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How blockchain technology can help refugees


“Refugees Welcome” – Demonstration in Copenhagen, 2015

The blockchain race is on, and the fintech sector is leading the charge. But other industries are looking to utilize the technology as well. Some have even realized that it can change the way we govern ourselves, or even provide assistance to refugees in need.

Blockchain in the public sector

Governments all over the world deal with an unfathomable amount of data. From the time you are born until you die, there are countless files on each and every person. From birth and death certificates, property transfers, medical records, taxes, benefits, achievements in academia, criminal records, marital statuses, and so on. Many kept on paper. Now, there is a technological revolution in progress to leave that all behind, and to streamline the way information is stored and accessed.

The most notable examples of the use of this budding technology come from “new” countries. As explained by Kaspar Korjus, head of Estonia’s e-residency programme, “It can be much easier to build a digital society if there are no legacy systems and you can start from scratch.”

After years of war and drastic shifts in power, Estonia declared formal independence from the Soviet Union on August 20, 1991. Since then, the country’s focus on technology has turned it into the “Silicon Valley of Europe” of today.

Estonia may be one of the most notable examples of blockchain-within-government. Using blockchain-like technology, the government launched its digital national identity card. This card allows citizens to do everything from voting online to accessing digital banking and healthcare services.

Another major influencer in the blockchain realm is the United Arab Emirates – another relatively young country which has fully embraced technology, making Dubai one of the world’s most technologically forward-thinking cities.

With its towering skyscrapers, advanced transportation infrastructure, and flourishing business environment, the dive into blockchain governance should come as no surprise. In the city’s “blockchain strategy,” Dubai aims to conduct every aspect of the emirate’s business using blockchain. Aisha Bin Bishr, director general of Smart Dubai noted: “We want to make Dubai the first blockchain-powered government in the world by 2020.”

While blockchain takes on the idea of governance as we know it, the new technology is also changing the way with help each other.

Identity crisis

Due to the unrest in the Middle East and Africa, refugees are leaving their homes behind and heading to Europe seeking peace, asylum, and a better life.

Upon leaving their home, many individuals lose all identifying factors that most people take for granted, including their IDs and bank accounts.

Working with the United Nations High Commissioner for Refugees (UNHCR), a joint venture between Microsoft and Accenture seeks to solve some of these issues by creating a new system using blockchain technology in order to give those without an identity a new start. The ID, called United Nations ID2020, is still in a prototype, but aims to facilitate services such as banking and education to those who would otherwise be unable to access such services.

“Digital ID is a basic human right,” David Treat, a managing director at Accenture.

But that is not the only blockchain project the UN has been working on. In late May, the United Nation’s World Food Programme completed a trail-run of a project which utilized the Ethereum blockchain in order to provide food to over 10,000 Syrian refugees. The organization distributed cryptocurrency-based vouchers, redeemable in certain markets. Alexandra Alden, a WFP consultant explained: “All funds received by the refuges from WFP were specifically used to purchase food items such as olive oil, pasta and lentils.”

The organization plans to expand the project in the coming months to over 100,000 individuals in Jordan.

Finland is also working to create a system to help asylum seekers in need.

The Finnish government and a Helsinki-based startup called MONI have created a platform to provide refugees in Finland with a blockchain-based debit card which will allow users access to financial services which were previous unavailable to them. Cash-in-hand used to be the only way for individuals without identity to receive payments, opening them up to exploitation or even robbery.

With this new card, users will be able to receive payments and access their funds in a safe and secure manner. Additionally, card holders will be able to make purchases in-store, pay bills, and access an online application which will help users manage their finances. Because of this revelation, individuals participating in this program are even safer from identity theft than most United States citizens. The technology also allows the government and immigration services to monitor transactions, ensuring that taxes are paid and that there are no nefarious acts being committed.

Blockchain powers more than just money

While blockchain technology has been making waves in the financial sector, its impact on charitable causes cannot be overlooked. Providing food, identification, and banking solutions to those who are without access is a giant leap forward in tackling a growing crisis. Facilitating these needs is necessary in moving forward as a whole.

Things are changing at a rapid pace, and as more governments and international organizations adopt this new technology, it seems like the sky’s the limit.

Featured image from Pixabay

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Calvin Ayre Foundation Asks Crypto Community For Hurricane Aid in Barbuda – Will Match Donations


Calvin Ayre


Longtime Antiqua and Barbuda resident, Calvin Ayre, wants people to send immediate relief aid to the islands. Hurricane Irma recently plowed over the island system and caused tons of damage. Ayre has been involved in the bitcoin and gaming ecosystem for many years. He implores everyone in the community to bring much-needed disaster funding to the area, and his foundation will match each donation. 

Also read: The Risks of Segregated Witness: Problems under Evidence Laws

Calvin Ayre Foundation Asks for Immediete Hurricane Aid in Barbuda
Calvin Ayre

Ayre’s press release emphasized the damage: “Barbuda was directly in Irma’s path, and its Category 5 mix of 300km/hour winds and heavy rain left a trail of devastation in its wake. Gaston Browne, Prime Minister of Antigua and Barbuda, said 90% of the island’s structures have been destroyed and at least one person has been killed, although that latter figure may rise.”

The Calvin Ayre Foundation is also fully involved in the relief effort. However, they said the area could use supplies as well as monetary donations, including tents and emergency supplies. They are working directly with local officials and institutions.

Ayre Will Match All Donations

Furthermore, the Ayre Foundation said they will equally match all donations up to $1 million dollars. These matched donations include any amount of money that comes from the gaming and bitcoin communities. The press release clarified that these donations will be separate from the one he made to aid his adopted home. The site elaborated on how to donate:

Cash donations can be sent to the Barbuda Relief & Rebuilding Fund via the official government account on: https://www.gofundme.com/officialbarbuda. Wherever you choose to donate, send Bill@calvinayre.com a copy of your receipt and the Calvin Ayre Foundation will add an equal amount to the money they’ve already committed. If you donate $100, it will in effect be equivalent to $200 directly helping the Island of Barbuda.

Other Hurricane Disaster relief: Dogecoin Not Bombs

Luckily, there are also other people sending bitcoin-related aid to areas affected by the hurricane. Besides Barbuda, Florida was also ravaged by the hurricane. Prior to it hitting landfall, Todd Dennison, the chairman of the Sarasota country Libertarian Party, was already preparing for it to strike. He has handed out water, toiletries, and food, and various supplies.

Dennison also set up a fundraiser and Facebook aid page going by the name Dogecoin Not Bombs. He has supplied both a bitcoin and a bitcoin cash address for donations on the page.

