bitcoin’s market cap and that to deny that ether is money is “stupid,” even though Ethereum nodes do not validate addresses. “What is money?,” he asked. Olivier Janssens rejected the assertion that Ethereum cannot serve as a store of value.  Others compared ether to the U.S dollar (both favorably and unfavorably) and pushed back against Lingham’s assertion that deflation is a positive attribute for a currency to have. In any case, the Flippening frenzy should serve has a reminder that no matter how technologically-advanced humanity becomes, it will likely never reach consensus on one of the society’s most fundamental questions: “What is money?”

Chuck Reynolds

Marketing Dept

Contributor

Please click either Link to Learn more about -Bitcoin.

Bitcoin-Ethereum Flippening Fervor “Makes No Sense,” Claims Vinny Lingham

Coinsilium Invests in Blockchain-Based Professional Network Indorse

   

Singaporean blockchain startups are continuing to attract more investors

to this emerging sector. On June 9, early-stage startup accelerator Coinsilium announced a SGD$100,000 ($72,500) investment in Singaporean blockchain-based Linkedin-like professional network Indorse.

According to the official press release, the deal was secured with the issuance of a convertible loan which granted Coinsilium an undisclosed number of the native tokens of the Indorse blockchain network. Essentially, the deal was settled in a way similar to how Initial Coin Offerings (ICOs) are conducted within the cryptocurrency market except in a private manner. In a publicly disclosed ICO, a certain number of native tokens of a blockchain network are up for sale within a limited timeframe. For instance, most recently, the Bancor Network deployed on top of the Ethereum network raised $150 million within a three-hour timeframe by issuing its unique native tokens to investors.

Instead of conducting a public ICO like most Ethereum-based blockchain projects and companies have done in the past few months, Indorse opted to carry out a private ICO-like deal with an early-stage accelerator to facilitate its growth and scale proportionally in the Singaporean market. Eddy Travia, the CEO of Coinsilium, revealed that Indorse will serve professionals as a monetizable platform. Users on the Indorse blockchain-based professional network will be able to earn reward tokens by sharing their skills and activities.

More to that, 21 Inc, which raised $116 million from an all-star team of early-stage investors, switched its main service or product from 21 Inc computer-based applications to a bitcoin-accepting inbox that allows users to receive an email response from other users in the network by paying a reward at a price set by the email respondent. The company released this service due to the lack of incentive provided by existing platforms such as Linkedin when responding to messages and invitations. Indorse can also include 21 Inc’s bitcoin-based inbox product by utilizing its native tokens and its blockchain network. If its blockchain focuses on flexibility rather than security like the Ethereum network, it will be able to introduce a wide range of applications and features for professionals.

“Indorse will also allow users to profit from sharing their skills and activities on the platform via reward tokens. This is a new and game-changing model in a multi-billion-dollar social media industry, and we are confident that Indorse has the requisite skills and talent to propel Indorse to become one of the world’s most popular decentralized social platforms,” said Travia. David Moskowitz, Co-Founder, and CEO of Indorse explained that the long-term vision of Indorse is to position itself at the forefront of tokenization and decentralization. It aims to target the Singaporean market in the beginning and gradually expand

globally:

“Indorse has the aim to revolutionize professional social networking using new models of tokenization and decentralization and we believe that Coinsilium’s expertise and deep knowledge in this space will be a strategic advantage to reach our goals."

On March 6, CB Insights released a report entitled “Global Ledger: Mapping Bitcoin & Blockchain Startups Around The World” which revealed that Singaporean blockchain market stands behind US and UK as the third largest blockchain industry in the world. If Singaporean blockchain and bitcoin startups such as Indorse continue to raise the interest of early-stage investors in both Asia and internationally, Singapore will continue to lead the Asian market as the continent’s blockchain hub.

Coinsilium Invests in Blockchain-Based Professional Network Indorse

Litecoin’s Charlie Lee Quits Coinbase, Receives $12,000 Donation

    

A $12,000 donation has accompanied Litecoin creator Charlie Lee leaving Coinbase

to work on his creation full-time. After Lee announced he was stepping down from Coinbase duties to dedicate himself to Litecoin development, his Litecoin Foundation received a donation of 438 LTC – around $12,000 at Tuesday’s rates. The donor, known by his handle JoeyBTC, made himself known following a Twitter request. Litecoin proceeded to come down from circling $35 per coin as Bitcoin itself slumped, with Lee’s optimistic announcement having little effect on investor opinion.

The move is the first major event for the Litecoin community since SegWit activation caused a giant price rise in May. While a long time ago in terms of 2017’s cryptocurrency price action, Litecoin just six weeks ago was the star of altcoin markets, regularly outperforming other top 10 assets and bucking downward trends. Responses to Lee on Twitter were therefore keen to forecast a new surge upwards in a market currently dominated by Ethereum (ETH). Last week, Trezor became the first Litecoin hardware wallet to support SegWit.

Chuck Reynolds

Marketing Dept Contributor

Please click either Link to Learn more about -Bitcoin.

