SEC Hits Floyd Mayweather and DJ Khaled With Fines forUnlawful ICO Promotion

SEC Hits Floyd Mayweather and DJ Khaled With Fines for Unlawful ICO Promotion

Regulation

The U.S. Securities and Exchange Commission has hit two celebrities with record fines for shilling initial coin offerings (ICOs). Boxer Floyd Mayweather Jr. and music producer DJ Khaled were taken to task for failing to disclose payments they received for touting the projects. The case marks the first time the SEC has taken against celebs for ICO promotion.

Also read: Deutsche Bank Headquarters Raided by 170 Police Officers Over Money Laundering

Centra ICO Censured Again by SEC

The SEC has settled charges with Mayweather and Khaled for ICO violations pertaining to Centra. The agency had previously charged the project’s founders over matters relating to securities fraud. Its latest settlement is the first time the SEC has gone after celebrity promoters of cryptocurrency projects however.

“Without admitting or denying the findings,” explained the press release issued on Nov. 30, “Mayweather and Khaled agreed to pay disgorgement, penalties and interest. Mayweather agreed to pay $300,000 in disgorgement, a $300,000 penalty, and $14,775 in prejudgment interest. Khaled agreed to pay $50,000 in disgorgement, a $100,000 penalty, and $2,725 in prejudgment interest.”

Paying Penance for the Excess of 2017

SEC Hits Floyd Mayweather and DJ Khaled With Fines for Unlawful ICO Promotion
Floyd Mayweather posing with his Centra card

In the halcyon days of summer 2017, everyone seemed to be launching ICOs, buying into ICOs, and shilling ICOs. In the cold light of 2018, however, many of those projects have failed, a handful have been prosecuted, and an unknown number are believed to be under investigation for securities violations. Tweets such as “You can call me Floyd Crypto Mayweather from now on” and Khaled’s “Game changer” description of Centra after receiving a $50,000 payment from the project have come back to haunt the pair.

“These cases highlight the importance of full disclosure to investors,” said Stephanie Avakian of the SEC’s Enforcement Division. “With no disclosure about the payments, Mayweather and Khaled’s ICO promotions may have appeared to be unbiased, rather than paid endorsements.” While ICOs have not died, despite the prolonged bear market and spate of SEC enforcements, the era of celebrity endorsements is effectively now over.

Do you think this action by the SEC will put an end to celebrity ICO endorsements? Let us know in the comments section below.


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SEC Chair Explains Key Upgrades Needed for Bitcoin ETFApproval

SEC Chair Explains Key Upgrades Needed for Bitcoin ETF Approval

Regulation

The chairman of the U.S. Securities and Exchange Commission (SEC) has outlined the key changes in cryptocurrency markets he needs to see before he is comfortable with a bitcoin ETF. While some solutions to the problems he mentioned have already been implemented, the chairman insists on seeing more improvements.

Also read: Indian Supreme Court Moves Crypto Hearing, Community Calls for Positive Regulations

Key Upgrades Needed

SEC Chair Explains Key Upgrades Needed for Bitcoin ETF Approval
Jay Clayton

At the Consensus Invest conference on Tuesday, SEC Chairman Jay Clayton explained what he needs to see before the SEC can consider approving its first bitcoin exchange-traded fund (ETF).

According to Cnbc, Clayton said he “needs to see key upgrades in cryptocurrency markets before approving a bitcoin ETF.” Specifically, the SEC chair “wants to see better market surveillance and custody for cryptocurrencies before being ‘comfortable’ with a bitcoin ETF,” the news outlet added.

Better Market Surveillance

SEC Chair Explains Key Upgrades Needed for Bitcoin ETF ApprovalThe first issue Clayton noted was the lack of market surveillance at crypto exchanges. Market surveillance involves the use of systems that “monitor, prevent and investigate abusive and manipulative activity on the exchanges,” the publication described.

The chairman explained that stock exchanges such as the New York Stock Exchange and the Nasdaq already have these monitoring tools in place. However, “Those kinds of safeguards do not exist currently in all of the exchange venues where digital currencies trade,” he affirmed, asserting:

What investors expect is that trading in the commodity that underlies that ETF makes sense and is free from the risk of manipulation … It’s an issue that needs to be addressed before I would be comfortable.

SEC Chair Explains Key Upgrades Needed for Bitcoin ETF ApprovalNot all crypto exchanges lack market surveillance, however. In April, Nasdaq announced that crypto exchange Gemini “will be leveraging Nasdaq’s Smarts Market Surveillance technology to monitor its marketplace.” Nasdaq claims that its technology “is considered the most widely deployed surveillance system in the world.”

This agreement followed the SEC’s rejection of the rule change proposed by Bats BZX to list and trade Coin ETF. The commission cited Bats BZX’s lack of “surveillance-sharing agreements with significant markets for trading” bitcoin or its derivatives as one of the reasons.

On Tuesday, Europe’s largest crypto exchange by trading volume, Bitstamp, announced that it is implementing a monitoring platform provided by market surveillance provider Irisium.

