vinistic – Page 2 – The Blockchain Report

Brazil eyeing blockchain for deed management

Add Brazil to the list of countries turning to block chain for deed management. In the wake of a massive fraud scandal, Brazil’s state-run technology company Serpo is pitching blockchain as the solution to the nation’s titling problems. The hope is blockchain can reduce fraud in a country where much of the population lacks property rights. (Reuters).

They key facts: Tracking property — whether it’s properties or global supply chain management — is one of the most popular uses for blockchain technology. Blockchain’s immutable trust is particularly useful in Brazil, which needs to build trust into the system.

The big question: Tracking property deeds using blockchain technology would be a huge step forward for Brazil. But it doesn’t solve one big problem — who owns the land in the first place. If Brazil is going to rebuild trust in the system, it will need to address this issue as well.

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Monero malware incidents on the rise

Monero malware is becoming a serious problem. The number of different malware attacks, which use infected computers to secretly mine monero, is rising precipitously. January alone saw three new attacks. And there were more than a dozen attacks in 2017. (Bleeping Computer)

Key vulnerabilities: Machines running Cleverence Mobile SMART server, Apache Struts and DotNetNuke have all been targeted by malware. So have non-enterprise users in Thailand, Vietnam, Egypt, Indonesia, and Turkey. (Bleeping Computer)

Smart take: As long as mining remains a resource-intensive (and profitable) activity, it will remain a popular use for malware.

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Weiss gives ethereum higher grade than bitcoin

Independent financial ratings firm Weiss Ratings awarded ethereum a B and bitcoin a C+ in its first cryptocurrency ratings report. No cryptocurrency received an A. EOS was the only other currency to receive a B. (CNBC)

The key facts: Bitcoin was dinged for slow transaction times, high transaction fees and no method to upgrade its underlying technology. Ethereum, by contrast, was faster and had better underlying technology. (CNBC)

Market fears: Weiss Ratings had to overcome distributed denial of service attacks to publish the ratings report. The attacks appear to have originated South Korea. Fears of low ratings for certain cryptocurrencies may have prompted the DDOS attacks. (Palm Beach Post)

The bottom line: Weiss Ratings is considered a tough, but fair rating service. As cryptocurrencies gain mainstream acceptance, more ratings like this will come out. And as more ratings come out, cryptocurrencies will move from a speculative market play to a much more informed one.

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SEC not happy with fake blockchain rebranding

As far as the Securities and Exchange Commission is concerned, fake blockchain rebranding is the equivalent of fake news — and they’re not happy about. In fact, the SEC is so unhappy about it that it’s planning on cracking down on companies who change their names to something blockchain related in an effort to make a quick buck — especially when those companies have nothing to do with blockchain technology. (Investopedia)

The money quote

Speaking at the Securities Regulation Institute this week, SEC Chairman Jay Clayton spoke pointedly about the blockchain name phenomenon. “I doubt anyone in this audience thinks it would be acceptable for a public company with no meaningful track record in pursuing the commercialization of distributed ledger or blockchain technology to 1) start to dabble in blockchain activities, 2) change its name to something like ‘Blockchain-R-Us,’ and 3) immediately offer securities, without providing adequate disclosure to Main Street investors about those changes and the risks involved,” Clayton said, according to his prepared remarks. (Investopedia)

The bottom line: Plenty of companies have been doing this. Some apparent, like Long Island Iced Tea becoming Long Island Blockchain to avoid bankruptcy and some, not so apparent. The SEC cracking down on this behavior is a good thing for investors.

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Bermuda to use blockchain for property deeds

Bermuda is going to modernize its property deed management system by switching to blockchain technology. Bermuda’s premier, David Burt, made the announcement at the World Economic Forum in Davos, Switzerland. (Royal Gazette)

The key facts: Tracking the transfers of properties is a natural fit for blockchain technology. And it’s not the only thing Bermuda is considering blockchain technology for.

Stan Stalnaker, founding director of Bermudian-headquartered Hub Culture, said digital assets such as property title deeds, marriage certificates, vehicle registration documents and ownership contracts will end up on blockchain. (Royal Gazette)

The smart take: Smaller countries like Bermuda are going to be early adopters of blockchain technology — especially for governmental use. Using blockchain both modernizes their systems and makes them thought leaders in the blockchain space.

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Blockchain gets new use in tracking mortgages

This can’t be a good idea. Remember when bankers bundling home loans and selling them to investors nearly wrecked the global economy in 2008? Well, Credit Suisse, Western Asset Management, Wells Fargo and U.S. Bank want to try doing it again. Except this time, they’ll be using blockchain technology to create a more transparent process and standardize the data. (Bloomberg)

The key facts

In theory, this is actually a smart use of blockchain technology. Blockchain’s distributed ledger technology can be used to simplify the process.