“We have set up a multi-sig wallet with Todd and this blog post will serve as a log for photos of his efforts and a call for more donations, if you can help your neighbor in this time of need please help Todd with the resources needed to make a positive impact.”

Calvin Ayre Foundation Asks for Immediete Hurricane Aid in Barbuda

What do you think about the situation with Barbuda and Antiqua and do you think crypto users can help out?  Share your thoughts in the comments section below!

Images courtesy of Shutterstock, Dogecoin Not Bombs, and Calvin Ayre

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Regulation Round-Up: Blockchain Tech Lauded in China, ICOs Shunned in the UK, Bitcoin Revered in Finland


Regulation Round-Up: Blockchain Tech Lauded in China, ICOs Shunned in the UK, Bitcoin Revered in Finland


Financial regulators have made official statements regarding a number of issues pertinent to cryptocurrency regulations in recent days. A representative of the People’s Bank of China (PBOC) has encouraged blockchain innovation despite the recent initial coin offering (ICO) crackdown, the United Kingdom’s Financial Conduct Authority has stated its desire to target initial coin offerings providing services that normally fall under regulation, and Finland’s central bank has released a report highlighting positive attributes of the bitcoin economy.

Also Read: ICO Regulatory Round-Up: UK, Malaysia, and Switzerland’s Crypto Valley Point to Risks

A PBOC Representative Has Encouraged Innovation in the Distributed Ledger Technology Industry Despite China’s ICO Crackdown

Regulation Round-Up: Blockchain Tech Lauded in China, ICOs Shunned in the UK, Bitcoin Revered in Finland

The director of the People’s Bank of China Institute of Finance, Sun Guofeng, encouraged China’s fintech industry to continue to explore blockchain technology. Sun emphasized the potential of blockchain technology to be a catalyst for innovation, and sought to distinguish initial coin offerings as a phenomena that is separate from blockchain technology broadly. “We need to separate blockchain technology from ICO. Blockchain could be utilized in many scenarios, including social management cases. Blockchain is not equal to ICO. We need to expand our visions on research and blockchain development.”

The United Kingdom’s Financial Conduct Authority (FCA) has issued an official statement seeking to further clarify its position with regards to ICOs. The FCA has again emphasized the investor risks associated with ICOs, and warned that the authority seeks to curb ICOs providing services under the regulatory jurisdiction of existing authorities. “Many ICOs will fall outside the regulated space. However, depending on how they are structured, some ICOs may involve regulated investments and firms involved in an ICO may be conducting regulated activities. Some ICOs feature parallels with Initial Public Offerings (IPOs), private placement of securities, crowdfunding or even collective investment schemes. Some tokens may also constitute transferable securities and therefore may fall within the prospectus regime. Businesses involved in an ICO should carefully consider if their activities could mean they are arranging, dealing or advising on regulated financial investments. Each promoter needs to consider whether their activities amount to regulated activities under the relevant law. In addition, digital currency exchanges that facilitate the exchange of certain tokens should consider if they need to be authorised by the FCA to be able to deliver their services.”

The Finnish Central Bank Has Praised Bitcoin’s Decentralized Governance Model

Cryptocurrency Regulations Round-Up: Blockchain Technology in China, ICOs in the UK, and the Finnish Central Bank's Reverence for the Bitcoin Economy

A new research paper released by Bank of Finland has lauded the self-governing capacity of the bitcoin ecosystem. The paper states that “bitcoin cannot be regulated. There is no need to regulate it because as a system it is committed to the protocol as is and the transaction fees it charges the users are determined by the users independently of the miners’ efforts.” The paper analyzes the fundamental underpinnings to bitcoin, and explore an array of potential use-cases for the technology. The researchers conclude that “bitcoin’s design as an economic system is revolutionary… Its apparent functionality and usefulness should further encourage economists to study this marvelous structure.”

The current regulatory climate regarding cryptocurrencies has significantly evolved in recent weeks. There appears to be a growing consensus among developing nations that ICOs distributing unlicensed securities should be subject to existing financial regulations and fall under the legal jurisdiction of existing financial authorities. The regulatory focus on the distribution of unlicensed financial instruments through ICOs has in instances latently implied the legitimacy of bitcoin, and in some cases initial coin offerings issuing so-called ‘utility tokens’ – signifying growing nuance in the regulatory sentiment among many western governments. Despite such, China’s recently initiated ICO crackdown may provide an example for other governments seeking to prohibit all initial coin offerings to draw upon.

Do you agree with the Bank of Finland’s assessments of the bitcoin economy and ecosystem? Share your thoughts in the comments section below!

Images courtesy of Shutterstock

Bitcoin.com’s own store features a wide range of interesting Bitcoin-related products. Looking for a hardware wallet? We got ‘em. Want a good-looking t-shirt? It’s there. Want to gift a nice Bitcoin tea cup? Goshopping.

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PR: TokenStars Launches ACE Token Sale, Early Bird Buyers Get Up To 50% Purchase + 40% Conversion Bonus


PR: TokenStars Launches ACE Token Sale, Early Bird Buyers Get Up To 50% Purchase + 40% Conversion Bonus

This is a paid press release, which contains forward looking statements, and should be treated as advertising or promotional material. Bitcoin.com does not endorse nor support this product/service. Bitcoin.com is not responsible for or liable for any content, accuracy or quality within the press release.

The first blockchain talent management agency aims to raise up to $7.5M to support aspiring celebrities

TokenStars, the first blockchain talent management agency, launches ACE token sale to support aspiring tennis players and participate in their success. Early bird crowdsale buyers can get up to 50% purchase bonus and 40% extra bonus for the first conversion of ACE tokens into other vertical: football (soccer), poker ad cybersport will be launched by the end of 2017.

ACE token sale runs from 12.00 pm PDT on September 10th, 2017, to 12.00 pm PDT October 31st, 2017. A number of early bird bonuses are available for the first ten days of crowdsale, including:

40% – for token purchases made by September 13th;
30% – for token purchases made by September 16th
20% – for token purchases made by September 20th;
Additional 5% bonus to be added to the purchases of 5 BTC and higher;
Additional 5% referral bonus for using a promo code;
40% extra bonus for the first conversion of ACE into other verticals’ tokens.

«We are thrilled by the attention that TokenStars received during the ACE pre-sale. It is always a challenge to disrupt an established industry. The market trusts in our first tennis players, star advisory board, and top-notch management team. With the revenue of $82,000 expected in September-October, we are excited to show that our approach can truly change the talent management industry and share the value amongst supporters. And to express our appreciation to the pre-sale supporters, we are bringing their minimum pre-sale purchase bonus to 45%,” says Pavel Stukolov, CEO at TokenStars.