Inadequate Custody

Clayton is also concerned with how safely crypto assets are stored, emphasizing that investors could be exposed to a risk of theft in ETFs’ underlying assets. A number of custody solutions have been explored by companies such as Fidelity Investments, Coinbase, GeminiBitgo, Itbit, Japanese bank Nomura, Goldman Sachs, Northern Trust and South Korea’s Shinhan bank.

Nonetheless, the publication quoted Clayton as saying that custody solutions still “need to be improved and hardened.” The chairman elaborated:

We’ve seen some thefts around digital assets that make you scratch your head … We care that the assets underlying that ETF have good custody and that they’re not going to disappear.

What do you think of the SEC chairman’s stance toward bitcoin ETFs? Let us know in the comments section below.


Images courtesy of Shutterstock and the SEC.


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Copay and Bitpay Wallet Apps Were Infected With MaliciousCode

Copay and Bitpay Wallet Apps Were Infected With Malicious Code

Wallets

A developer has injected a piece of malicious code into the software used by the popular Copay and Bitpay wallets. The safety of the Bitcoin.com wallet was not compromised and the Bitpay app was not vulnerable to the attack, but Copay users need to take precautionary actions.

Also Read: Chinese Startup Gets Crypto Custodial Services License in Hong Kong

Someone Might Have Been Able to Steal Private Keys

Copay and Bitpay Wallet Apps Were Infected With Malicious CodeThe Bitpay team has announced that a third-party NodeJS (the open-source Java Script environment) package used by the Copay and BitPay apps had been modified to load malicious code. This could have been used to capture and steal users’ private wallet keys. The company learned about the vulnerability from a GitHub issue report about an “event-stream” dependency attack.

Bitpay has only confirmed so far that the malicious code was deployed on its Copay and Bitpay apps from version 5.0.2 to 5.1.0. However, the company has tried to reassure users by saying that the Bitpay app was not vulnerable to the malicious code. A security update (version 5.2.0) has been developed and will be made available for users in the app stores. And the team is still investigating to figure out if the malicious code was ever actually used against people.

What Copay Wallet Users Need to Do Now to Keep Safe

Copay and Bitpay Wallet Apps Were Infected With Malicious CodeThe Bitpay team warns that anyone using a Copay app from version 5.0.2 to 5.1.0 should not open it again. Users should first update their affected wallets and then send all funds from affected wallets to new version 5.2.0 wallets. Users should not attempt to move funds to new wallets by importing affected backup phrases, as they should assume that the corresponding private keys may have been compromised.

If you use the Bitcoin.com wallet you have not been affected by this issue at all, so you don’t need to do anything. “Our wallet doesn’t use the compromised ‘package,’ so we’re completely out of trouble for this one,” explains the Bitcoin.com wallet development team. “We’re operating as normal, we have never used that package and will never use it.”

Do you use an affected Copay wallet? Share your thoughts in the comments section below.


Images courtesy of Shutterstock.


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Hash Wars: Battle Comes to an End as BSV Plans to Add ReplayProtection

Hash Wars: Battle Comes to an End as BSV Plans to Add Replay Protection

News

It’s been less than two weeks since the Bitcoin Cash (BCH) hard fork and blockchain split that occurred on Nov. 15. Since then there’s been a lot of discussion concerning the hash war, with BSV and BCH miners acquiring blocks, gathering hashrate and accumulating proof of work. Now after 11 days, blockchain company Coingeek has announced that the BSV developers will apply replay protection to the BSV chain, essentially bringing the hash war to an end.

Also read: Content Creators Can Earn BCH Using the Honest Cash Platform

BSV Chain Plans to Implement Replay Protection

Bitcoin cash proponents have been watching the hash war take place between a bunch of mining pools from around the world. The hash battle has been happening since Nov. 15 and the debate between supporters of each chain has grown. Some individuals claim that the war is not over, even though lots of major exchanges have decided to list the ABC chain as Bitcoin Cash (BCH), as it’s the chain that has accumulated the most proof of work. But Craig Wright and his followers have stated multiple times in the past that the hash war would last for months, and even years, until one chain gave up.

Hash Wars: Battle Comes to an End as BSV Plans to Add Replay Protection
Calvin Ayre’s tweet after revealing that BSV developers plan to add replay protection.

Now on the 11th day of the split, Coingeek — the publication led by billionaire Calvin Ayre — has published a notice explaining that the BSV chain will add replay protection. Replay protection will allow people to send transactions on the BCH or BSV chains without worrying about transaction replays. To most BCH supporters, the hash battles have effectively become meaningless now that BSV is adding replay protection.

Hash Wars: Battle Comes to an End as BSV Plans to Add Replay Protection
BCH supporter and entrepreneur, Olivier Janssens, responds to the recent Coingeek tweet.

In an editorial published on Monday, Coingeek explained that it has consulted with the BSV development team about the reinforcement of blockchain stability measures.

“One aspect of stability is replay protection. Since ABC has not made this stability a priority, Bitcoin SV will do so in order to restore confidence to users and businesses on both chains,” Steve Shadders, technical director of the Bitcoin SV project, detailed. “This change will require the Bitcoin SV team to work with the Bitcoin ecosystem, and the timeline will be announced when there is adequate ecosystem readiness.”

