SEC Chairman: “Bitcoin is not security”

SEC Chairman Jay Clayton commented on 26 April on the question of whether crypto assets should be classified as Securites. Bitcoin does not fall into this category as a pure crypto currency – tokens, on the other hand, like Ethereum and Ripple, do.

At the April 26 hearing of the Securities and Exchange Commissions (SEC) regarding the 2019 fiscal year, Chairman Jay Clayton commented on crypto currencies and ICOs. Initially, Clayton described the progress the SEC has made in recent months. The increased budget allows for an increase of 100 employees. This will allow the SEC to better engage with innovation and ensure the cyber security of US citizens.

Bitcoin is no security for crypto trader

“It’s a complicated subject. Because, as they have said, there are different types of crypto-assets. I divide them into two crypto trader categories. A pure medium of exchange – here often called Bitcoin – as a currency substitute is not considered by most as security.” Read more about it:

In fact, there are only a few pure crypto currencies in the top 20. Apart from Bitcoin (BTC), this probably only includes Bitcoin Cash (BCH), Litecoin (LTC) and Monero (XMR). Dash (DASH) with the masternode system is a unique case.

Tokens are classified as securities

Chairman Clayton then led the second category: Token. A token is a crypto asset used to fund projects.

“I have already said that there are very few tokens – so far I have not seen one – that are not security. If something can be classified as security, we should regulate it as security. Our securities regulation is based on disclosure and people should follow that and provide the information we need.”

Ethereum and Ripple also Securities?
According to Jay Clayton’s definition, Ethereum and Ripple would also be Securites. At Ripple, the company holds over half of all XRP. Ethereum, on the other hand, initially financed itself through a pre-sale in 2014. This circumstance is sufficient to classify ETH as a security in the eyes of the SEC. Although the Ethereum network has been “decentralized” since its launch, the pre-sale could lead to problems.

Furthermore, the Ethereum project plans to switch the consensus algorithm from Proof of Work to Proof of Stake. By then at the latest, the SEC’s securities classification should apply.

A group of Silicon Valley heavyweights apparently tried to turn the SEC’s opinion around without any result. After all, a laissez-faire approach to ICO projects symbolizes an attractive contact point for many start-ups. The SEC is thus following in the same footsteps as former CFTC chairman Gary Gensler. Last week, Gensler had also spoken of a classification of Ripple and Ethereum as securities.

Design elements

This might sound like another future music for Blockchain, but Stocker sees it more realistically.

For him, the Blockchain provides the core elements for a network that is made for this technology. It enables a decentralized network, he says, which can include a large network of users who don’t have to rely on interaction between trusted parties.

Stocker explained that gas station users today have an “insecure” relationship with the gas station when paying with cash.

This relationship could be redefined by the Bitcoin news

“It’s about economically viable nano-transactions. It’s about secure business logic, there’s no credit risk in this form of transaction,” he said. In this way, all partners in the network will bring their own capabilities to this Bitcoin news project.

UBS, Stocker said, will focus on the customer experience as ZF explores the application of the technology in the vehicle. innogy itself is looking for answers through the connection of IoT (Internet of Things) devices and the blockchain itself.

All of this involves major challenges. For example, how a text can be converted into a smart contract that is to be made available for an entire network (a strong focus of many companies in 2017). It also addresses the question of how to comply with taxation and regulatory requirements.

Ease of use

Stocker sees the concept as more than just a new technology being developed. The most important feature behind this idea is the increased simplicity. Users can set how much an eWallet can output automatically. This saves drivers time and avoids the biggest inconveniences that can occur when driving.

“For example, the car automatically pays the toll on the way to work, saving valuable time that would otherwise be wasted in the toll authority queue,” ZF quoted in a press release.

“The driver is then informed during the journey and receives status information online on every transaction made with the Car eWallet.

Another problem that ZF wants to solve is the still confused payment system at electric charging stations.

The company points out that different charging stations prefer different payment systems, sometimes including their own recharging cards. However, the eWallet has the ability to standardize these payments, so the car automatically makes the payment when it is plugged in.

Build drive
The tests are currently being executed on a private block chain for the first time. However, Stocker points out that this could result in a larger consortium block chain.

Original equipment manufacturers (OEMs) or other automotive parts suppliers could be among the first to participate in a larger and wider blockchain, he said.

This may all sound a little too utopian, but Stocker said this is an idea whose time has come. He referred to Project Oaken, an Ethereum blockchain app to be installed in Tesla vehicles to make it easier for drivers to pay the toll.