One ACE token costs 0.0001 BTC (1 BTC = 10,000 tokens). During the sale, the minimum purchase amount is lowered to a 100 tokens per transaction. Investors can pay for tokens with Bitcoin (BTC) and Ethereum (ETH). Altogether, TokenStars plans to raise up to $7.5M equivalent in ACE token sale.

By supporting athletes and other celebrities, TokenStars will receive agency commission. Token holders will get access to exclusive fan benefits (trainings, tickets, meet&greet events, merchandise), endorsement opportunities, and a chance to get more remuneration for helping to scout and promote new talents. 4 weeks after the sale finishes, ACE tokens will appear on the popular crypto exchanges.

«Young tennis players lack financial resources, and established players are often neglected by traditional TMAs when it comes to brand contracts. TokenStars has a potential not only to support aspiring celebrities, but also to bring together a community where the success benefits everyone. The recent deal with Tribuna Digital and Sports.ru will help TokenStars to attract millions of non-blockchain fans to the project. I personally can’t wait to see a number of rising stars on the major tennis tournaments,’’ says Anastasia Myskina, Roland Garros champion and TokenStars advisor.

To join TokenStars crowdsale, investors can purchase tokens in the user account on a company’s website: https://tokenstars.com/en/ace/.

To learn more visit our web site or send us a request on ask@tokenstars.com.

This is a paid press release. Readers should do their own due diligence before taking any actions related to the promoted company or any of its affiliates or services. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in the press release.

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Deadcoins Launches Compendium of Deceased Cryptocurrencies



Deadcoins hosts “a curated list of cryptocurrencies forgotten by this world”. Most of the coins detailed are artifacts from altcoin bubbles past, with many comprising exit scams or litecoin clones sporting a silly name for marketing purposes.

Also Read: 40+ ICO Platforms Closing in China

The Majority of the Coins Listed on Deadcoins Comprised of Exit Scams or Poorly Planned Ventures

Deadcoins Launches Compendium of Deceased Cryptocurrencies

Deadcoins lists projects alphabetically, with ‘Aiden’ being one of the first coins encountered by visitors. Of Aiden, the author states “haha this brings back memories. Aiden is another LTC clone shitcoin I made which the idiots and Poloniex listed. I just changed some scrypt parameters and scammed people by calling it GPU friendly. I made so much BTC from this shitcoin it’s not even funny.” The flippant tone of the author’s comments should underline the imperative need for prospective investors to critically evaluate the claims made by the developers of new altcoins.

Deadcoins illustrates the prevalence of exit scams among obscure cryptocurrencies. Many of the exit scams described tell the familiar story of developers disappearing with investors’ funds, such as ‘Blockshares’, which “raised $250k [and] then disappeared”, ‘Crimsoncoin’, whose developors “sold their coins and ran off in less than a week”, and ‘Erosvision’, which is said to have “comprised a “scam coin ICO with [a] plagiarized white paper [that] collected around ten million US dollars before… disappearing”.

Some scams, however, elicit a far more elaborate story, such as Chancoin. Of Chancoin, Deadcoins alleges that the developer conducted a “30% premine, supposedly mistakenly [sent] 10% of the coins to a stranger on the first day, [made] big promises to the community which went unfulfilled… [told] an elaborate lie about [multiple] developers which were all alternate accounts of the same person”, and “fork[ed] the coin which accidentally caused all funds held by people on exchanges to disappear.” Deadcoins states that “[Chancoin] now has a daily volume of less than $1000 [which is] faked by the developer trading with himself.”

Many Failed Altcoins Possess Gimmicky Names

Deadcoins Launches Compendium of Deceased Cryptocurrencies

Many of the cryptocurrencies detailed on Deadcoins comprise projects with little worth that sought to ride the gimmick of a silly name. One such project is ‘Beercoin’, which sought to use a premine in order to “hold the price relative to the price of beer”. Other notably named coins include ‘Fraudcoin’, ‘Groincoin’, ‘Koindashian’, ‘Obama_bin_lotterycoin’, and ‘Asspennies’.

Although though most of the cryptocurrencies described on Deadcoins comprise lazy attempts at establishing a gimmick, or maliciously motivated scams, some projects appear to have been serious in their efforts, and failed due to comically poor execution. ‘Siliconvalleycoin’ sought to build its user base by “sending out a mailer that said ‘free money’ to people in Silicon Valley”. ‘Oilcoin’ is described as “an attempt to create a cryptocurrency for the vertical market of crude-oil shipping and dealing [that] made absolutely zero penetration into that market.” ‘Cryptometh’ is another notable example, which “after a smooth launch… couldn’t get listed on Bittrex because bittrex objected to the… name. They were listed on allcrypt, but the price collapsed and miners abandoned the coin.”

Do you think that many of the cryptocurrencies launched during the recent altcoin bubble will be able to sustain a robust userbase long term? Or do you think the majority of altcoins are destined to fade into obscurity? Share your thoughts in the comments section below!

Images courtesy of Shutterstock

Bitcoin News is growing fast. To reach our global audience, send us anews tip or submit a press release. Let’s work together to help inform the citizens of Earth (and beyond) about this new, important and amazing information network that is Bitcoin.

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The Risks of Segregated Witness: Problems under Evidence Laws


The Risks of Segregated Witness: Problems under Evidence Laws


By Jimmy Nguyen
Chief IP, Communications & Legal Officer – nChain Group

The bitcoin community still debates whether Segregated Witness will help the network’s scalability or will instead create more problems.  As I have previously written, SegWit raises legal questions because it would enable full digital signature (witness) data to be dropped from the transaction data; this would undermine the ability of bitcoin digital signatures to also be used as electronic contract signatures (for example, for smart contracts).  Another key legal issue is evidentiary authentication of blockchain transactions.  Ideally, we are moving to a world where the bitcoin network can power smart contracts and be used for numerous types of data transactions.  But in such a world, what happens if companies and consumers cannot easily authenticate and prove those transactions later when there are legal disputes?   In this piece, I’ll examine the problem under evidence laws.

How SegWit Changes Bitcoin

The original Bitcoin white paper (in section 2) by Satoshi Nakamoto defines “an electronic coin” as “a chain of digital signatures”.  Each owner transfers ownership control of the coin to the next owner by digitally signing a hash of the previous transaction and the public key of the next owner and adding these to the end of the coin.  A payee can verify the signatures to verify the chain of ownership.  The transaction data conveys the inputs and outputs of coins being spent, and could also carry additional data to be recorded in the bitcoin transaction.