Hash Wars: Battle Comes to an End as BSV Plans to Add Replay Protection
The r/btc subreddit had a lot of celebratory posts about the end of the war.

Hash War Ends but the Free Market Battle
Has Just Begun

The announcement was welcomed by the BCH community and many celebrated the end of the hash war on social media platforms such as Twitter and bitcoin-centric forums like r/btc, which has a bunch of “War is Over” posts on its front page. Lots of people have been joking around, saying things like “you split, we bankrupt you,” while other BCH proponents have wished the BSV side the best of luck going forward. But even though many are glad to see the hash war come to an end, a lot of people are more concerned about the exchanges coming back online.

Hash Wars: Battle Comes to an End as BSV Plans to Add Replay Protection
Many BCH supporters thought the idea of the hash war lasting for years was quite the ruse.

For instance, many BCH supporters celebrated the fact that Coinex reopened BCH withdrawals on Monday. Users can now finally start moving funds off the trading platform. Coinex also said that following a series of reliability tests, users can now withdraw BSV as well.

A few other exchanges have resumed BCH withdrawals, including Bitpanda, Bittrex and Kraken. Other trading platforms like Bitstamp and Coinbase Pro have allowed limited trading, but customers on these exchanges are waiting for them to re-establish withdrawals. BCH supporters are also patiently waiting for Bitpay to return, so BCH merchants that use the platform can resume operations.

Hash Wars: Battle Comes to an End as BSV Plans to Add Replay Protection
BCH supporters shared thoughts on the impact of the blockchain split on the value of BCH.

Overall, it seems most of the community can look forward to moving on from this fight and continue building on the Bitcoin Cash network. Both chains can now go their separate ways and compete for mass adoption within the world economy’s true battle arena. As most digital asset proponents understand, in the end, the real winner amongst all 2000+ cryptocurrencies will be chosen by economic participants and ultimately the free market.

What do you think about the hash wars coming to an end with the recent replay protection announcement? Let us know your thoughts on this subject in the comments section below.


Images via Shutterstock, Pixabay, and Twitter. 


At news.Bitcoin.com all comments containing links are automatically held up for moderation in the Disqus system. That means an editor has to take a look at the comment to approve it. This is due to the many, repetitive, spam and scam links people post under our articles. We do not censor any comment content based on politics or personal opinions. So, please be patient. Your comment will be published.

Markets Update: Cryptocurrencies Continue to Suffer FromDeep Losses

Markets Update: Cryptocurrencies Continue to Suffer From Deep Losses

Market Updates

It’s been a tough week for cryptocurrency holders, as the top 10 virtual currencies by market capitalization have lost 30% to 60% of their value over the past seven days. Prices this low have not been seen since the spring of 2017 and at the moment the entire economy of all 2000+ coins has a market valuation of about $128 billion.

Also read: Content Creators Can Earn BCH Using the Honest Cash Platform

Over $60B Lost During the Last 7 Days

A lot of cryptocurrency enthusiasts have been using words like “carnage,” “bloody” and “capitulation” to describe the recent cryptocurrency market downturn. The top digital asset markets show deep losses for nearly every single cryptocurrency besides stablecoins. Trade volume has increased since the slump, but only by a few billion, as global trade volume is currently hovering around $18.5 billion.

Markets Update: Cryptocurrencies Continue to Suffer From Deep Losses
The top 10 cryptocurrencies by market valuation on Nov. 25, 2018

Bitcoin core (BTC) markets dipped to a low of $3,475 yesterday on Nov. 24 but managed to rebound a hair back to the $3,817 range where it rests today. BTC’s spot value is down 11% today and 31.8% over the last seven days. Ripple (XRP) markets currently hold the second-highest valuation but markets are down 14.4% today and 32.6% since last week. One XRP is trading for $0.34 per coin and ripple’s market capitalization is $13.9 billion. Ethereum (ETH) has lost 9.9% over the last 24 hours and 37% since last week and the price per ETH today is $110. Lastly, the fifth-largest market valuation is held by eos (EOS), with the token trading for $3.24. EOS values have lost 9% in the last day and have seen losses of around 29% over the last week.

Bitcoin Cash (BCH) Market Action

Bitcoin Cash (BCH) markets have also seen better days and currently, the price is hovering around $160-195 (depending on the exchange), but reached a low on Saturday night down to $177. BCH is down 18.2% today and over the last week, has lost 56% of its market value. The cryptocurrency market dumps alongside the recent blockchain split has caused severe losses throughout bitcoin cash markets in general.

Markets Update: Cryptocurrencies Continue to Suffer From Deep Losses
BCH/USD seven-day charts

At the moment there  BCH global trade volume is 126 million and the total BCH market valuation today is hovering around $2.94 billion. The top exchanges swapping the most BCH this weekend include Lbank, Huobi, Bluebelt, Bithumb and Bittrex. Again the top currency pair with bitcoin cash today is ethereum (ETH), capturing 38.2% of today’s BCH trades. This is followed by BTC (30.9%), USDT (17.3%), KRW (12%), and USD (0.4%). The Korean won has made a noticeable increase throughout BCH trade volume over the last two weeks.

