Binance’s Singapore Fiat-to-Bitcoin Exchange Is Launching Next Week

19-Apr-2019 Intellasia | Coin Desk | 6:38 AM Print This Post

Cryptocurrency exchange giant Binance will launch its new fiat-to-crypto platform in Singapore next week, its chief financial officer said.

CEO Changpeng “CZ” Zhao announced in early April that the Singapore fiat “on-ramp” would be coming sometime this month. But speaking to CoinDesk Wednesday from Paris, Binance CFO Wei Zhou gave a more precise timeframe.

“Next week we are going to launch the Singapore simple buy/sell on-ramp,” said Zhou, who was in town for Paris Blockchain Week. “It will actually be a new product we are launching, as a very easy buy/sell platform so users in Singapore can buy and sell bitcoin with Singapore dollars.”

Zhou said that for now in Singapore, “it will just be bitcoin, but we hope to add more [cryptocurrencies]. For a lot of these regulated jurisdictions, it’s easy to start with things that people know and understand and you can gradually build on that.”

Binance began its project of building fiat-to-crypto gateways in January when it partnered with Simplex to let traders use Visa and MasterCard to buy a wide range of cryptos. Then in March, it launched Binance Lite in Australia which allows users to buy bitcoin at newsagents in over 1,300 locations across the country.

The company’s expansion in recent months has been both rapid and eclectic, taking in Europe and the UK via the islands of Malta and the British Crown Dependency of Jersey. The company has also set up in Uganda citing the need to bring financial inclusion to the underbanked in that region. It is currently the No. 5 exchange by 24-hour trade volume (when excluding no-fee trades and transaction mining), according to CoinMarketCap.

Asked if the exchange had any designs on North America, Zhou said:

“We have plans for US but I can’t go into these right now.”

Clear the DEX

Binance has also embarked on plans to start a system of decentralised exchange (DEX), which is going to be built on Binance Chain, the exchange’s home-grown ledger to transfer and trade blockchain assets.

In terms of the timing of that, Zhou noted that the Binance Chain testnet is up and running and “we hope to release the mainnet by the end of the month as well.”

He said there are a couple of reasons for pursuing a DEX route. As well as providing trading functionality, exchanges, by their centralised nature right now, hold customers’ assets, making them juicy targets for hackers.

“That is a risk that we do not want to take in the long run,” said Zhou

Speaking philosophically, Zhou also pointed out that change is the only constant in crypto. Two years ago 90 percent of trading was fiat to crypto; today 90 percent is crypto-to-crypto, he said. Hence:

“I think the key here is that innovation is going to happen regardless of whether it comes from us or other people so we would rather be proactive.”

It’s possible to disrupt your own business model and do so in a virtuous way, Zhou added. “We are almost there, very close.”

Old money

Regarding the expectation that large swathes of institutional investors from the traditional finance world are waiting to enter the crypto sphere at some point soon, Zhou said Binance has seen institutional trading increase some 40 percent to 50 percent over the past six months.

According to Zhou, these institutional traders are leveraging Binance’s application programming interface (API), heralding a new type of institution entering the space. These players wield less capital than, say, a typical tech-focused hedge fund, but they operate in a way that is “highly nimble, highly algorithm-driven and highly efficient,” he said.

This will characterise the new money entering institutional crypto trading, said Zhou, adding:

“I think right now, all the world is focused on what they call ‘old money’ which is great, but I think the style of a lot of these institutions just don’t move at crypto speed.”

In the context of crypto trading, algorithmic trading strategies interact directly with the technology of an exchange. Traders can develop their own applications, using programming languages like Python, and execute trades using the API.

“It’s basically my code fighting against your code fighting against another code figuring out each one,” said Zhou.

Binance CEO Changpeng Zhao: CoinDesk archives

Cryptocurrency exchange Coinbase is expanding crypto-to-crypto conversions and trading services to 11 more countries.

The San Francisco-based firm announced the news in a blog post on Wednesday, saying that customers in Argentina, Mexico, Peru, Colombia, Chile, India, Hong Kong, South Korea, Indonesia, the Philippines and New Zealand can now access crypto-to-crypto exchanging services.

The company said that it is offering the services via both Coinbase.com as well as Coinbase Pro, its professional trading platform.

The expansion means Coinbase now has a presence in a total of 53 countries across four continents, from earlier 32 countries in two continents, according to the announcement.

Relatedly, the exchange detailed that direct trading between cryptocurrencies, in general, has overtaken traditional fiat-to-crypto trading across the globe last year.

According to industry-wide “verified” trading volume figures, Coinbase said crypto-to-crypto trades formed 51 percent of the total in February 2019 as compared to 41 percent in August 2018:

Coinbase added crypto-to-crypto trading support for retail customers last December, enabling them to access the service through Coinbase.com as well as the Android and iOS apps. Earlier, the support was available only to professional customers.

Editor’s note: Following the publication of this article, Coinbase updated the graph in the blog post, saying that the data is based on industry-wide trading trends and not just Coinbase-only trading volume. This story has been updated accordingly.