A normal bitcoin transaction stores both transaction and signature (witness) data together in a block, with the signatures accounting for approximately 60% of the data size.  As described in my prior post, this means bitcoin transactions signatures could satisfy e-signature laws, which often require the electronic contract signature to be “attached to or logically associated” with the contract terms – which could, for example, be coded into bitcoin transaction data.   (Of course, all bitcoin digital signatures are not meant to also be electronic contract signatures; however, they were originally set up in a manner that could satisfy the requirements of electronic contract signature law if the parties wanted to use them for that purpose.  For example, Alice could sign her bitcoin transaction – or at a more advanced level, a smart contract whose terms are encoded with the transaction data – using her bitcoin digital signature which serves two purposes:  (1) to verify the transaction to be sent and validated to the bitcoin network, and also (2) to confirm her assent to the transaction or smart contract terms for purposes of electronic contract law.)

How does SegWit change the picture?  Rather than directly raising the 1MB block size, SegWit would indirectly increase a block’s capacity to store more transactions by separating the signature (witness) data from the transaction data.  It then creates two hashes: (1) a “regular” hash of just the transaction data, without the signatures; and (2) a “witness hash” consisting of a hash of both of the transaction data and the witness data.  For storage in a block, the bitcoin protocol already uses a Merkle tree (a hierarchical data structure composed of hashes of information) to efficiently store transaction data, and places the Merkle root into the block header of every mined block.  SegWit creates a second Merkle tree to separately store the witness hashes, but importantly does not require nodes to keep the signature data.

In fact, SegWit assumes that signature data is only needed when transactions are being validated, and can thereafter be discarded as unimportant.  As described by its original proponent Pieter Wuille, “[t]hese signatures are only needed at time of validation”; SegWit treats “signatures [as] not part of the transaction”, its “redesign would allow you to drop this [signature] data.”  (Mr. Wuille is a co-founder of Blockstream, a blockchain technology company which helps support Bitcoin Core and advocates for SegWit).

Moreover, bitcoin nodes would not be required to keep the signature data.  As Wuille further explained, “[SegWit] allows you to drop the signatures from relay whenever you are relaying to a node that is not actually doing full-validation at the time. It also allows us to effectively prune this data from history, maybe we’re fine with not all nodes in the network actually maintaining these gigabytes of signatures that are buried under years of proof-of-work now.”  This is a key point because SegWit opens up the likelihood that most bitcoin nodes do not keep the signature data, because it is simply less efficient and costs more to do so.

If most nodes drop the signatures (which is the likely result), the blockchain can only reliably serve as a ledger for worldwide business transactions if:

  • Some nodes choose to specialize in storing all signature data. This gives those nodes special weight (as a trusted source) to verify and authenticate bitcoin transactions and signatures.  But this is antithetical to the idea of bitcoin as a decentralized, trustless system, with no central authority; or
  • Companies and consumers operating on the blockchain must keep their own copy of transaction records (or their own nodes storing all blockchain transactions with signature data), so they have access to the signature data later if needed for legal proceedings or audits. But this requires massive data duplication and eliminates the efficiencies of using the blockchain as a decentralized ledger.

Evidence Authentication

Under courtroom evidence law, SegWit would make it more difficult for businesses and consumers to authenticate blockchain-recorded transactions.  In civil and criminal court proceedings, evidence must be authenticated before it can be admitted.  Under U.S. Federal Rule of Evidence 901, “[t]o satisfy the requirement of authenticating or identifying an item of evidence, the proponent must produce evidence sufficient to support a finding that the item is what the proponent claims it is.”  This requirement is important to ensure litigants do not try to introduce falsified or tampered evidence.

How does this work in practice?  Consider a lawsuit over an automobile accident.  Drivers often seek to introduce pictures of the accident scene.  They could testify from personal knowledge that they used their smartphones to take pictures immediately after the accident and confirm the images are authentic.  Similarly, transaction and other business records can be admitted into court proceedings, but a witness typically must testify to authenticate the records.  For example, if you are involved in a dispute with your stock exchange over a stock trade, the stock exchange could introduce its electronic records of your account and trades, but one of its employees needs to testify about the authenticity of the data.  Likewise, you could produce your own printed copies of your stock trade history and testify about those printouts.  Thus, transaction records generally require a witness to explain what the transaction record is, how it is kept or was generated, and what it represents.

How Can Blockchain Receipts Be Authenticated Without Signature Data?

How would this work in the blockchain world?  If signature data is kept, it is easier to later authenticate the transaction record by referring to the bitcoin digital signature used to validate the transaction.  This helps meet the evidentiary requirement that the blockchain record “is what the proponent claims it is” – in other words, the blockchain receipt for the specific transaction.

But SegWit allows signature data to be dropped from the transaction data, making the task of evidentiary authentication more difficult.  If all nodes do not maintain signature data, who can testify as to the authenticity of signature data to match it to the relevant transaction data?  While the direct parties to a transaction could hopefully do so, what happens if they relied upon bitcoin nodes to maintain the signature and transaction data and did not keep (or lost) their own records?  Would that place nodes who opt to keep full signature data in a special “trusted” position to verify bitcoin transactions for legal proceedings (such as a government-approved service provider)?  Or would mere evidence that a signature was necessary at the time of the bitcoin transaction satisfy a court, if no such signature can now be produced?

These evidence issues will also play out at the U.S. state level. As more blockchain technology enthusiasm grows, U.S. state legislatures are beginning to examine what is sufficient proof of blockchain business transactions. In 2016, the state of Vermont enacted H.868; it adds a statute to Vermont’s evidence rules (12 V.S.A. §1913) stating that a blockchain-based digital record is now considered a business record and thus admissible over hearsay objections – but importantly, only if the blockchain record is authenticated by the written declaration of a qualified person.  One wonders, however, whether other states will follow suit, if SegWit reveals that key components of bitcoin transactions (such as signature data) can be dropped or altered from blockchain records.  In order to pass statutes like the Vermont evidence law, blockchain advocates need to champion the reliability and immutability of blockchain records.  But would legislators be so quick to recognize blockchain records if they knew the basic signature data that has always been saved with bitcoin transaction data could be dropped?

Need for a Witness

If signature data is not kept by any bitcoin nodes or only some of them, it creates a serious question of what witness (if any) can adequately authenticate bitcoin transactions from the blockchain.  While it was not dealing with blockchain, the U.S. Court of Appeals for the 9th Circuit decided an immigration case – U.S. v. Lizarraga-Tirado – which addressed questions about the admissibility of machine-generated evidence.  (U.S. v. Lizarraga-Tirado, 789 F.3d 1107 (9th Cir. 2015)).  The case led James Ching, a Law.com contributor, to write a January 2016 blog asking Is Blockchain Evidence Inadmissible Hearsay? and triggered other online articlesquestioning whether blockchain evidence is admissible in court.  As Ching describes, a blockchain verification “receipt must be introducible in litigation in order to be of any value as a verifier of a transaction.  Because a receipt obviously is asserting the existence of the transaction, it must qualify as a business record or it is inadmissible hearsay under the Federal Rules of Evidence.”   (These blockchain evidence issues were further examined in a June 2017 law review article entitled Blockchain Receipts:  Patentability and Admissibility in Court.)