Markets Update: Cryptocurrencies Continue to Suffer From Deep Losses
Bitstamp 4-hour BCH/USD on Nov. 25, 2018.

BCH/USD Technical Indicators

The four-hour BCH/USD charts on Bitstamp and Bittrex show bears have managed to make it quite difficult for bulls to gain momentum. The two Simple Moving Averages (SMA) show the long-term 200 SMA is still well above the short-term 100 SMA. This indicates the path toward the least resistance for BCH traders is still the downside. BCH/USD has been clinging to long-term support for over the last seven days and oscillators like the Relative Strength Index and Stochastic have seen extreme oversold conditions twice this past week.

Markets Update: Cryptocurrencies Continue to Suffer From Deep Losses
Bitstamp four-hour BCH/USD on Nov. 25, 2018

Currently, four-hour RSI levels are meandering in the middle (-46.8)m showing some uncertainty throughout the ranks of traders wondering what will take place next. Order books show on the upside that bulls need to move past the current vantage point and the $220 price region in order to face smoother seas. Further, at the time of publication, the MACd shows things might be heading northbound for a short period of time and there’s plenty of room for improvement. On the backside, things look a bit dreary as there are solid foundations between now and $145, but after that things begin looking slimmer.

The Verdict: Traders Evaluate a Range of Price Forecasts

Most traders have been very curious about the next big move for cryptocurrency markets and the last two dips came as a surprise for many. The entire cryptocurrency market capitalization has lost a significant amount of value, shedding $60 billion since last week. After the big dips, most traders began waiting for a strong bounce that never materialized, leaving most digital assets clinging to long-term support. Top digital assets like BCH, BTC and ETH indicate there is pretty solid support at the current vantage point on the weekly’s EMA200 and a bearish-to-bullish trend reversal could take place in a matter of days. Some traders are betting a reversal is coming, but others anticipate more losses. Most traders this weekend are playing positions like a game of musical chairs and hoping their predictions will be correct.

Do you think cryptocurrency market prices will recover any time soon? Let us know in the comments section below.

Disclaimer: Price articles and markets updates are intended for informational purposes only and should not to be considered as trading advice. Neither Bitcoin.com nor the author is responsible for any losses or gains, as the ultimate decision to conduct a trade is made by the reader. Always remember that only those in possession of the private keys are in control of the “money.”


Images via Shutterstock, Trading View, and Satoshi Pulse.


At news.Bitcoin.com all comments containing links are automatically held up for moderation in the Disqus system. That means an editor has to take a look at the comment to approve it. This is due to the many, repetitive, spam and scam links people post under our articles. We do not censor any comment content based on politics or personal opinions. So, please be patient. Your comment will be published.

Wendy McElroy: How the Blockchain Provides PrivateJustice

Wendy McElroy: How the Blockchain Provides Private Justice

News

The Satoshi Revolution: A Revolution of Rising Expectations
Section 5: Saving the World Through Anarchism
Chapter 11, Part 6
How the Blockchain Provides Private Justice

The key to…an anarcho-capitalist court system is found in the concept of a “personal judiciary”. [Acting as your own judge.]…The courts’ purpose is to enable men to settle disputes so as to avoid violent resolution as well as aggression-overcompensation cycles. Regarding the courts’ decisions as legitimate is the only way for the litigants to avoid personal judiciary actions.

– Karl T. Fielding, “The Role of Personal Justice in Anarcho-Capitalism”

Justice is a stumbling block for all political systems. It is a particular problem for anarchism because its conception of justice sounds bizarre to many; anarchism uniquely argues that justice should be a commodity or service provided through the free market, rather like insurance. The view of justice also sounds contradictory to some; how can a society based entirely on voluntary exchange deal with crimes such as theft that might require seizing stolen goods and holding criminals against their will?

The latter objection was ably dismissed by Murray Rothbard during a remarkable debate on anarchist justice with Professor of Philosophy John Hospers. Rothbard wrote, “I see no reason whatever why anyone should worry about the consent of criminals to their just punishment. I believe that nothing should be done to anyone without his consent, except for the just punishment of criminals who have already violated the “consent,” the person or property, of their victims.”

The main point becomes whether or not the free market can deliver justice. And the first question to arise on this topic is usually, “What would free-market justice look like?” The unsatisfying answer is that no one knows for sure, any more than people from decades ago knew that communication would look like the Internet or transactions like the blockchain. (More on this later.)

Meanwhile, the principles upon which private justice is based can and must be defined with clarity.


John Locke’s “TINA” Argument


The classical-liberal philosopher John Locke used a “There Is No Alternative” argument in his book Second Treatise of Government. It is a type of either/or reasoning in which disproving the “either” (anarchism) means validating the “or” (the state).

In this article’s opening quote, Karl Fielding used the term “personal judiciary.” The term is based on a political argument presented by Locke, and it refers to the idea that a man has a natural right to be the judge of his own case. Every man has the right to forcefully reclaim his property from a thief, for example, because this is an extension of his right to defend person and property.