Coinbase image via Shutterstock; Graph courtesy of Coinbase

Academic researcher Dr Ayo Akinyele is working on a cryptographic solution to boost privacy across second-layer blockchain solutions like the lightning network for bitcoin.

Akinyele just announced the formation of Bolt Labs, named after the BOLT protocol that aims to give lightning hubs shielded addresses for anonymous payment channels. The startup is launching with a $1.5 million seed round led by Dekrypt Capital and support from Ripple’s investment arm, Xpring, plus Lemniscap and Access Ventures.

Furthermore, Electronic Coin Company CEO Zooko Wilcox is advising Bolt Labs and helping the startup create its first proof-of-concept this summer for the privacy coin zcash, which doesn’t use lightning like bitcoin.

“Ultimately, interoperability is the goal,” Akinyele told CoinDesk about why the startup is working on compatibility for both bitcoin and cryptocurrencies without comparable scaling solutions. “Our design is independent of the underlying currency.”

Stepping back, BOLT is still an experimental software idea that theoretically applies directly to the cryptocurrency node, which communicates payment information to the broader network. Whether the software is integrated directly into a Layer 2 node like a lightning client or a Layer 1 node like zcash’s, the intention is always to protect information about the account, including who sends payments to it and how much the channel holds.

“The initial balance of the channel is hidden,” Akinyele said. “And now when you make a payment from this channel no one can link you to that payment unless you disclose the information.”

Dekrypt Capital co-founder Howard Wu told CoinDesk these types of features will be essential for cryptocurrency payments to spread without proliferating surveillance capitalism, a term coined by sociologist Shoshana Zuboff in 2014 to describe omnipresent surveillance and data collection online.

“A lot of credit card companies today, and advertising companies, acquire data from outlets like Best Buy or Overstock and sell this data to traders or other companies,” Wu said.

Referring to compliance requirements such as the European Union’s general Data Protection Regulation, which prohibits companies from immutably storing some types of personal data, he added:

“We see that as being a risk, fundamentally, to privacy and compliance. Being able to have shopping sites integrate wallets [with BOLT] in the future would absolutely be interesting for helping to protect users.”

Dekrypt Capital co-founder Jon Allen also said that cryptocurrencies will only reach their decentralised potential for empowering individuals if there are options to spend crypto in ways that are closer to cash, without names and addresses.

“We also need a private, money-like currency,” Allen said.

Speaking to why Xpring invested in Bolt Labs, a Ripple spokesperson told CoinDesk:

“We’re believers that the combination of Layer 2 solutions like Bolt and interoperability technologies like Interledger will improve the experience for both developers and end users, thereby paving the path for the mass adoption of crypto.”

Baby steps

Akinyele told CoinDesk there’s still a long way to go before the first BOLT mainnet experiment launches later this year.

“I would liken [BOLT] to infrastructure that makes it possible to have instant, cheap and private payments for everyday purchases,” he said.

Lightning Labs engineer Alex Bosworth, who is partially responsible for the LND implementation Akinyele is modelling BOLT after, told CoinDesk that more privacy features are already being built into lightning itself.

“We’ll try to make private channels less identifiable,” Bosworth said. “We’re going to change it so that a two-of-two multisig on-chain looks like a single multisig, just like a normal spend. That will use more of a cryptography solution.”

This strategy of making payment hubs look like normal wallets, obscuring the individual payments that pass through them, will also use a cryptographic solution. Only time will tell how BOLT’s cryptographic solution will fit in with these lightning updates.

In the meantime, the non-profit Zcash Foundation, separate from Wilcox’s startup, gave Akinyele more than $40,000 worth of grants in 2018 as the researcher geared up to launch Bolt Labs. Bolt Labs eventually plans to generate revenue by offering services to institutions involved in activities like over-the-counter trading, that require both significant scale and discretion.

Comparing the potential of BOLT-enhanced nodes to standalone lightning nodes, Zcash Foundation executive director Josh Cincinnati told CoinDesk:

“BOLT’s approach potentially offers more privacy and similar scalability characteristics that we think are worth researching and exploring.”

Lightning image via Shutterstock

The Enterprise Ethereum Alliance (EEA) and Microsoft have corralled the major blockchain providers behind a new project to help businesses design and create the right sort of crypto tokens for their particular needs.

The EEA, which is focused on creating standards and specifications for business users interacting with ethereum technology, stressed it is merely the host for the so-called “Token Taxonomy Initiative,” an entirely catholic and technology-neutral project which crosses ethereum, Hyperledger, R3′s Corda and Digital Asset’s DAML.

Announced Wednesday, members of the Token Taxonomy Initiative include Accenture, Banco Santander, Blockchain Research Institute, Clearmatics, ConsenSys, Digital Asset, EY, IBM, ING, Intel, J.P. Morgan, Komgo, Microsoft, R3, and Web3 Labs, among others.

EEA executive director Ron Resnick explained that in essence, this is a composition framework which is open and accessible to technologists and non-technologists alike. It will comprise workshops as well as a GitHub repository where findings and test data can be linked to existing token implementations on various blockchain networks, said Resnick, adding:

“We are doing this for the greater common good. Standardising tokens across all networks could hold the key to one of the greatest economic opportunities in modern history.”