The Lizarraga case involved the deportation of a defendant who was found improperly entering (again) the United States through the Mexico border.  The defendant claimed he had not actually crossed over the border to the U.S. side.  However, the government sought to introduce the evidence of a Google Earth satellite view of the scene where the defendant was arrested, including a tack marker to reflect the border agent’s notation (on a mobile device) of where the arrest occurred (on the U.S. side of the border, according to the agent).  But that pin marker was manually added to the machine-generated satellite image to record the agent’s contemporaneous impressions of where the arrest occurred.

To evaluate the admissibility of the Google Earth map image and the tack marker indicating whether the defendant crossed the U.S. border, the 9th Circuit decided that machine-generated evidence can be admissible in court (and is not hearsay because it is a machine, rather than a person, making an assertion); however, the evidence still requires that some witness authenticate it.  The party offering the machine evidence must show that the “machine is reliable and correctly calibrated, and that the data put into the machine (here, the GPS coordinates) is accurate.”  (Lizarraga-Tirado, 789 F.3d at 1110.)  The court noted that the rules of evidence allow for authentication of a “process or system” with evidence “describing the process or system and showing that it produces an accurate result.”  In the case of Google Maps, its satellite mapping and GPS coordinates could be authenticated by a Google employee or other witness who works with the program frequently, if they can testify about how the Google Earth system works.  The key is “to establish Google Earth’s reliability and accuracy.”

How would this authentication requirement be applied to a blockchain receipt offered as evidence in court? A witness would have to testify about the bitcoin network and its “reliability and accuracy” as a mechanism for maintaining business records.  The Blockchain Receipts law review article noted above (at pp. 447-448) gives examples of what types of witnesses could serve this function to explain the blockchain and its transaction record system: “an exchange programmer, an avid Bitcoin user, a programmer attempting to replicate the blockchain, a digital currency expert, or an investor could all be brought in at trial.”  That is certainly possible with respect to the original form of bitcoin transactions (which retain both transaction and signature data).   But the task is more difficult with SegWit, which allows nodes to drop the signature data, and could lead to complex evidentiary battles about the “reliability and accuracy” of the blockchain-stored data.

Thought Experiments About the Legal Risks

At the 2017 Future of Bitcoin conference in Arnhem, Netherlands, Bitcoin Unlimited’s Chief Scientist Peter Rizun gave a presentation about why bitcoins with SegWit are not real bitcoins.  To illustrate his point, he offered this thought experiment:

Imagine that you have 100 BTC in a segwit address and a few days later you notice that they’ve been transferred to an address that you do NOT control. You try to find the signature that authorized the transfer to prove the theft (you’re sure your private keys were secure so you think the signature must be bogus) but conveniently nobody seems to have it saved.

Can you prove that your funds were stolen?

In Rizun’s thought experiment, assume you sue your bitcoin wallet provider over the 100 BTC that you believe were stolen from your wallet.  As Rizun points out, you need to find the signature associated with the transaction in order to prove it was fake and not authorized by you.  But of course, you would not have kept it because you did not initiate the transaction.  And if your wallet provider and no node has kept the signature for the disputed transaction, you are out of luck.  At most, you or your wallet provider may only be able prove:  (a) a transaction occurred on a particular date and time for the 100 BTC; and (b) there is string of hashes that indicate the transaction was authorized at that time.  Is that enough to authenticate that transaction record for evidence purposes?  And more importantly, even if that limited transaction record is authenticated and admissible in court, the signature data is missing and a key question in the case cannot be answered from the evidence.

I take Peter Rizun’s example a step further and offer this thought experiment based upon potential smart contracts that could be recorded on the blockchain, and electronically signed by one party using a bitcoin digital signature.

Alice enters into a smart contract to pay you 5 BTC to buy your used automobile.  The contract’s terms are recorded on the blockchain as part of a transaction sending the 5 BTC to a SegWit address.   Alice’s digital signature to validate the bitcoin transaction is also the means Alice uses to digitally sign to signify acceptance of the smart contract (for purposes of e-contract law).  [In other words, Alice does not manually sign a paper contract, does not affix a digital copy of her handwritten signature to any document, and does not electronically sign a document using other means.]

Alice later disputes the smart contract, claiming that she did not authorize the transaction. You have a legal dispute over whether she in fact digitally signed the smart contract.   But Alice’s signature data was pruned after the transaction was validated onto the blockchain, and she claims she did not digitally sign the transaction.  You have no record of Alice’s private key used for the digital signature.

Can you prove that Alice digitally signed the smart contract?

This thought experiment illustrates the potential proof challenges of a SegWit world.  It can be more difficult to prove that Alice digitally signed the disputed smart contract if you have no record of Alice’s private key used for the digital signature, and no node has kept the signature data.

As with electronic contract issues, legal systems can find ways to address these evidentiary proof problems.  But SegWit makes the challenges harder by creating additional hurdles for authenticating blockchain records as evidence in legal proceedings.  These risks could deter businesses from operating more on the blockchain, and impede the greater vision of a Bitcoin 2.0 network powering smart contracts and greater functionality in the future.  The bitcoin community needs to demonstrate to courts, regulators and legislators that bitcoin records – and in particular signatures – are reliable and authentic; this effort is just getting started and should not be undermined by proposals such as SegWit which fundamentally change the nature of bitcoin.

By Jimmy Nguyen
Chief IP, Communications & Legal Officer – nChain Group

Jimmy Nguyen is Chief IP, Communications and Legal Officer for the nChain Group of companies – the global leader in research and development of innovations in blockchain technology.   Jimmy joined nChain after a 21-year legal career in private practice as an IP and digital technology lawyer.  He was a partner in major law firms representing multinational corporates and emerging companies.  A leader in the legal community, Jimmy was formerly Chair of the State Bar of California’s IP Law section, and co-chaired the California Minority Counsel Program.  He has been recognized by Lawdragon as one of the 500 Leading Lawyers in America (2008), by the Century City Bar Association as “Intellectual Property Lawyer of the Year” (2011), and by the Association of Media & Entertainment Counsel with its Industry Leader Award (2017).  Jimmy is also a Certified Information Privacy Professional/U.S.