Locke acknowledged this right, but he was against practicing it. He wrote, “That in the state of nature every one has the executive power of the law of nature, I doubt not, but it will be objected, that it is unreasonable for men to be judges in their own cases, that self-love will make men partial to themselves and their friends: and on the other side, that ill-nature, passion and revenge will carry them too far in punishing others; and hence nothing but confusion and disorder will follow.”

“The state of nature” refers to human existence without “society,” in the modern sense of that word. In a state of nature, Locke believed all men were equal with the same natural right to judge their own cases. Again, if a possession had been stolen, then the owner could judge the act to be unfair and personally remedy the injury; he could retrieve his property, including whatever compensation he deemed was due. In short, private justice is a matter of right.

Locke believed a private judiciary process would tend sharply toward unfairness, however, because even an honest man sees things from his own perspective and self-interest. Even a well-meaning man could be mistaken about the facts, including the aggressor’s identity. This means a world occupied by people who judged their own cases would lead to discord, especially if the aggressor himself felt aggrieved. An aggressor might think the violence used in retrieving the possession was excessive, for example, or that the compensation added was unreasonable. At that point, the aggressor would judge his own case and find himself to be the victim; he might well seek redress or revenge. Or a falsely-accused non-aggressor might decide to rectify the wrong done to him. The process could easily become an endless loop of violence because the justice was not accepted as legitimate by both parties.

Locke believed that breaking the cycle of “confusion and disorder” required an unbiased judge whose assessment would be seen as legitimate by both sides. Put in crypto terms: decentralized justice needed to be centralized under the authority of a trusted third party. The stakes were non-trivial. Without a trusted third party to judge cases and render legitimate decisions, civil society was not possible.

The need for legitimacy in justice was a major reason—if not the major reason– Locke advocated a limited state. For centuries, this has been a mainstay argument against anarchism and freedom. And the either/or argument is correct, in this case. It is either freedom or it is the state, with justice being a pivot point between the two. (A form of this argument is playing out within the crypto community; it is either anarchism or the state, with recourse against theft and fraud being the pivot point.) Otherwise stated: If individuals cannot render justice, then the state becomes necessary, even for those who view the state as a necessary evil and try to constrain it through checks and balances.

What does this have to do with the blockchain? With the blockchain, the centralization of justice is reversed immediately; control is taken from the state and returned to the individual, without blood or votes or revolution. But if Locke is correct about justice requiring a trusted third party, then the state’s monopoly over justice is likely to establish itself again. What can transparent ledgers do to prevent this?

A definition of justice is a place to start answering. Justice is far too closely associated with police officers, lawyers, courts, and prisons. Such state employees are not justice; they are the ones who come into play when justice breaks down; they are there to protect the state, not individuals or the peace. The state so dominates this area, however, that administrative justice is the first definition that comes to people’s minds.

Ethical justice applies to the conduct of civil and private life. The Aristotelian definition appeals to common sense: everyone should receive what they deserve from each other. Few things are as just as the free market in which two people make a direct exchange for agreed-upon values, and then walk away. A woman who goes shopping, buys a tomato, and goes home is enjoying justice. It may seem as though she is merely enjoying daily life, because that statement is also true. In normal life, the free market generally provides people with what they deserve, even if it is not what they want.

The tricky bit is what to do when the justice of normal life breaks down—a situation that is otherwise known as violence. Eliminating the most pervasive form of violence—the state—would also eliminate most injustice. But a stateless society would experience private violence against person or property.

Two approaches to minimizing private violence and its damage are prevention and punishment. Prevention is the best approach, by far, for a free society. It preserves person and property; it avoids the unpleasant process of correcting an injustice; it greatly reduces the need for procedures or institutions to correct injustice; it does not create an entry point for the state.

The blockchain does not merely promote freedom, it also prevents theft by both the state and by private individuals. A peer-to-peer transfer avoids the trusted third party participation where so much theft occurs; privately-held wallets eschew the need to trust banks, exchanges, or other third parties. The blockchain’s transparency makes it possible to view where every piece of crypto goes. The irreversibly and time-stamping of the transfer were included specifically to prevent theft. The anonymity that is possible with a bit of effort provides protection as well.

The protection of crypto and the blockchain breaks down most dramatically when trusted third parties are once again introduced into the equation. Many of the problems that the blockchain cured return with trusted third party involvement. The greatest theft has occurred in exchanges, for example. With unethical exchanges or centralized ones that function like banks, the user’s trust has been misplaced, and the exchanges become thieves. The ethical but incompetent ones serve as an invitation to hackers, and the user’s trust has again been misplaced. Ones that are both ethical and competent are still risks because they are public; they are like well-locked houses that get burglarized, nevertheless.

Guidelines are available for using exchange in as a safe a manner as possible. Choose a decentralized one, for example, and never surrender private keys. But the crypto community has not adequately addressed the problems created by re-introducing trusted third parties. To my knowledge, no exchange even offers users an insurance policy or charges higher fees as a warranty against theft.