Marley Gray, principal architect at Microsoft, who came up with the idea, explained the inspiration for it arrived from two directions.

On the one hand, Gray said his team ended up fielding lots of questions from internal businesses at Microsoft, keen to explore how software licenses (traditionally complex holographic product IDs that you have to register) could be tokenised and imported into smart contracts.

At the same time, through his involvement with the blockchain activities of Microsoft’s Azure cloud platform and the EEA, Gray said he was often in touch with various industry consortia who were spending a lot of time trying to work out how best to tokenise a barrel of oil, for example.

Gray said his team would have many rather repetitive conversations trying to describe tokens and the particular properties desired by users “we would use analogies like airline tickets a lot” and how these requirements relate to existing blockchain platforms.

As such, a kind of hierarchy of characteristics and behaviors was established: fungible and non-fungible; transferable and non-transferable; subdividable and non-subdividable; mintable and burnable, and so on.

Gray told CoinDesk:

“The idea is to use a workshop with business people to describe a token completely that services their business requirements. That token itself is composed of reusable components so another group can use those same components to define a slightly different token without redefining all the things that initial group did so it creates this framework.”

Drag and drop

In practical terms, Gray said a business user or consortium can “grab a non-fungible token and drag it over and then start from a pallet of behaviors, drag those behaviors,” as they would drag an icon on a screen.

The result, he said, is that a business person can create a token visually using a design tool that does not involve writing any code whatsoever, and allows them to then say to developers, “I want one of these.”

In addition, Gray said his team has been exploring ways to use GitHub so that these certain business requirements can be matched to stored metadata and “mapped” to specific blockchain implementations.

“An individual [token] behavior could point to a snippet of code for a particular platform, i.e. DAML for some particular behavior would link me to a particular piece of DAML code, or the same for Solidity, or Chaincode.”

Judging from the cross-blockchain support the idea is getting, others in the space have also been having repeated conversations trying to define tokens.

For instance, Oli Harris, head of Quorum at J.P. Morgan, said in a statement: “With this significant step, the industry leaders from the world’s largest companies and innovative startups are coming together to define tokenisation in ways designed to address the needs of the global enterprise community.”

Meanwhile, R3 co-founder and token tsar Todd McDonald added: “The initiative represents a new and innovative way for the industry to collaborate on defining a token taxonomy that is appropriate for any enterprise-grade blockchain technology.”

Reiterating the need to remain network-agnostic, Gray concluded:

“We prefer people to go into the workshop not even thinking about whether it’s ethereum or Hyperledger Fabric or Corda or DA. In fact, we tell people when using the framework is to leave the technology baggage at the door.”

Microsoft image via Shutterstock

Japan’s equivalent to Amazon, e-commerce giant Rakuten, has started accepting account registrations for its new cryptocurrency exchange, Rakuten Wallet.

For now, only customers who have an account at Rakuten Bank or who already have a Rakuten member ID can sign up in preparation for the launch of trading, the firm’s website indicates. It’s not yet clear when it will accept applications from the wider public.

The firm said in an announcement it has also rolled out an automatic support service using AI (artificial intelligence) technology to answer customer inquiries. It’s also planning to soon launch a mobile app allowing users to trade cryptocurrencies, as well as to make deposits and withdrawals.

The firm received a license for its cryptocurrency exchange late last month from the Japanese Financial Service Agency. The exchange is therefore registered with the Kanto Local Financial Bureau as a virtual currency exchange service provider under the country’s Payment Service Act.

Rakuten Wallet was previously known as Everybody’s Bitcoin, an exchange Rakuten acquired for $2.4 million last August. A rebranding of the entity to Rakuten Wallet took place on March 1, at which time the older service was closed.

Rakuten said last August that it believes “the role of cryptocurrency-based payments in e-commerce, offline retail and in P2P payments will grow in the future.”

“In order to provide cryptocurrency payment methods smoothly, we believe it is necessary for us to provide a cryptocurrency exchange function,” it added.

Rakuten’s e-commerce site started accepting bitcoin payments in 2015, when it integrated its US website with bitcoin payment processor Bitnet.

Rakuten image via Shutterstock

Mitsubishi UFJ Financial Group (MUFG), Japan’s largest bank, has backed an additional $6 million Series B round for cryptocurrency sleuthing startup Chainalysis.

The investment came via the bank’s venture capital unit, MUFG Innovation Partners, Chainalysis said Tuesday. The round also saw participation from Tokyo-based investment firm Sozo Ventures.

The additional funding means Chainalysis’ total for its Series B round now sits at $36 million. It raised $30 million back in February, in an initial round led by venture capital firm Accel Partners.

With the additional investment, Chainalysis said it aims to expand its Asia-Pacific business and open a new office to assist that effort.

The startup said it has already significantly grown its business in the region, claiming to have more than doubled client numbers and increased contracted revenue by “more than 16x” last year.