Litecoin's Charlie Lee Quits Coinbase, Receives $12,000 Donation

World’s First Blockchain Insurance Marketplace To Launch Ambitious ICO

  

The world’s first Blockchain-based insurance marketplace,

InsureX, is set to launch an ICO in July 2017 in a bid to raise at least 2200 ETH. The first in a large number of token sales set to launch in the next few weeks, London-headquartered InsureX intends to use the funds to create a trading platform specifically for insurance products.

“Blockchain technology presents an exciting opportunity to disrupt the insurance industry,” CEO Ingemar Svensson said in a press release Thursday. Citing Allianz insurance data, he continued: “Preliminary estimates are that gross written premiums generated by insurers contribute 3.5 trillion or 5.7 percent of the global GDP – that is a massive opportunity.”

In addition to finding products themselves, InsureX will offer a secure exchange of confidential documents and other data on the platform, which operates in the Software-as-a-Service (SaaS) format. The insurance industry is already slated for change, thanks to Blockchain solutions with products such as IBM Blockchain built on a hyperledger seeking to streamline common processes.

“Currently, insurance is traded and processed in traditional ways, often manually and with layers of intermediaries,” Svensson continues. “As part of the typical insurance deal, a large amount of documents and data have to be exchanged, which in a manual system introduces cost, delays and errors to the process.” The ICO will go live on July 11, with IXT tokens initially sold at an ambitious rate of 1.125 IXT per ETH, increasing to 1.757 per ETH as the sale continues through until July 31.

Chuck Reynolds

Marketing Dept Contributor

Please click either Link to Learn more about -Bitcoin.

World's First Blockchain Insurance Marketplace To Launch Ambitious ICO

An Introduction to Cryptoeconomics

   

The Concept of Cryptoeconomics

In this guide, you will be introduced to the concept of cryptoeconomics and how it has given birth to an entirely new digital multi-billion dollar industry.

What is Cryptoeconomics?

Cryptoeconomics is a concept as well as a new term and, hence, has no official definition yet. According to Ethereum developer Vlad Zamfir, cryptoeconomics is “a formal discipline that studies protocols that govern the production, distribution and consumption of goods and services in a decentralized digital economy. Cryptoeconomics is a practical science that focuses on the design and characterization of these protocols.” The Ethereum Wiki defines cryptoeconomics as “the combinations of cryptography, computer networks and game theory which provide secure systems exhibiting some set of economic dis/incentives.”

While the founder of TheControl, Nick Tomaino, explains cryptoeconomics as “the study of economic interaction in adversarial environments. In decentralized P2P systems that do not give control to any third party, one must assume that there will be bad actors looking to disrupt the system. Cryptoeconomic approaches combine cryptography and economics to create robust decentralized P2P networks that thrive over time despite adversaries attempting to disrupt the network.” In simple terms, cryptoeconomics is a new field of study that analyses economic interactions in the decentralized digital economy that was pioneered by bitcoin. It is the foundation on which cryptocurrencies and digital assets are built on.

How Cryptoeconomics Changed Peer-to-Peer Networks

The Bitcoin network was not the first decentralized peer-to-peer network. Before Bitcoin, we had peer-to-peer file sharing platforms such as Morpheus, and Kazaa, where users from across the world would share files with other members of the decentralized peer-to-peer network. However, what these file sharing platforms were missing was an economic incentive. Without economic incentives, there was little reason for users to keep seeding files that take space on their computers so that other users can download them. Aside from the legal aspect of sharing copyrighted material, a lack of economic incentive is what contributed to the demise of the above-mentioned platforms.  

Satoshi Nakamoto, the anonymous creator of Bitcoin, however, managed to create an economic incentive to uphold Bitcoin’s peer-to-peer network. He introduced Bitcoin mining rewards for those who used their computing power to secure the blockchain and to process bitcoin transactions. This was the birth of cryptoeconomics. Before bitcoin was created, it was believed that it was impossible to achieve consensus among nodes to develop a decentralized digital currency system due to the Byzantine General’s Problem. However, due to the implementation of the proof-of-work consensus mechanism that allows Bitcoin network participants to receive new bitcoins for enabling the network to function, this previously “unsolvable” challenge was resolved. Today, the Bitcoin network has become an internationally thriving peer-to-peer payment system that has a market value of over $45 billion dollars and a single bitcoin is worth more than a troy ounce of gold.

The Evolution of Cryptoeconomics

Bitcoin was the first technology to implement a rewards system to a cryptographically secured peer-to-peer network. Due to the network’s open-source nature, many other cryptocurrencies followed that were built on top of the technology that Satoshi Nakamoto has created. Many new “altcoins” were merely bitcoin clones while some had new features that improved on their pioneering predecessor. Litecoin, for example, provides faster transaction times than bitcoin while DASH and Monero provide complete transaction anonymity. These cryptocurrencies, however, all use a proof-of-work mechanism similar to that of their predecessor, bitcoin. A new blockchain that has introduced new concepts into the world of cryptoeconomics is the Ethereum Project. Ethereum was developed by Vitalk Buterin and officially released on July 30, 2015. Ethereum differs bitcoin in three key ways, which are also helping to reshape the dynamics of cryptoeconomics.