So far, only the impact of the blockchain on economic justice has been discussed, but the possibilities for all forms of justice are immense. Distributed systems can transmit peer-to-peer smart contracts that are self-enforcing. A recent U.S. Senate report stated of smart contracts, “the concept is rooted in basic contract law. Usually, the judicial system adjudicates contractual disputes and enforces terms, but it is also common to have another arbitration method, especially for international transactions. With smart contracts, a program enforces the contract built into the code.” (How smart the current contracts actually are is a debated point, but they are a proof of principle.)

The 19th century individualist-anarchist Benjamin Tucker referred to anarchism as “society by contract.” The contracts could express any exchange, from leases to prostitution, from insurance policies to drug deals. The contracts would not be legal or illegal, only consensual. Just as crypto bypasses central banking and decentralizes economic control down to the individual, smart contracts have the potential of bypassing much of the legal system and returning to the people’s law—contract law. But, like crypto, the contracts would not require a trusted third party.

[To be continued next week.]

Reprints of this article should credit bitcoin.com and include a link back to the original links to all previous chapters


Wendy McElroy has agreed to ”live-publish” her new book The Satoshi Revolution exclusively with Bitcoin.com. Every Saturday you’ll find another installment in a series of posts planned to conclude after about 18 months. Altogether they’ll make up her new book ”The Satoshi Revolution”. Read it here first.

ETH Mining Not Profitable, Miner Heats Home With ASICRigs

ETH Mining Not Profitable, Miner Heats Home With ASIC Rigs

Mining

In recent mining news, Susquehanna International Group has reported that it is no longer profitable to mine ether with a GPU. In other news, a Canadian miner has taken to Twitter to share photos of a system that recycles the heat generated by his six ASIC miners, while Jihan Wu has accused Craig Wright of attempting to conduct a 51 percent attack on the Bitcoin Cash network.

Also Read: The Daily: BTC Spot Index Launches, Futures Platform Delayed

Susquehanna Claims It’s ‘No Longer Profitable’
to Mine ETH with GPUs

Susquehanna International Group, a global trading and technology company, has announced that mining ETH with a graphics processing unit (GPU) is no longer a profitable activity. According to the company’s analysis, the dollar-denominated monthly returns from GPU mining of ETH fell to approximately zero as of Nov. 1. In a note issued to clients, Christopher Rolland — a semiconductor analyst for Susquehanna International — clearly stated that GPU ETH mining is “no longer profitable.”

ETH Mining Not Profitable, Miner Heats Home With ASIC Rigs
Source: Susquehanna

According to the company’s analysis, the profitability of GPU mining of ether peaked at around $65 per month at the start of the year, before dropping as low as $20 in April, as a result of a significant drop in the price of ETH during the first quarter. Profitability rose to roughly $30 throughout most of the second quarter, before sliding down to zero in the following months.

Canadian Miner Heats Home with Six S9 Antminers

A Canadian cryptocurrency miner has tweeted a photo of a prototype heating system designed to heat his 600-square-foot home using recycled heat generated by six ASIC miners. He claimed that the system is able to “comfortably heat” his home at his “desired temperature” and is operational year-round. The miner explained that excess heat is recirculated outside of his home and that the setup is “fully quiet.”

Wu Accuses Wright of Attempting 51% Attack

ETH Mining Not Profitable, Miner Heats Home With ASIC RigsAt the recent Nikkei/CNBC “Future of Money” conference in Tokyo, Jihan Wu — the co-founder of Bitmain — took aim at Craig Wright and proof-of-stake (PoS) mining. Discussing the recent Bitcoin Cash fork and subsequent hash war, Wu described Wright’s actions as an “attempted 51 percent attack on BCH,” adding that “no one should try and take the community by force.”

Turning to criticize PoS mining, Wu stated that it presents numerous “unsolved problems and risk factors” that have yet to be resolved.

Do you think that a bounce in price will restore the profitability of ETH GPU mining? Share your thoughts in the comments section below.


Images courtesy of Shutterstock, Susquehanna, Twitter


At Bitcoin.com there’s a bunch of free helpful services. For instance, have you seen our Tools page? You can even lookup the exchange rate for a transaction in the past. Or calculate the value of your current holdings. Or create a paper wallet. And much more.

Smart Contract Developers May Be Held Liable by the SEC

Smart Contract Developers May Be Held Liable by the SEC

Regulation

Nick Szabo invented them but has reservations about what they’ve become. Vitalik Buterin adopted them but now regrets using their name. Dangerous when coded badly, and powerful when used intelligently, smart contracts have become a critical component of the cryptoconomy. Their code serves as the bond that glues the tokenized ecosystem together. Now, just to add further complexity, the SEC has begun monitoring smart contracts and their creators closely.

Also read: The Cobo Vault Hardware Wallet Will Outlive You

Smart Contracts, Legal Liability and the SEC

Smart Contract Developers May Be Held Liable by the SECSmart contracts, explained the U.S. Securities and Exchange Commission (SEC), “provide the means for investors and market participants to find counterparties, discover prices, and trade a variety of digital asset securities.” In its Statement on Digital Asset Securities Issuance and Trading, published Nov. 16, the SEC referred to smart contracts five times, particularly in reference to Etherdelta, whose creator was prosecuted for operating an unregistered securities exchange that ran on smart contracts he’d coded. What this ruling means for developers, moving forwards, is a matter of some debate and great concern.