Do you agree with Jimmy Nguyen that Segwit fundamentally alter how Bitcoin works and that it is a problem? Or do you think Segwit transactions are the best thing since sliced bread? Share your thoughts in the comment section below!

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BTC-e: The fleet that survived Pearl Harbor… for now


Mr. Robot in real life: Much of the drama surrounding BTC-e’s unfinished recovery played out in the shadows.


July 25, 2017: Users attempting to visit the long-established crypto currency exchange known as BTC-e get a “bad gateway” message instead. It is much worse, something Consensys.net calls “the first time the US government has attacked a foreign exchange on foreign soil.”

July 26: U.S. enforcers arrest Alexander Vinnik in Greece. He’s a Russian accused of money laundering. But some claim he’s a leader of the exchange. BTC-e contests this claim, but statements coming from the organization are initially few and don’t even seem believable.

August 1 (approximately): A man apparently in the Palestinian Territories launches or hosts a Change.org petition to be sent to the U.S. Justice Department. It demands the return of the currency seized by Washington and stands at over 4,000 signatures in early September.

August 9:TheMerkle.com reports BTC-e is claiming it has successfully maintained control over 55% of customer funds despite the raid and that it will issue tokens to cover the other 45% on a relaunched site.

Sept 1: BTC-e.com site relaunches as BTC-e.nz and begins returning some funds within three days. CoinDesk reports the process is “anything but smooth,” but “refunds” do begin on schedule. To paraphrase Commander Adama… we’re still alive; who’d have believed it a month ago? Most or many passwords appear to be reset, requiring a new password be sent to the user’s e-mail even if they last logged in during late July 2017. Users are told they can pull out 55% of their funds with 72 hours if they agree to forfeit their accounts and the remaining 45%. The exchange tells the world that users who “believe in us” may be able to recoup their full accounts later by sticking with it. BTC-e says it will not serve U.S. customers in the future and projects an essentially complete relaunch later in September.

Sept. 7, 2017:Pushback against Vinnik’s arrest belatedly gets off the ground as his wife accuses globetrotting U.S. intel services of attempting to make him their servant. “If I am guilty of something,” he reportedly tells Russia Today, “then my country should judge me.”4

There’s a real-time strategy game called Astro Empires, still very popular online since its launch around 2009. What draws me to it is the unspoken ethical element and the ability to be neutral like Switzerland. The game tends to climax seconds after you were sitting around doing nothing. Usually a blood-red message will appear in the upper right and you will learn someone much more powerful has occupied one of your bases with lots of allies and no provocation. Sometimes it was one you’d overlooked or left an unnecessarily vulnerable fleet at. You see the enemy’s recyclers feasting on your debris and then discover the worst part: He’s going to make a profit on the kill. It is a debacle. For hours, sometimes days, you scramble to maneuver, escape, strike back in even the smallest way. You wonder… is this the war I won’t be able to survive?

But over time, you regroup, gain knowlege, spot opportunities. You wear the enemy down if you can just hold it together, save this scrap, preserve that scout and stay in the fight. The most important thing in the game isn’t killing but rather well-organized production, construction and stealth. You sometimes can’t liberate your bases or even find a weak spot in the superior foe, but you can usually rebuild, collect, deprive.

So it must have been for the faceless but very three-dimensional pioneers from this beleaguered monetary endeavor. Peering bleary toward the late-night glow of laptop monitors, darting furtive into hidden spaces to retrieve caches of backup data… calculating, reconnecting, rebooting… never safe but never relenting. We might not ever know what risks they had to take, what heroic or selfish things each of them did. But whatever they did, it worked… partly. To paraphrase one observer, when was the last time you heard of an organization recouping and refunding any of its funds after a Federal attack like this?

BTC-e refund process

As one of the people who – reluctantly – exercised the refund option… here is how it played out.

Being a partial off-gridder living below the poverty line, I didn’t have that much money in BTC-e compared to what mainstream traders would have had. But it was a big percentage of my assets; there simply was no better, established place I’d found for trading a narrow basket of cryptos and fiats cheaply… with good graphing and no battery of personal data demanded.

When I began looking over the organization’s plan for making things right with its users, initially I was hopeful. Upon re-entering the site right after relaunch, it informed me that my (relatively recent) password had expired and e-mailed me a new one, activated by clicking a link. This was confusing, because one of BTC-e’s recent pronouncements warns of phishing scams and urges users not to click links in e-mails. Nevertheless, this e-mail and its link were legit; upon logging in… well let’s just say you’ve never seen a chat box full of trolls that looked so good. Because above it was my balance, just as it had read the day before this particular apocalypse. Most of the trolls, actually not trolls at all in most cases, seemed to be expressing their plans to stick with BTC-e… or scolding other users for asking questions that were answered in the posted news updates.

“This is my home,” one of them said.

One question that seemed unanswered at this point was whether one could withdraw partially from the exchange. Clicking on “withdraw” under any of my coins let me to a message indicating normal withdrawals were disabled. Clicking “refund” provided the following detailed “eject button” for completely evacuating the site but didn’t quite settle the issue:

BTCe cryptocurrency exchange refund process

In fact, there were only three options: sticking with it completely, bailing out completely, or donating a portion of your coin to the exchange on your way out. I wrote down the pros and cons of each course of action, slept on it and determined that I wanted to stay in but couldn’t.

BTC-e’s recovery against the odds

BTC-e’s plan for survival and “making good” no longer appeared just satisfactory to me; it appeared somewhere between competent and brilliant. The elements were nearly all there to inspire confidence… a seemingly miraculous partial-recovery against a world-conquering Power, a token set up perhaps quickly in crisis but also in the midst of an ICO boom, the goodwill of many users, an apparent road-map for recovering all assets. They were the place where lighting had already struck without killing them, likely hardened now and reconstituted against the next blow. I believed in them. Staying in, at least for a while, was worth the risk, except for one thing: They claimed that once the site was fully reconstituted, they would refuse to serve people in the U.S., or at least U.S. citizens in the U.S.

This meant that the whole business for us stateside folk was more of a closing window than an eject-button. After coming fully back on line, perhaps very soon, BTC-e would become a place where… though I might believe in them, they wouldn’t believe in me. I could only remain there by pretending to be an Irishman or something.

So I clicked all my coins it had listed for me, a list which impressively already included Bitcoin Cash. I added wallet addresses to which I could withdraw and then punched “refund.” At this point I got an error message indicating there was a problem with my Bitcoin Cash wallet address. It was located on a newly formed account at Bittrex.com. I did some checking, found no errors, couldn’t easily come up with another place to put Bitcoin Cash. I half-considered entering “-” instead, which would have donated the BCH to these folks who had stood up so well against so much. But another punch of the “refund” button resulted in no errors and a message indicating my refund was processing. That was on September 3.