“Chainalysis plans to build on this momentum with a physical presence and deeper engagements with entities including Sozo and MUFG, who will provide critical market insights,” the firm said.

In April 2018, Chainalysis raised $16 million in Series A investment from Benchmark Capital, and launched a cryptocurrency compliance tool, called Chainalysis KYT (for “know your transaction”), which it says provides transaction analysis in real time.

MUFG Innovation Partners CEO and president, Nobutake Suzuki, said in yesterday’s announcement:

“Chainalysis’s compliance technology is important to providing the insight and anti-money laundering controls banks need in order to establish next generation compliance frameworks.”

Founded in 2014, Chainalysis notably helped investigations in the Mt. Gox bankruptcy case, in the attempt to locate the collapsed exchange’s missing bitcoin.

Last week, the startup published a public comment letter in response to a draft recommendation by the Financial Action Task Force (FATF), saying that it is unrealistic and harmful for the crypto industry to expect exchanges to send know-your-customer (KYC) information to recipient platforms with every transaction.

MUFG image via Shutterstock

Crypto exchange Gate.io has raised $64 million worth of crypto assets in seven days for its own exchange cryptocurrency that won’t be launched on a blockchain for at least six months.

One of the oldest Chinese exchanges, Gate.io claimed on Monday that over the last week it was heavily oversubscribed with orders totalling $2.99 billion for the so-called Gate Points, which can be used for offsetting trading fees on the platform.

Moreover, each Gate Point further entitles a holder to receive 2.5 Gate Tokens (GT), the native cryptocurrency of Gatechain, the exchange’s yet-to-be-launched proprietary blockchain. Gate.io says it expects the network to go live in the fourth quarter.

According to a blog post published on April 1, the first phase of the Gate Points sale started on April 8 and lasted for seven days. As Gate’s fees are paid in tether (USDT), the US dollar-pegged stablecoin, one Gate Point is worth 1 USDT in reduced fees. The points were purchasable with bitcoin, tether, ether, EOS, or the tokens of rival exchanges Binance (BNB) or Huobi (HT).

Marie Tatibouet, chief marketing officer of Gate.io, told CoinDesk in an interview that the exchange distributed 150 million GTs to successful Gate Point subscribers during the first phase, and in return, collected $64 million as prepaid trading fees. (The initial reward ratio of 1 Gate Point for 2.5 GT depreciated by three percent every day during the first phase.)

Gate.io was founded in 2013 under the name Bter.com by CEO Lin Han. It suffered a hack in 2015, which resulted in loss of some 7,000 bitcoin from its cold wallets.

Following the Chinese central bank’s ban on initial coin offerings (ICOs) and fiat-to-crypto spot trading in 2017, Bter.com closed its domain, rebranded to Gate.io and dropped fiat trading. The exchange shifted its focus to crypto-to-crypto and Chinese yuan over-the-counter (OTC) trading.

IEO bandwagon

Issuing an exchange token with a trading fee point system rather than a conventional ICO is not unprecedented, as Huobi also issued its Huobi Tokens (HT) in a similar fashion in early 2017. Binance, on the other hand, sold its exchange tokens BNB through a traditional ICO while BNB can also be used to offset trading fees.

But Gate.io’s plan comes at a time when exchange tokens are seeing notable growth in the crypto markets partially due to the emergence of initial exchange offerings (IEOs), which have gained traction on major platforms such as Binance and Huobi.

In fact, Tatibouet said Gate.io will announce a plan on Wednesday to launch its own IEO platform, similar to Binance’s LaunchPad.

She further claimed that on April 8, the day the Gate Points sales began, about $155 million worth of tethers were deposited to the platform’s USDT wallets overall.

Weirong Chen, an analyst from Beijing-based blockchain data analytics startup TokenInsight, said the recent price surge of exchange tokens has bolstered retail traders’ enthusiasm for the area.

She told CoinDesk:

“The demand is indeed correlated with the overall market condition, when exchange tokens have jumped by 150 percent in Q1. Thus retail investors’ anticipation for these tokens to yield a high rate of return is still positive.”

Such interest appears to have also caused an influx of USDT to Gate.io from rival exchanges such as OKEx and Huobi. The resulting scarcity of tethers on those exchanges drove up the stablecoin’s price to an average 3 percent premium over par value when Gate’s sale began.

For instance, for 1 USDT, the bid and ask orders among OKEx’s OTC market makers on April 8 centered around 6.95 Chinese yuan, or $1.03, while some even posted ask prices as high as $1.14 per coin.

Yet Chen said multiple reasons led to the price premium for USDT among Chinese traders, including the demand for Gate’s exchange tokens with a high expectation of return, but also bitcoin’s bull run on April 2.

Tradable promises

But, despite such seemingly high buying interest, it’s important to note that for the time being GT is at best a tradable sign or liability.

Because unlike Huobi’s HT or Binance’s BNB, which were issued as ERC-20 based tokens on the ethereum network at the time when they were sold, GT is not yet issued on any public blockchain with a verifiable contract address.