Proof-of-Stake vs. Proof-of-Work

The bitcoin network uses a proof-of-work consensus mechanism, which means that participants who want to earn rewards through bitcoin mining need to use their computational power to maintain the network by validating and processing transactions. For this work, they receive financial rewards in the form of new bitcoins. However, the proof-of-work mechanism is very inefficient. Not only is it expensive to maintain bitcoin mining hardware, it also requires a substantial amount of energy to keep the bitcoin network running. According to Vice Motherboard, the bitcoin network is projected to consume as much energy as the entire country of Denmark by 2020.

Ethereum, however, is addressing this cryptoeconomic inefficiency by moving towards a proof-of-stake consensus. A proof-of-stake consensus mechanism enables users that hold the cryptocurrency ether, to receive rewards for validating transactions without the need for electricity-intensive mining hardware to be used. Ethereum still runs on proof-of-work but it is expected to switch to a proof-of-stake consensus mechanism within the next two years.

Monetary Policy

Bitcoin has a hard coded monetary policy built into its network, which allows for 21 million bitcoins to be created in total and, thereby, limits the supply of bitcoins. Furthermore, the rate at which bitcoin are created halves every four years. Bitcoin miners (those who enable the network by validating and processing transactions) are rewarded with the newly created coins. Ethereum’s monetary policy does not involve a finite number of ether that can ever be created, which could be seen as a negative. However, as Ethereum moves towards proof-of-stake, the holders of ether will be the ones to receive new ether for validating transactions. This is considered a more inclusive way of distributing coins than Bitcoin’s proof-of-work approach, which favour large well-funded centralized mining operations.

Different Script Language

Ethereum also uses a different scripting language than bitcoin, which allows for decentralized applications and smart contracts to be developed on top of its blockchain. This makes Ethereum and much wider applicable blockchain than Bitcoin's and adds entirely new layers to the field of cryptoeconomics.

The Future of Cryptoeconomics

It is hard to predict the future of such a new field of social science. However, the developments in cryptoeconomics in the past decade or so are suggesting that cryptoeconomics has the potential to play a major role in society. Through the use of trustless peer-to-peer payment networks and self-executing smart contracts, intermediaries can be alleviated while payment speed and security can be increased. As technology becomes an increasingly important part of our day-to-day lives it would only make sense for economics to become part of that too.

Chuck Reynolds

Marketing Dept Contributor

Please click either Link to Learn more about -Bitcoin.

An Introduction to Cryptoeconomics

Bitcoin Break $3,000 Do Not Miss This

The price of bitcoin topped $3,000 for the first time in history today, according to the CoinDesk Bitcoin Price Index (BPI).

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After spending much of the last week seeking direction in the $2,700 to $2,900-range, the average price of bitcoin across major international exchanges edged up over this threshold finally at roughly 17:00 UTC.

The new record comes at a time when alternative digital assets are seeing robust inflows, with ethereum's ether token setting a new all-time high of more than $300 today as well.

Indeed, analysts spoke to the ongoing broadening of the cryptocurrency market as a tide that is benefitting bitcoin.

"The inflows into 'alts' are greater than those into bitcoin. In other words, bitcoin is growing at a very nice pace, but non-bitcoin cryptocurrencies are growing even faster," cryptocurrency hedge fund manager Tim Enneking told CoinDesk.

Jehan Chu, managing partner at cryptocurrency fund Jen Advisors, agreed, noting that bitcoin is likely benefitting from new investor interest and the surging interest of "cryptos like ether".

Still, Arthur Hayes, founder of Hong Kong-based digital currency exchange BitMEX, stated that bitcoin is still the "most talked-about cryptocurrency", even as returns become more substantial in other areas of the market.

Hayes told CoinDesk:

"As investors marvel at bitcoin's historical returns and the returns of altcoins, their natural first purchase is bitcoin. Bitcoin has under performed other coins this year, it is now playing catchup."

Investor Sean Walsh largely agreed, pointing to bitcoin's growing price as a sign of its place in the market as the first stop on a road to other assets.

"Bitcoin still seems like the dominant gateway to [alternative digital assets]. So, many first purchase bitcoin in order to then trade their bitcoin for altcoins," he noted.

The development coincides with signs that the cryptocurrency market is maturing to support new inflows and increasing interest.

As noted by CoinDesk research analyst Alex Sunnarborg today, the cryptocurrency exchange market has never been more globally diverse or buoyed by such an array of possible inflows.

Such tailwinds have combined in recent weeks to bring new investor attention to bitcoin, with expectations for bitcoin's growth becoming more and more exuberant. Danish investment firm Saxo Bank went so far as to publish a forecasting report in which it placed the possible value of bitcoin at $100,000 in the next 10 years.

Chris Corey 

CMO Markethive Inc

Charts on mobile device via Shutterstock

Bitcoin Break $3,000 Do Not Miss This