“Structuring securities is complex, involving many different parties, manual processes, duplicated documents and data in different formats,” David Rutter, chief executive officer of blockchain startup R3, which is organizing the consortium. (Bloomberg)

But the real debate isn’t whether blockchain can make this process better. The real debate is whether banks should be back in this business again at all.

The smart take: It’s interesting to note that the powers that be have no problem getting up in arms about the value of bitcoin or the potential for money laundering, yet have no problem with blockchain if banks are using it in potentially ruinous ways — like tracking mortgages to bundle them. It’s more proof that the fight isn’t about the technology, it’s about the people adopting it.

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Ledger raises $75 million in Series B round

Hardware wallet company Ledger announced late last week it raised $75 million in its Series B funding round. Venture capital firm Draper Espirit was the architect of this fundraising round. (CNBC)

The key facts

Ledger claims the investment to be one of the largest of its kind for a blockchain-related firm to date. It dwarfs that raised by BitGo and Blockchain, which achieved $42.5 million and $40 million respectively in Series B financing rounds in 2017. (CNBC)

Smart take: As technology advances, it’s usually the people/companies that make the plumbing that end up making the most money. When the Internet took over the world, the people that provided the hardware to make it run won big. Looks like blockchain is following the same path. People want secure places to store bitcoin and other cryptocurrency investments. Hardware wallets, which take the investments offline and into secure devices, provide that environment.

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Coinbase gets a new cryptowallet challenger

The quick read: Blockchain, the large British cryptowallet, entered the U.S. market late last week. As of now, American customers can only sell bitcoin using Blockchain. Buying bitcoin will become an option in the future. Blockchain’s British customers can buy and sell bitcoin. (CNBC)

The key facts: Cryptowallets have had a rough go of it on the customer service front and Blockchain is trying to capitalize on the frustration.

Given that backdrop, Peter Smith, CEO of Blockchain, said it’s better to start with just offering a sell service as it helps to control the launch in the U.S. and make sure people have a good experience. “If we are prioritizing short-term gains, we would prioritize buy — that is what most people have done. But it’s really time to make sure we nail that experience,” Smith told CNBC in an interview ahead of the launch announcement. (CNBC)

The bottom line: Competition will eventually create a better customer experience for cryptocurrency customers. That better customer experience is critical for the long-term viability of the industry.

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Blockchain technology posing legal questions

It usually takes the law several years to catch up to any new technology (if it catches up at all). The same will happen for blockchain technology, which is designed to challenge many of the normal business and legal paradigms. The folks at Above the Law have identified three key legal issues created by blockchain technology — data privacy, jurisdiction and dispute resolution and regulatory risk.

Cross border issues are at the heart of the data privacy and jurisdictional issues. Whose laws apply when a transaction crosses boundaries (which is one of the points of blockchain)? Will U.S. laws reign supreme or will EU laws dictate privacy rules. Whose laws will apply over a smart contract? Who gets jurisdiction?

And of course, nobody know what regulations surrounding cryptocurrencies and other blockchain issues will look like.

Smart take: Anytime you deal with technology that crosses borders easily and efficiently, legal challenges are sure to follow. Ideally, governments would get together to create policy and agreements addressing these issues. But given the current state of politics in the U.S. and the complete breakdown of multilateral negotiations between the U.S. and other nations, that meeting of the minds is quite unlikely.

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Blockchain games could be considered gambling

The quick read: Virtual and mobile games are a big business. So it’s natural that game developers are turning to blockchain to create new business and game concepts. But the use of blockchain technology could create some legal problems by turning social gaming into online gambling. (Bloomberg Law)

The facts: The key argument is whether virtual coins, pets, swords or anything else used as a prize has value. If it doesn’t have value, then there is no risk of running afoul of gambling laws. If it does have value, the legal equation changes. The tricky thing about blockchain technology is it can create value by allowing markets to form where they previously couldn’t. So players can sell those virtual pets or coins they’ve been making/collecting.

With other games a sword may only exist within the four corners of the screen, but blockchain enables players to own and trade those items long after the game is gone, Ari Scharg, a partner at Edelson PC and co-chair of the Illinois Blockchain and Distributed Ledgers Task Force, told Bloomberg Law. “With blockchain the concept of ownership changes,” Scharg said. (Bloomberg Law)

The bottom line: Blockchain can be used to create all sorts of new business ideas and technological innovations. But in doing so, companies (and their executives) need to beware of unintended consequences — especially legal ones.

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