Based on Gate.io’s announcement, the exchange plans to issue a total of 1 billion GTs, 50 percent of which would be reserved and locked up for a year for research and development as well as marketing efforts.

Another 300 million would be allocated to users who subscribe to the exchange’s trading points, half of which were distributed last week.

Gate.io said trading of GT will be enabled at the end of April but deposit and withdrawal won’t be available until the launch of Gatechain.

As such, Tatibouet acknowledged that for the time being, there are no other ways to track and verify the movements of any GTs, including those that are said to be locked up.

“There will be proof on how this is issued, since not every technical detail has been worked out now,” she said.

Meantime, Gate.io has started the second phase of the Gate Point sales lasting for a week for users who have been on the platform for over a certain period of time. The exchange aims to raise another $23 million in prepaid trading fees this week.

“The trading of GT [for now] will be more like trading credit points that’s entirely closed,” Chen of TokenInsight said, concluding:

“Indeed, investors can’t see how much is really being issued or how much is circulating at the moment that’s one risk factor.”

Bitcoin and US dollar image via Shutterstock

Another major crypto exchange is delisting bitcoin SV (BSV) amid an ongoing feud between that cryptocurrency’s creator Craig Wright and outspoken members of the bitcoin community.

San Francisco-based Kraken announced Tuesday that it will no longer support BSV, citing both community sentiment and ongoing litigation filed against the exchange by the coin’s advocates.

Kraken will disable BSV deposits on April 22, trading will cease on all trading pairs April 29 and, finally, withdrawals will stop May 31.

The move follows announcements Monday by two other prominent exchanges, Binance and ShapeShift, that they were delisting BSV in response to Wright’s behavior. Binance’s CEO, Changpeng Zhao (CZ), tweeted that Wright is “poisoning” the bitcoin community with his threats to sue people who called him a fraud because he has claimed to be bitcoin’s pseudonymous creator, Satoshi Nakamoto.

But Kraken was already negatively disposed toward BSV long before the kerfuffle started.

In December, during the contentious hard fork of bitcoin cash when it got split into bitcoin cash ABC and bitcoin cash “Satoshi Vision,” Florida-based mining firm United Investment Corp. filed a federal lawsuit against a group of defendants for supporting the ABC version, including Kraken and its CEO Jesse Powell. Kraken enabled BSV trading in November.

“They are suing us, our investors, well-respected and prominent figures in the community, and the community got to the point it’s fed up with it,” Powell told CoinDesk. “It’s completely antithetical to what this community is about.”

Community sentiment

On Monday, Kraken launched a poll on its Twitter account, asking people to vote for or against delisting BSV. At the moment of writing, the poll shows that around 70,545 users voted, 71 percent supporting delisting, seven percent opposing and 21 percent not caring.

“We at Kraken have our own strong opinions, and it’s like a bubble, so putting out a poll was the opportunity to get other people’s opinions,” Powell explained.

If the vast majority of the votes had been in favour of keeping BSV at Kraken, it wouldn’t have been delisted, but if the results were indecisive, say 50/50, the coin would still have been delisted, Powell said.

In the past Kraken has delisted other tokens, including Namecoin and Iconomi the former because of its low volume and the need to support a technically onerous upgrade at some point, the latter because the protocol was changed by its creators.

The feud

The delisting wave started after Wright threatened to sue a pseudonymous Twitter user nicknamed Hodlonaut, known for starting the bitcoin Lightning Torch, and crypto investor and podcaster Peter McCormack, unless they publicly recognised Wright as bitcoin’s pseudonymous creator Nakamoto.

“It looks they keep to use the law system to abuse it, suing anyone who says anything against them,” Powell said about BSV advocates.

Aside from ShapeShift and Binance, the crypto apps Blockchain, SatoWallet, Phantasma Chain and Bittylicious announced Monday they, too, would stop supporting BSV.

Powell said more exchanges may follow suit.

“The more players delist them, the easier it becomes to do it,” he said.

BSV camp responds

Reached late Tuesday, Ed Pownall, a public relations specialist who represents Calvin Ayre, owner and founder of CoinGeek.com and one of Bitcoin SV’s biggest supporters, referred CoinDesk to a newsletter article by Toronto-based investment firm Frnt.io.

“We believe that crypto and certain actors specifically are setting a dangerous precedent in the delisting of BSV,” the article said, explaining:

“Given the impact that trading venues can have on the visibility and price of a coin, such a subjective delisting sets a precedent which has the potential to increase the space’s vulnerability to manipulation. If a coin can be delisted due to some[one] not approving of a community/person’s legal activities, what’s to say that a similar narrative cannot be created in the future simply to support a malicious actor’s monetary interest.”

Later, Pownall sent a statement from Ayre, who called the delistings “a case of people in trusted positions abusing that trust and playing God with which token gets the most volume and market access. In essence, market manipulation.”

Ayre added that the exchanges seemed to be making decisions simply because “they don’t like one scientist that works on the platform. Craig doesn’t own BSV, not does anybody, so this appears to be very unprofessional. An exchange should just want volume of trading, not picking which horses it wants to win the race.”