Other current events include the acquisition of a digital payment service provider by Daimler AG, Stocker said. This shows an increased interest in such efforts in the automotive industry.

Stocker said:

“These goals are definitely on the agenda”.

New pilot projects of the Blockchain Council

The Dubai Global Blockchain Council (GBC) is an initiative of public and private companies, government agencies and start-ups. Today they presented seven new proof-of-concepts at the industry conference Keynote 2016.

The GBC was launched in spring 2016 and has more than 30 members. The meeting enjoyed new projects from IT giant IBM, telecommunications operator “du” and the Dubai Multi Commodities Centre (DMCC). The projects ranged from initiatives to improve the exchange of information among loyalty programmes (such as in a department store, editor’s note) to reducing the shady diamond trade.

In the first speech of the morning at Burj Al Arab in Dubai, Saif Al Aleel, CEO of Dubai Future Foundation, spoke of his idea of how to bring together inventors and big players in the local market.

Al Aleel explained the Bitcoin formula to the audience:

“We believe that the best way to prepare for the future is to create the future itself, and the best way to create a future is to work with everyone. We believe that Bitcoin formula technologies can improve parts of our lives and our business world … (everything) through faster transactions and offering faster and more efficient services.” More about it on onlinebetrug.

Noah Radford, Chief Operating Officer of the Future Foundation Museum, described the pilot projects as a foretaste of the organization’s progress.

“These are seven of the Council’s exciting pilot projects. At least as many are currently under development, they are not yet reportable,” he said.

Raford said all these projects are planned to be completed within the next three to six months. The goal is to evaluate these pilot projects at a later stage and thus advance the Group’s performance by discovering new and better applications.

Below we present the presented projects:

1. health data
“How many times have you gone to the doctor and explained your symptoms just to find that you forgot your x-rays?”

Jose Valles is vice president of development for “du”. He started his speech today with this sentence and unveiled a project by the telecom giant to digitize health data using the blockchain.

The concept, along with similar announcements from Philips and IBM, is the latest innovation in this area to address existing health challenges.

In collaboration with the Estonian software company Guardtime, the Dubai project wants to be at the forefront. According to Valles, the blockchain will increase the security of health data.

“We bring the blockchain technology here to safely open data,” Valles said.

“We believe this will catapult the acceptance of the technology forward.”

As one of the largest telecom providers, “du” has supplied 47% of all mobile phones in the United Arab Emirates and made 30% of the sector’s profits in 2014.

2. secure diamond trade
Probably the most important presentation of today was given by James Bernard, Director of Business Development at DMCC. DMCC is one of the largest suppliers of commodity trading in the region.

In the presentation, Bernard explained how his organization, in collaboration with other GBC members, is working on a pilot project using blockchain technology to authenticate and transfer Kimberly certificates. Kimberly Certificates are physical documents and part of the Kimberly Process introduced by the UN in 2003 to prevent the spread of blood diamonds.

“Our goal for the pilot project is to digitize and transfer Kimberly certificates – and simplify the collection, dispatch and storage of statistics from every member country in the world,” he said.

Bernard pointed out that he not only believes that the blockchain is a key role in the digitization of the paper process, but that it gives member states the opportunity to share this data with each other. This would reduce duplicate documents and other manual errors.

Bernard’s presentation is something extraordinary, given the numbers of the organization. It traded more than $35 billion in cut and raw diamonds in 2010.

As the DMCC is currently chairing the Kimberly Process and coordinating among the 81 member states, Bertrand explains that his organization has all the necessary members for the pilot project to guarantee success in the market.

EOS achieves TPS record – stress test or attack?

The still young EOS-Mainnet set a new record on 15 July with 1275 transactions per second. Now voices are being heard that there is an attack on the ETH network behind it.

Since 15 July, the EOS Network Monitor has had a new record: 1,275 transactions per second (TPS) form the previous record of the ‘decentralised’ operating system, whose Mainnet was launched in the first week of June. Currently, the level is between zero and 3 TPS again, with the exception of a few outliers who scratched the 500 TPS mark. The 24-hour interval at which the record was reached recorded a total of 500,000 transactions – an average of around 5.8 TPS. The Ethereum Space is now discussing whether the 1,275 TPS second could be an orchestrated action by the EOS team. A dApp developer suspects a connection between the EOS Sprint and the virulent blockage of the ETH network since 15 July, which catapulted the transaction costs to almost 0.8 US dollars. On Twitter, PowH3d designer Justo claimed that it was “really funny to outdo your competitors with money from crowdfunding to prove that you have the better product”.