The site indicated I would receive my coins within 72 hours. On September 4, more like 24 hours later, I received the amounts promised, of all coins promised except BCH.  On September 5, the Bitcoin Cash came through. Nothing failed.  With the rise in crypto prices since the day the site went down… I had suffered a loss of about 15% real value.  Logins by me on BTC-e were now disallowed. But finally it was possible to breathe and reflect.

On July 25, a date that should live in infamy, we witnessed the modern equivalent of a world government, with a military budget roughly ten times the size of Russia’s… lash out globally and near-randomly at the sustenance of individuals or the progeny thereof who it had once liberated from fascism, communism and nationalism in sequence. Belgians, Estonians, Bosniaks… some of each surely now gazing with a fury not preceded,  at the Anakin-Skywalker-turned-Darth-Vader figure now preying upon them from vast distances.

Lessons from history

The attack on BTC-e really could be viewed like Pearl Harbor or like the Battle of the Coral Sea… the former analogy being a little to pessimistic toward our side and the latter one a little too sanguine. At Pearl Harbor (usually perceived as a major IJN victory), Tokyo actually failed to achieve its strategic objective, which was the elimination of American carriers or perhaps the blockage of the facility. The Americans were able to preserve the important parts of their fleet and keep the harbor open. More importantly, the Japanese even screwed up their attempt to do the slightly-more-honorable-than-1904 thing of declaring war before the attack. This was what turned the Americans from neutrals into fanatical killing machines.

The monetary anger at Washington fortunately hasn’t had that effect and hopefully never will. But we may hope that its next attack (or perhaps China’s) will see stronger resistance both in terms of successfully protecting assets and providing the civic pushback worthy of our large but excessively fragmented community.

Flawed, unaligned with any nation, accused of being too friendly toward all, a place where everyone was treated as innocent unit there was some obvious counter-active reason… BTC-e accomplished more than nearly all before it and may accomplish much more than it did before this raid. Until you quit, you haven’t lost. BTC-e didn’t quit.

Featured image from Markus Spiske on Unsplash

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Why Bitcoin is Not a Bubble




The internet is replete with people referring to bitcoin as a “bubble.” They are spreading fear, uncertainty, and doubt galore. They believe bitcoin’s high price spells impending doom, but their criticisms move beyond mere skepticism. It seems like they just hate cryptocurrency. Yet many of these pundits do not fully grasp bitcoin…or even economics.

Also read: BTC-e Exchange Comes Back Online With Limited Functionality

For anyone unfamiliar with what a bubble is, investopedia refers to it as an asset driven by unwarranted, but exuberant, market behavior. It is basically a hike in price that has resulted in a lie or “false truth” about the actual value of an asset, and therefore presages a massive selloff.

People are Confused About Bitcoin

Bitcoin is Not a Bubble

Commentators like Peter Schiff and others have routinely said bitcoin is a “bubble,” and that it will collapse any moment. They make these claims, but do not seem to understand how bitcoin works. Everyone sees headlines like this all over the internet: “Bitcoin is a false truth, warns analyst,” and this CNBC article, “Bitcoin’s nearly five-fold climb in 2017 looks very similar to tech bubble surge.” There is even a site dedicated to collecting these FUD and clickbait claims the mainstream media repeats.

In a recent Chicago Tribune op-ed article called “Why Investors Should be Wary of Bitcoin,” writer Gail MarksJarvis, also compared the bitcoin boom to various historical bubbles:

Do you remember the housing crash of 2008, when the innocents who bought homes thinking they’d make a fortune on soaring prices ended up losing 30 percent on plunging home values? Do you remember the technology stock bubble of early 2000? Until the technology bubble burst, people were euphoric about the pioneers of the fledgling Internet in the 1990s, and figured the gains in technology stocks would never end.

She went on to say that bitcoin is not special or different in this regard. She implied it is a “volatile bubble” that could burst at anytime and leave investors gasping for air. Her comparisons — and all comparisons mentioned — are erroneous, though. The currency is not comparable to any of the aforesaid history lessons.

Bitcoin is Special

Bitcoin is special. It is not a company that could lose profitability and fail. It is certainly not a speculative real estate scam that could crumble as a result of government and bank-induced chicanery. Bitcoin is another animal.

Bitcoin is Not a Bubble

Its value is not increasing because of marketplace lies. It is increasing because it is a life-changing financial invention. It is increasing because more people are adopting it. The “network effect” is in full swing.

It is true investors are rabid to get on board and this excitement is causing bitcoin’s price to explode, but do not confuse this with an artificially inflated bubble based on a “false truth.” In accordance with the network effect, the more people that continue to get involved with bitcoin, the higher the price will climb.

Basic Economics

Bitcoin is also growing as a result of basic economics. The supply is limited to 21 million units and this necessarily makes bitcoin a scarce asset. When things are scarce and people want those things, their value will ultimately rise. Supply and demand at work.

Thus, when economics and the network effect intermingle, you have a recipe for explosive growth within an asset. Bitcoin is not some new version of the 17th century tulip bulb. It is a groundbreaking advancement in accounting and money.

Bubbles versus Technological Failures

With that said, this does not mean Bitcoin is guaranteed to succeed. The price could be affected if something bad were to happen to the protocol that underlies it. If this kind of event ever occurred, people would certainly lose faith in bitcoin and its price would collapse.

Bitcoin is Not a Bubble

However, this is not the same thing as an artificially hiked price or “bubble.” It is the result of a technological or community failure, but not a market failure. For instance, Bitcoin just upgraded to Segwit. However, Segwit does not necessarily align with Satoshi Nakamoto’s vision that Bitcoin should be a scalable, peer-2-peer cash system. Instead, it turns bitcoin into a settlement layer, which could do harm to the currency.

This illustration is not intended to spread panic. I am just saying bitcoin is susceptible to failures and crashes. It is just that these potential crashes are not the result of a “bubble.” They would occur because the community failed to make bitcoin economically viable. In either case, many people hope Segwit will work over the long run and that there will not be a technological failure.


Point being: if people want to call bitcoin a bubble, they ought to explain why exactly it is, instead of incompetently comparing it to past bubbles that do not share any characteristics with bitcoin other than a big price tag. If bitcoin were a bubble, it would be the largest one humankind has ever witnessed (not counting the 6,000-year old gold bubble, of course). But that is unlikely. It is more likely that bitcoin is just an amazing creation. Its value and potential dwarfs any fintech idea heretofore imagined, and the blockchain communities are just getting started.