UPDATE (April 17 13:45 UTC): This article has been updated to include additional responses from bitcoin SV advocates.

Image of Jesse Powell via CoinDesk archives

There’s a legal conflict brewing between outspoken members of the bitcoin community and the controversial computer scientist who claims to be the cryptocurrency’s creator.

It’s a complex story to untangle, but it boils down to Australian computer scientist Craig S. Wright who has claimed to be bitcoin’s pseudonymous creator since 2016 sending out legal letters to those community members that have called him a “fraud.”

While several news reports, as early as late 2015, identified Wright as Satoshi, and the lead maintainer of bitcoin at the time Gavin Andresen even lent his credence to the unmasking, security experts rebuked the claim, leaving many in the cryptocurrency community unconvinced. Yet, Wright has continued stating that he is Satoshi and those that believe that to be a false claim have continued to call Wright a liar.

The latest mudslinging came after “Hodlonaut,” the pseudonymous bitcoin user that created the lightning torch experiment, which promoted bitcoin’s layer-two scaling tech for payments, used his newfound influence to castigate Wright earlier this month.

Sometime after the public tweets, Wright sent a letter to Hodlonaut arguing that those calling him a “fraud” are libelous and damaging his reputation warranting legal action.

Yet, the legal threat against Hodlonaut hasn’t worked the way Wright probably wanted with users worried about expensive and timely court cases and so hesitant to post negatively about him.

Instead, though, the threat triggered a wave of community support for Hodlonaut, with many others jumping in to call Wright a fraud.

Bitcoin podcaster Peter McCormack also pointed fingers at Wright and received a legal letter, asking him to apologise publicly and delete any incendiary tweets or face legal repercussions. On Sunday, McCormack published a three-page, tongue-in-cheek response saying that he would not apologise, would fight Wright in court and again arguing that Wright “is definitely not the person behind the pseudonym Satoshi Nakamoto.”

To lend support to his argument, McCormack argued anyone can claim to be Satoshi.

“‘Hey, I Peter McCormack am Satoshi Nakamoto. I created Bitcoin,’ See, I just did it,” McCormack wrote.

A legal letter was also sent to Adam Back, CEO of Blockstream, according to a tweet by the firm’s CSO, Samson Mow.

What’s more, exchanges in the ecosystem seem to be lining up in support of Hodlonaut as well. Binance CEO Changpeng Zhao (CZ) also called Wright a “fraud,” and soon after, announced the exchange would delist bitcoin SV (Satoshi’s vision), the cryptocurrency that Wright supports and which broke off from bitcoin cash late last year after yet another feud involving Wright.

Exchange service provider Shapeshift is planning to do the same, and Kraken launched a Twitter poll Monday seeking input on a possible delisting.

So who is Craig Wright?

Wright first came to fame in December 2015, when publications Gizmodo and Wired published investigative articles detailing how he might be the force behind bitcoin’s creation (in the case of Gizmodo, the late Dave Kleiman was identified as a possible collaborator). Those articles were, at the time, the latest effort by the media to identify Satoshi Nakamoto, who disappeared from the scene in late 2010.

Months later, a series of new articles published by the BBC, GQ and the Economist profiled Wright and his efforts to prove that he was, in fact, the creator of bitcoin. Wright also published a blog post that notably featured a digital signature tied to the ninth bitcoin block.

Yet this effort was rebuffed by a wave of security and cryptography experts, and Wright was labeled a fraud by many in the bitcoin community.

More recently, Wright became involved in the development of bitcoin cash, which was forked away from the main bitcoin blockchain in 2017. Yet subsequent arguments over changes to bitcoin cash’s code led to plans for bitcoin SV (or Satoshi’s Vision), setting the stage for last fall’s fork.

Ethereum creator Vitalik Buterin called him a fraud publicly at a conference last year.

More recently, Wright has issued legal threats to developers of bitcoin cash.

Why is Wright issuing legal letters?

Wright and businessperson Calvin Ayre, who has been working with Wright on bitcoin SV, have sent legal letters to a handful of people, including ethereum creator Vitalik Buterin and cryptocurrency blog Chepicap, for alleged defamation.

Thus far, McCormack is the only recipient to reveal the contents of his letter to the public. The letter was issued in response to a series of tweets from McCormack that criticised Wright, including one calling him a “fraud” and another calling him a “sociopath.”

The letter from the law firm SCA Ontier to McCormack states: “You have… carried out a target campaign on Twitter to harass and libel our client by posting highly defamatory and abusive tweets, knowing they would be read not just by your 52,000 followers, but also by our client.”

It continues:

“The above publications have caused serious harm to our client’s reputation in this jurisdiction and continue [sic] to do so.”

The letter goes on to ask McCormack to delete the tweets deemed defamatory and to issue an apology to Wright.

Okay, but why are people changing their Twitter photos to astronaut cats?

Much of the public outcry against the brewing legal spat has taken place on Twitter, with the contours of the fight being sketched out by supporters of people like Hodlonaut and McCormack and those who are defending Wright and bitcoin SV generally.