Code has often been likened to free speech, with advocates adamant that developers should not be held liable for how their code is used. In the case of Etherdelta, the prosecution of Zachary Coburn was relatively straightforward, since he’d personally developed the smart contracts that powered the platform. In future, however, the SEC may not make a distinction between the developer of a piece of code and the end user. If the creator of a smart contract used to facilitate decentralized trading can be identified, that individual could conceivably be held liable for securities violations. As the SEC’s report notes:

An entity that provides an algorithm, run on a computer program or on a smart contract using blockchain technology, as a means to bring together or execute orders, could be providing a trading facility. As another example, an entity that sets execution priorities, standardizes material terms for digital asset securities traded on the system, or requires orders to conform with predetermined protocols of a smart contract, could be setting rules.

More Code Brings Greater Complexity

Smart Contract Developers May Be Held Liable by the SECMorally, code is neither “good” nor “bad”; the rules governing the operation of a smart contract are simply a consequence of the behavior mandated by its creator. These rules, and their permeation into every facet of the cryptoconomy, have forced a rethink of the way cryptocurrencies and their protocols are understood. With the emergence of sidechains such as Rootstock, federated chains such as Blockstream’s Liquid Network, and cross-chain products such as WBTC, the code that controls the cryptocurrency markets is becoming ever more labyrinthine and layered.

As the cryptocurrency industry’s reliance on smart contracts increases, regulators are going to have some difficult decisions to make. Who should be held liable when an entity conducts a securities violation, for example – the trader, the operator of the decentralized platform or the developer who coded the smart contract? Even the father of smart contracts, Nick Szabo, has acknowledged that, despite being wholly digital, they are ultimately an agreement that mirrors a traditional contract, writing: “‘Smart contract’ like ‘contract’ connotes a deal between people, but a deal intermediated and incentivized by dynamic machine-interpreted rules instead of the statically recorded human-interpreted rules of a traditional contract.”

Smart Contract Developers May Be Held Liable by the SEC

For U.S.-based developers who wish to remain free to code without worrying about legal liabilities, the only solution may be to remain anonymous. This is the approach being favored by the team behind the forthcoming Grin cryptocurrency, which makes use of Mimblewimble privacy tech. It’s also the approach taken by a certain S. Nakamoto 10 years ago upon launching his cryptocurrency. The SEC can’t prosecute whom it doesn’t know.

Do you think smart contract developers should be held legally liable for their code? Let us know in the comments section below.


Images courtesy of Shutterstock.


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Hash Wars: BCH Proponents Confident a Resolution Is in Sight

Hash Wars: BCH Proponents Confident a Resolution Is in Sight

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On Saturday, Nov. 17, the Bitcoin Cash (BCH) community entered the third day of its hash war, with many supporters growing confident that a resolution may be in sight. Close to 300 blocks have been mined on the Bitcoin ABC side of the chain using the new consensus ruleset, which has also given the network the most accumulated proof of work. In addition to the hash battles of the last few days, the first major cryptocurrency exchange, Bittrex, has re-opened bitcoin cash deposits and given the ABC chain the BCH ticker.

Also Read: Free Keene Activists Launch Bitcoin Embassy New Hampshire

BSV and the Satoshi Shotgun that ‘Doesn’t Shoot Straight’

Hash Wars: BCH Proponents Confident a Resolution Is in SightIt’s been a long few days for Bitcoin Cash supporters, but the war seems to be nearing an end in the eyes of many. After the split, the ABC side of the chain remained vigilant throughout the entire process, mining more blocks but more importantly capturing more proof of work. The SV side is still moving along, but is behind the ABC chain and SV has also performed less work.

On Nov. 17, the BCH community got ready to watch the Stress Test team send large batches of transactions, but according to a few Telegram chat rooms, the Stress Test, or “Satoshi’s Shotgun,” has not been firing so well. Observers have stated that Satoshi’s Shotgun was no longer able to reach the ABC network. People assumed the stress test developers were not prepared to adapt to two different networks. During the start of the test, Bitcoin Unlimited’s Peter Rizun commented on the Stress Test matter.

“The difference in network effect stark: BSV has few users, no OSX or Windows clients, no block explorer, perhaps one mobile wallet, and a shotgun that doesn’t shoot so straight,” Rizun explained to his Twitter followers.

Many Believe the Release of Bitcoin ABC Version 0.18.4 Should Give Confidence to Exchanges

Many bitcoin cash users have been discussing the ABC network’s safety and reliability, with a number of them opining that exchanges should re-open markets. For instance, according to one of the most popular posts today on the Reddit forum r/btc, the release of Bitcoin ABC version 0.18.4 with a checkpoint and re-org protection cements the split.

Hash Wars: BCH Proponents Confident a Resolution Is in Sight

This means that miners will continue securing the ABC side and Nchain, Coingeek, and the rest of the SV miners will be left on that chain. “This means that exchanges can resume deposits, and we should urge them to, so everything can get back to normal,” the Reddit post explains. One Reddit user explained that he is confident the ABC chain is now Bitcoin Cash (BCH) due to the most accumulated proof of work (PoW).