The same had already happened before the Mainnet was launched on the news spy

“I myself and many other high-profile developers of Ethereum applications predicted that EOS would most likely try to attack the news spy network’s gas prices to validate the launch of their platform. Every day until the launch of the EOS platform on 6 June, gas prices rose due to “Airdrop tokens”, Justo told – and added: “If you don’t think it was EOS, who has two million US dollars a day to attack Ethereum and also has EOS tokens?

Vitalik Buterin estimates damage at USD 15 million

Justo’s accusations should be treated with caution. The project PoWH3D is a self-proclaimed snowball system including its own “Shill Kit”, which screams “Attention, satire! The same applies to the new project FOMO3D, which advertises with the slogan “Your personal exit scam”.

Welcome to blockchain development. Your ICO is over, hype is drying up. Take the private keys, drain everything.

The evidence that there is malicious intent on the part of EOS behind spam is still relatively thin. An analysis of the block in which the 1,275 TPS were reached shows that the spam was not as high as the 1,275 TPS: Almost all transactions were carried out by an account called ‘Blocktweet’.

Speculation as to whether it was a stress test or a malicious spam attack continues. In any case, it is the ETH network that suffers the most. Ethereum founder Vitalik Buterin estimates the damage at 15 million US dollars. The principle of a free market economy forbids him to get excessively excited, yet he is still amazed by the action, which was a spam attack for him.

Former US Federal Reserve governor believes in central crypto currency

The former Governor of the US Federal Reserve Kevin Warsh believes in the potential of crypto currencies for central banks. In an interview with the New York Times, he praised the innovative power that these currencies would bring. According to Warsh, although digital currencies are currently affected by strong fluctuations in value, they could still be used to a greater extent with the help of more decisive research. He also brought the issue of the US Federal Reserve’s own crypto currency back into play. If he were still a member of the leadership, he would launch such a “Fedcoin”.

Usually it’s the voices from the end that make the loudest noise. Kevin Marsh, who held one of the twelve governorships of the US Federal Reserve from 2006 to 2011, also showed this last week. In an interview with the New York Times on Friday, he called on the U.S.

Federal Reserve to become more involved in crypto-currencies, contrary to its current direction

One such possibility would be the release of a crypto currency centrally controlled by the US authorities. Warsh is thus bringing the “Fedcoin”, initiated last year by the New York Federal Reserve, back into play. The current head of the central bank Jerome Powell, however, thinks little of crypto currencies.

If he were still part of the leadership of the Washington authorities, he would have long drawn attention to “the Fed issuing a Fedcoin,” Warsh said, “Not that this cash would displace and replace, but it would be an effective way to conduct monetary policy in the event of the next crisis.

According to Warsh, the world of central banks is divided into those who find crypto currencies either “cool” or “risky”. Nevertheless, central banks would have to make much more decisive efforts and exploit their potential.

For this to succeed and for digital currencies to become reliable means of payment, it would also be necessary to adapt the existing legal framework and integrate crypto currencies into its system.

“Congress has given the central bank a monopoly on money. And if the next generation of crypto currencies looks more like money and less like gold – and there will be less volatility associated with them, so that they do not become a purely speculative investment but reliable means of payment – I would not want anyone to take this monopoly away from me as a matter of principle, the 48-year-old predicts the US Federal Reserve’s coming control claims.

Already in March, the current lecturer at Stanford University had presented the advantages of Bitcoin in a guest article in the Wall Street Journal. Nevertheless it had reminded, all crypto currencies could end in the future worthless .

US Federal Reserve wants to use blockchain for payment transactions

In addition to crypto currencies, Warsh also highlighted the potential of the blockchain for central bank activities in a report published this week. As with interbank transactions, there are a number of application areas for which the US Federal Reserve can use the technology.

Unlike crypto currencies, this attitude does not contradict his former employer. This is because the current head of the Federal Reserve and former Warsh competitor Powell has already expressed several positive opinions on distributed ledger technologies in the past.

“At the moment we understand the blockchain as something that can have a decisive application in the payment traffic of the economy”, says Powell.

Until last year, Warsh himself was regarded as a hot contender for the post of chairman of the central bank. US President Trump, whom he had advised on economic issues prior to his election as president, was, however, a thorn in his side. In his opinion, Warsh was “too young to be taken seriously by the markets in the event of a renewed financial crisis”.

Observers found this reasoning inappropriate, as Warsh had already shared responsibility for the fate of the central bank during the 2008 financial crisis.