A key sign of the battle-lines: a wave of bitcoin enthusiasts have changed their Twitter profile photos to Hodlonaut’s picture, which features a grey cat in an astronaut suit.

Going further, some supporters have set up and crowdsourced a legal fund for him, dubbed We Are All Hodlonaut, which raised $20,000 in under 24 hours. As of the time of writing, the fund has amassed in excess of that original goal $28,000 from more than 1,000 supporters, and according to Lightning Labs CEO Elisabeth Stark, most of the contributions came from lightning payments.

What’s more, Preston Byrne, an influential lawyer in the cryptocurrency space, tweeted that he is “assisting Hodlonaut pro bono.”

Have the legal letters stymied criticism of Wright?

Essentially, no. Despite the legal letters, influential people in the community continue to tweet negatively about him and the Nakamoto claim.

For instance, developer Jonathan Toomin tweeted in parody:

“I am God. If anyone publicly refutes this assertion, I will sue you for defamation. You will then need to prove in court that I am not God, which you will be unable to do.”

Chaincode bitcoin developer Matt Corallo stepped in on Twitter to say: “Dunno how British libel suits work,” but if it helps, he offered to fly to the UK to provide “expert witness” and to state “unequivocally, under oath, that Craig is a fraud.”

At the same time, others in the space want all the drama to die down, arguing that Wright should be ignored.

As Bitcoin Core maintainer Jonas Schnelli tweeted:

“He seeks attention with insane methods. Ignore. Ignore. Ignore his lawsuit. Don’t make him feel important. He is a psychopath.”

Hodlonaut profile picture via Twitter (Created by CryptoScamHub)

Big Four professional services firm EY is rolling out free software designed to help corporate clients use the ethereum blockchain and it’s taken an unusual step to encourage adoption.

Announced Tuesday, EY’s protocol, internally code-named Nightfall, has been developed over the last year by the consulting firm’s team of over 200 blockchain developers and will be published in May. The protocol was created for such use cases as supply chains, food tracing, transactions between branches of a company and public finance.

Like other enterprise blockchain platforms, Nightfall takes advantage of a technology called zero-knowledge proofs to allow private transactions on a shared ledger. But unlike most such endeavors, EY’s software is intended to run on top of the public ethereum network, not a private variant.

Further setting the project apart is the unusual approach EY is taking to intellectual property. The firm said it will not merely open-source the code that is, release it with a permissive copyright license but put it in the public domain, with no license at all.

“We want to maximise adoption and community involvement, we want people to adopt it, and adapt it, and improve it. If we retain ownership, people may not invest that much time and energy in something they might not control,” EY’s global innovation leader for blockchain, Paul Brody, explained at a press briefing. “The cleanest way to make everybody use it is just to give it away with no strings attached.”

Nevertheless, Brody suggested this was a difficult decision, telling reporters:

“A year of coding work. This is a million dollars worth of stuff we’re giving away.”

A fine distinction

Stepping back, “open source” and “public domain” are not synonymous.

“The terms are often used interchangeably. Legally, however, they mean different things,” said Preston Byrne, a partner at the law firm of Byrne & Storm.

Open-source, while it allows software to be used without paying royalties, means the author retains copyright and can, in theory, revoke or change the license, although “I haven’t seen this happen in crypto even once, given that the ability to inspect the code and play around with it is a key selling proposition for protocol adoption,” Byrne said.

Public domain, on the other hand, involves a waiver of copyright. This is rarer in software, Byrne said, since “it doesn’t provide a clear licensing framework for later contributions to the codebase,” creating the potential for disputes if, say, copyrighted code is added to a copyright-waived codebase.

But if a company “simply wants to give away its work, without more, there isn’t a tonne of risk in releasing to the public domain,” he said.

SAP, Microsoft, Carrefour

According to Brody, EY’s solutions for Nightfall will run in the Microsoft Azure cloud environment and are integrated with enterprise software from SAP, to give clients “a comfort that this is not new and scary. This is a mature technology backed by the world’s leading technology companies.”

One of the solutions already in testing is a system for tracking software license transactions for Microsoft’s XBox video games platform, EY said. Using the solution, Microsoft can monitor its interactions with multiple game vendors and avoid litigation related to royalty payments.

Other important partners include European grocery chain Carrefour, which is using EY’s blockchain solution to trace oranges, eggs, and chickens (it’s also a participant in IBM’s Food Trust blockchain); pharmaceutical producer Merck; Italian winery Placido Volpone; and an “Italian buffalo mozzarella maker” and “a big Japanese car maker,” Brody said.

“People are very undisciplined in the supply chain industry,” he said, explaining blockchain’s appeal in this area. “The beauty of non-double spending on the blockchain is that if a vaccine from a distribution centre goes to a farm, it has to come out of a distribution centre.”

Tokenise this

One of the most important principles EY is advocating with Nightfall is that an enterprise blockchain should deal not with hashes of digitised PDF documents, but with tokens bound to physical goods.