Bitcoin is Not a Bubble

Why do people believe bitcoin is a bubble? How big will bitcoin actually grow? Let us know in the comments section below.

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PR: Why Investors Cant Wait To Invest In Revolutionary Dicing Platform Ethbet


PR: Why Investors Cant Wait To Invest In Revolutionary Dicing Platform Ethbet

This is a paid press release, which contains forward looking statements, and should be treated as advertising or promotional material. Bitcoin.com does not endorse nor support this product/service. Bitcoin.com is not responsible for or liable for any content, accuracy or quality within the press release.

The world’s first peer-to-peer cryptocurrency dicing platform, Ethbet, is opening its doors to investors starting September 17th at 8PM UTC via the Ethbet Crowdsale. Due to its small funding cap, investors are eagerly awaiting their chance to become a part of the first dicing platform that will allow users to bet against each other instead of against a centralized house.

That is the core of what makes Ethbet unique: its peer-to-peer nature. As other cryptocurrency gambling platforms are required to charge a large fee called a house edge on every bet that players make, they won’t be able to compete with Ethbet’s business model, which involves a match-making service that lets players play versus each other for much smaller fees. In addition to this, Ethbet offers on-blockchain bet execution and provably-fair betting. As a consequence of these features, Ethbet should have no trouble becoming a force to be reckoned with in the world of cryptocurrency gambling.

With the online gambling industry currently being valued at over $50 billion USD, Ethbet only needs to capture a mere fraction of the market in order to become a huge success. With other novel features planned such as supporting gambling with any Ethereum-based token and later expanding into other games and areas, Ethbet has captured the eyes of many investors aspiring to hop on for the wild ride ahead.

With previous dicing tokens giving investors unbelievable returns such as 1950% (vDice) and a whopping 6000% (Etheroll), Ethbet is a strong contender to become one of the best investments that can be made this month. With an interesting technical whitepaper published and a working demo of their vision, Ethbet plans to take the world of dicing by surprise in the coming months as it ramps up its support and later releases its public beta.

The Ethbet Crowdsale will begin on September 17th at 8PM UTC and is capped at only 5,000ETH. After it reaches this amount, it will permanently close to new investors and no new tokens will ever be created. Those interested in learning more about the Ethbet project are encouraged to check out their whitepaper and website which have been linked above.

Press Contact Email Address
Supporting Link

This is a paid press release. Readers should do their own due diligence before taking any actions related to the promoted company or any of its affiliates or services. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in the press release.

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IG Bringing Bitcoin, Bitcoin Cash and Ether CFD Trading to the Mainstream


IG Bringing Bitcoin, Bitcoin Cash and Ether CFD Trading to the Mainstream


Leading Contract for Difference (CFD) and spread betting provider, IG Group, is actively marketing bitcoin, bitcoin cash and ether CFD trading to the mainstream. While customers speculate without owning actual cryptocurrencies, IG purchases and sells them to hedge its clients’ positions.

Also read: New FCA Rules Could Reduce UK Bitcoin Spread Betting Appeal

IG’s Crypto Products

IG Group has been stepping up its game in promoting cryptocurrency products. Currently, products based on three cryptocurrencies are offered; bitcoin, bitcoin cash, and ether.

IG Bringing Bitcoin, Bitcoin Cash and Ether CFD Trading to the Mainstream“We’re the no.1 provider of CFDs and spread betting worldwide,” the company’s website states. IG is regulated by the UK’s Financial Conduct Authority (FCA). It operates in 17 countries and its subsidiaries are regulated by the relevant authorities in the countries where they operate such as Australia, Japan, South Africa, UAE and Singapore. The platform provides 185,000 active traders and retail investors access to more than 15,000 financial markets. In the U.S., it operates under the brand Nadex. The platform facilitates almost 8 million transactions a month.

Users can speculate on the price of bitcoin and bitcoin cash against the USD, EUR, and GBP. However, only USD is offered for ether.

IG Bringing Bitcoin, Bitcoin Cash and Ether CFD Trading to the Mainstream

Clients Want Choices

IG Bringing Bitcoin, Bitcoin Cash and Ether CFD Trading to the MainstreamSpread bets come in two varieties; Daily Funded Bets (DFBs) and forward bets, IG detailed. The former run for as long as the user wants to keep them open, whereas the latter expire after a set period of time. Therefore, the cost of maintaining a DFB position is levied on the corresponding account each day, whereas the entire cost of a forward bet is taken into account in the spread, IG noted.

Customers speculate without owning actual bitcoins, the company states. In addition, “IG’s bitcoin settlement is based on a combination of real time prices provided directly by some of the world’s most liquid bitcoin exchanges,” according to the company’s FAQs. IG market analyst Chris Weston explained:

The ability to take a position without putting down the full face value of the position is an attraction, especially when traders are purely speculating on price movements and, by not actually taking delivery of the coins, this mitigates the possibility of the coins being hacked or stolen.

While bitcoin products have been around since 2013, IG started offering its ether product in July this year. “The introduction of Ethereum as a trading vehicle has been led by demand,” Weston wrote, adding that “the bottom line is traders want choice.” The company added bitcoin cash (BCH) products last month.

IG Trades and Holds Bitcoin

IG revealed in its 2017 annual report that the group buys, holds, and uses bitcoin as a hedge in order to cover its clients’ positions. The company wrote:

The Group normally would hedge its clients’ trading positions with its brokers. However, as its brokers do not offer bitcoin as a hedging product, the Group purchases and sells bitcoins to hedge the clients’ positions.

For the financial year 2017, IG reported “£11.9 million (31 May 2016: £3.2 million) related to amounts held on bitcoin exchanges and in third party vaults.”

Reaching the Mainstream

IG Bringing Bitcoin, Bitcoin Cash and Ether CFD Trading to the Mainstream
IG’s Ad in Dagens Industri.

Recently, IG has been increasing its marketing efforts to attract investors to CFD and spread betting on the three cryptocurrencies.

IG’s ads for CFD and spread betting in bitcoin, bitcoin cash and ether, can be found in mainstream newspapers such as the London Evening Standard. The free daily newspaper has a circulation of 899,484 as of July this year.

A similar ad can be found in leading Swedish financial newspaper Dagens Industri. According to a media survey, Dagens Industri’s printed edition had about 328,000 daily readers during the beginning of 2017.

What do you think of IG’s product offerings? Do you think more people will be attracted CFD or spread betting on cryptocurrencies? Let us know in the comments section below.

Images courtesy of Shutterstock, Financial Times, IG, Reddit u/Fengstrom, Dagens Industri

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