“ABC has won decisively. I wish the exchanges would realize this,” explains the Redditor’s comment. “Before the fork, everyone said that the most proof of work chain would continue as BCH, and ABC is the chain with the most proof of work.” Moreover, the analytical website Coin Dance cash confirms that the ABC chain has the most PoW and leads by 53.4%.

Hash Wars: BCH Proponents Confident a Resolution Is in Sight

Bittrex Exchange Listing: ABC Chain = Bitcoin Cash (BCH)

Hash Wars: BCH Proponents Confident a Resolution Is in SightLastly, one of the first major exchanges has chosen to list the ABC side of the chain as Bitcoin Cash (BCH). The Seattle based trading platform Bittrex has decided to list the ABC side of the chain as “BCH” and the SV side as “BSV.” According to Bittrex the exchange is opening up deposits, withdrawals, and trading for BCH but with longer confirmation (20) times for deposits.

“The “BCH” ticker will remain the Bitcoin ABC chain before the hard fork block — Bittrex will observe the Bitcoin Cash network for a period of 24 to 48 hours to determine if a chain split has occurred and the outcome,” Bittrex Zendesk support explained on Nov. 17.

Many BCH supporters seem to be confident that the war is close to ending and believe exchanges will continue to list ABC as Bitcoin Cash (BCH) and SV as BSV. However, some SV supporters are still in disbelief over the outcome and think the hash war will favor their side in “weeks” or maybe even “months.” ABC proponents don’t seem to be fazed by the continued threats of re-orgs and 51% attacks, and have sought to shun instigators of war. Even today’s stress test has been regarded as a fluke, and nothing more than an SV marketing ploy, according to members of the r/btc forum.

What did you think of the past three days? Do you think the hash war is over? Let us know in the comments section below.


Images via Shutterstock, Pixabay, Coin Dance cash, Twitter, and the Bittrex logo. 


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How the Bitcoin Cash (BCH) Hash War Is Affecting Bitcoin (BTC)

The last 24 hours in the crypto-market have stunned many traders and left them speechless. This is due to the fact that Bitcoin (BTC) fell from levels of around $6,300 to a new low of $5,544 in a matter of hours if not minutes. The total crypto market capitalization also fell from levels of $209 Billion to $180 Billion in the same time period.

BTC is currently trading at $5,660 and down 11% in the last 24 hours. The total crypto market capitalization now stands at $186 Billion. All other cryptocurrencies are bleeding heavily also.

The Bitcoin Cash Hash War

One explanation of the current turmoil in the crypto-verse, is the ongoing Hash Wars between the Bitcoin Cash (BCH) community as they prepare for the upcoming BCH hard-fork. Both sides of the ‘battle’ – Bitcoin Cash ABC and Bitcoin Cash SV – have vowed to take down the other using all means possible.

The ABC version is supported by the CEO of Bitmain, Jihan Wu and Roger Ver. The SV version is backed by Craig Wright who claims to be the real Satoshi Nakamoto.

Relocating Hash Power from BTC to BCH ABC

A few days ago, Bitmain CEO Jihan Wu was reported to have mobilized 90,000 mining machines to gain an upper hand in the hard-fork that is scheduled for today. Jihan is quoted as stating the following with regards to the ongoing BCH crisis:

I have no intention to start a has war with [Craig Wright], because if I do (by relocating hash power from BTC mining to BCH mining), BTC price will dump below yearly support; it may even breech $5,000. But since [Craig Wright] is relentless, I am all in to fight till death!

Roger Ver’s mining pool of Bitcoin.com also announced that it will be redirected hash power from Bitcoin to Bitcoin cash ABC for one day.

Craig Wright’s Response 

Craig Wright seemed unfazed by the attempts of both Jihan Wu and Roger Ver. Mr. Wright took to Twitter to explain that for a winner to emerge, there has to be continuous mining of Bitcoin Cash. One day will not win the battle. His tweet can be found below.

Dr Craig S Wright

 

Craig Wright also stated that the fall of BTC does not phase him. He made this statement as he warned BTC miners from switching to Bitcoin Cash. His tweet had this to say:

To all BTC miners…

If you switch to mine BCH, we may need to fund this with BTC, if we do, we sell for USD and, well… we think BTC market has no room… it tanks.

Think about it. We will sell A Lot! Consider that…. And, have a nice day (BTC to 1000 does not phase me)

In conclusion, and with the BCH hard-fork only hours away, we might see hash power continue being redirected from BTC towards Bitcoin Cash. What this means is that there will be a possibility of there being less miners available to sustain the Bitcoin network as the hash wars continue.

Secondly – and as stated by Craig Wright – we might see a massive sell-off of BTC by both sides to finance the war.

Both scenarios are on the minds of savvy and keen crypto traders who have probably fled to stablecoins till the hash wars provide a winner and more stability in the crypto markets.

What are your thoughts on the ongoing Bitcoin Cash situation? Please let us know in the comment section below.