In pursuing this, EY took advantage of the ERC-721 standard for non-fungible tokens (NFTs) on ethereum, the most famous example of which is the collectibles known as CryptoKitties. (EY’s advisers included William Entriken, the main author of the standard, and the cryptography scholar Mary Maller, one of the leading researchers of zero-knowledge proofs.)

“We have made a big investment in the token technology,” Brody said. “We built a special kind of token, which is ERC 721-compatible, to separate a physical asset from the legal ownership of that asset.” For example, while a car is on a ship on its way to a buyer, the shipping company doesn’t own that car.

Further down that road, Brody said, it will be possible to distinguish and tokenise different components of traded goods. “We can envision a future where a power company owns a battery in your car and you can use it whenever you plug it in.”

Into the great wide open

For more than a year, Brody has been evangelising the benefits of public blockchains for enterprises, which made EY stand out among an enterprise crowd more favourably disposed to private or permissioned ledgers.

“Imagine every car maker and any shipment company runs their own private blockchain. A bunch of silos doesn’t scale too well,” Brody said. “While private blockchains are useful, they don’t solve the problem of a massive, scalable transformation.”

Just as enterprises grew comfortable using public cloud storage, they will also come to embrace public blockchains, Brody believes. And the blockchain they choose, in EY’s vision, will most likely be ethereum.

The reason is the vast majority of the money raised in the space has been for companies that built on ethereum, and the vast majority of blockchain developers code on Solidity, the smart contract language written for ethereum.

“That’s a kind of developer momentum that makes me believe that, imperfect or not, unless they really screw up, ethereum is the choice,” Brody said.

Marc Hochstein contributed reporting.

Image of Paul Brody by Marc Hochstein for CoinDesk

Enterprise blockchain firm Digital Asset is integrating its smart contract modelling language into the Hyperledger Sawtooth framework.

Announced Tuesday, this is the first melding of code between a project under the umbrella of the 200-member Hyperledger consortium and DA’s Digital Asset Modelling Language (DAML), opening up the latter to a wider range of industries and prospective enterprise customers.

The news also marks the third DA partnership since DAML became open source earlier this month. Last week, DA announced the language would be integrated into the blockchain platform of Dell Computer-controlled software giant VMware, as well as highlighting work being done with the International Swaps and Derivatives Association (ISDA) to bring DA software within the ambit of ISDA’s Common Domain Model (CDM).

Dan O’Prey, CMO at Digital Asset, who is also chair of the Hyperledger marketing committee, said there are several reasons DA chose Sawtooth (contributed to Hyperledger by Intel) as the first point of integration for DAML.

O’Prey told CoinDesk:

“Sawtooth has been getting a lot of traction in markets outside of what has initially been our core focus: financial services and particularly market infrastructures. So this is a great way for us to expand the reach of DAML into other industries.”

Indeed, Sawtooth is the locus of interesting projects such as Grid, announced last year, a supply chain-focused effort being driven by food giant Cargill. More broadly, Sawtooth is the second-largest blockchain within Hyperledger in terms of developer firepower and enterprise backing, after Fabric, developed by IBM.

Another key reason is that DA has been working closely with Blockchain Technology Partners (BTP), which offers developers an easy-to-deploy and cloud-ready instance of Sawtooth via its blockchain management platform, Sextant.

In July of this year, BTP will offer an enhanced version of Sextant with DAML support on Amazon Web Services (AWS), with other cloud providers soon thereafter, noted O’Prey.

‘Far and wide’

While Sawtooth is first for DAML, O’Prey said his firm is “having conversations with various others within the Hyperledger framework and other platform providers.”

An obvious next step would be tying up with Hyperledger Fabric and its main platform partner, IBM.

“Our goal is to get DAML as far and as wide as possible and obviously Hyperledger Fabric has a very large user base and community of developers around it. So certainly this is high up on the list of where we would like to see support for DAML,” said O’Prey.

Dan Middleton, chair of Hyperledger’s technical steering committee (TSC) and a Sawtooth maintainer, said the DAML integration shows the importance of “modular architectures that allow for multiple projects to work together,” a key vision for Hyperledger and a design tenet of Sawtooth.

Anticipating more in the way of integration partnerships in the coming weeks, DA has added a special “DAML Integration Kit” into its open source software development kit (SDK) to make it as smooth as possible to bring DAML’s smart contract “rule engine” into other platforms.

As such, smart contracts can be developed using traditional programming languages such as C++ or JavaScript; DAML is only for the smart contracts themselves, not the whole application that runs on the ledger, explained, O’Prey, adding:

“Our goal is to make it as self-service and easy as possible so that anyone can integrate DAML into whatever DLT platform, blockchain platform, database, cloud service or even public chain in the future.”

One of the most prominent players in the enterprise blockchain niche, DA is in the process of replacing the Australian Securities Exchange’s decades-old Clearing House Electronic Subregister System (CHESS) a multi-year assignment it won under former CEO Blythe Masters. Co-founder Yuval Rooz succeeded her last month.

Computer code image via Shutterstock

https://www.coindesk.com/binances-singapore-fiat-to-bitcoin-exchange-is-launching-next-week

 


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