Transactions occur only from one crypto to another – no fiat gateways exist on the site. BITBOX charges a 0.1% trading fee.

The exchange does business in about 15 different languages, but it currently excludes customers from Japan and the United States. Moreover, the site excludes the Japanese and Thai languages, although English and Korean receive support.

The company intends to adhere scrupulously to all laws and regulations of each country, and consequently, provide service to Japan and the United States after receiving regulatory approval to do so. In the meantime, the website rejects customers if IP addresses, telephone numbers, or KYC (Know Your Customer) data show them to be from excluded markets.

I Walk the LINE

BITBOX stems from LINE Corporation (“LINE”). A Japanese corporation headquartered in Tokyo, LINE established itself with its flagship messaging app. Released in 2011, the messaging app reached 200 million users within six months. By 2013, LINE achieved the status of being Japan’s largest social network.

Within LINE exists the LVC Corporation (“LVC”), and this group holds the responsibility for the cryptocurrency and blockchain businesses. And as part of this effort, LINE Tech Plus PTE. LTD. in Singapore runs the BITBOX business.

The BITBOX exchange fits into LINE’s long-term strategy to become a leading provider of FinTech services. And being a publicly traded company, rather than a private one, provides performance information of the organization transparently to the public.

LINE has already found success with other FinTech products. LINE Pay launched as a mobile wallet. Over 40 million users have spent over $4 million dollars using the wallet. LINE also partnered with Nomura on a joint venture involving online brokerage and investment consultation.

Advantages Gained from the Message App Experience

Having built a successful messaging app business gives LINE advantages in creating the BITBOX exchange. Messaging apps require user interfaces (UI) that yield good user experiences (UX). And cryptocurrency software sorely needs good UI/UX. Messaging apps also require strong user security. And similarly, crypto exchanges require strong user security.

To enhance security on BITBOX, the system utilizes BitGo multi-signature technology. BitGo uses a multi-signature, three key algorithm that removes any possibility of a single point of failure.

BITBOX also implements a 24-hour surveillance system to protect customers, and up to 90% of users’ assets will be secured in cold storage. The system attaches to LINE’s messaging app, so both users and executives receive notice immediately should a hack occur.

Additionally, BITBOX monitors any irregular trades or attempts to manipulate coin prices. And as a final safeguard, users receive insurance for their assets. Utilizing its knowledge of mobile programming gained from its messaging app, BITBOX will release a mobile app for its exchange as well.

LINE Cryptocurrency LINK

Along with the launch of the BITBOX crypto exchange, LINE introduces the LINK cryptocurrency. Subsequently, the BITBOX exchange serves as the exclusive provider of the LINK cryptocurrency. A reward system provides one use for the LINK coins. Users of a wide variety of LINE products and services earn LINK just by using those products and services.

To support this coin and its infrastructure, the organization created a new blockchain called LINK Chain. This allows seamless integration of all related decentralized apps.

In adhering to all national rules and regulations, LINK Point serves as the token instead of LINK for residents of Japan. Unlike LINK, LINK Point cannot be traded or exchanged until after receiving official regulatory authorization. LINK Point only provides a mechanism for customer reward points at this time.

LINK does not yet appear on CoinMarketCap.

Additionally, LINK will not be distributed through an ICO (Initial Coin Offering). The fundamental purpose remains to simply provide customers of the LINE products with a mechanism for customer rewards.

Singapore

Although LINE exists as a Japanese corporation headquartered in Tokyo, the executives chose to establish BITBOX as a Singapore company. The Republic of Singapore reigns as a leading destination for cryptocurrency companies.

Crypto Exchanges

Many of the world’s largest crypto exchanges operate with some presence in Singapore. These include the American exchange Coinbase, GDAX, and Gemini as well, which has a local branch in Singapore. In addition, the FSA-licensed Quoine has an office there as well. Some exchanges that are local to the city-state of Singapore include Crypto-One-Stop-Solution (COSS) and CoinHako.

ICOs

Singapore provides a global financial hub having achieved the status of being the third largest foreign exchange center, and it earned the reputation as a haven for ICOs. Some of the ICOs launched in Singapore include TenX, Golem, and Qtum.

Although the government shows a liberal attitude toward cryptocurrencies and ICOs, strong regulations exist to protect people from fraud and the possibility of money laundering.

Consequently, it’s easy to see why LINE chose to locate its BITBOX exchange in the Republic of Singapore.

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Final Thoughts on BITBOX

A multitude of crypto exchanges exist for users to trade coins, some better than others. But even good exchanges often suffer from issues like poor user interface and user experience (UI/UX). LINE gained valuable expertise in creating a successful messaging app. And they also demonstrated proven success with their other FinTech ventures.

This gives hope that BITBOX will provide an opportunity to see a crypto exchange that further satisfies users.

The post BITBOX Exchange Opens for Business appeared first on CoinCentral.

Video game careers traditionally involve such areas as programming, designing, testing, and marketing. Cryptogames broaden these horizons by including players as a paid part of the game community. Let’s take a look at some of these games and how they’re helping to broaden video game careers in blockchain. 

BUFF, the Naked Truth of How It Works

Imagine a world where playing games earns you currency. The BUFF project implements just such an ecosystem.

The goal BUFF seeks to achieve is to provide a gaming platform with an economic ecosystem using blockchain technology. Success in the games creates economic rewards. On this platform, you mine coins in the background while playing. These economic incentives increase loyalty to the game brands and provide you with an auxiliary way to start a part-time video game career.

BUFF utilizes the Delegated Proof of Stake (DPoS) protocol to insert new blocks on the blockchain. This algorithm helps to reinforce the goal of creating a community out of the network of users. In addition, the coins you earn by playing one game qualify for use in other games on the BUFF network.

BUFF partnered with Overwolf to add functionality to their system. Overwolf software functions as an overlay to add applications to games. These applications increase the capabilities of the games and log statistics on the players.

The Technology

To power video game careers, the engineers programmed BUFF as an open source project residing on GitHub. They used Javascript as the programming language and powered the system with Ark. The Ark ecosystem seeks to simplify blockchain development by creating all-in-one solutions, giving users the power to create, customize, and scale their own blockchain networks.

CryptoFights, Duking It Out

Similar to BUFF, CryptoFights utilizes blockchain technology to reward players in cryptogames. Operating on serverless gameplay, CryptoFights uses a sidechain for high-performance scalability, and it secures game assets by operating on the Ethereum blockchain. Just like the classic game Street Fighter, CryptoFights players try to find real-time strategic advantages against opponents using different weapons and armor.

Enjin Coin’s Ethereum based ERC-1155 token powers the economic ecosystem of CryptoFights. The ERC-1155 token standard uses the minimal amount of data necessary to distinguish one unique token from another and perform transactions.

Consequently, Enjin Coins enable users to purchase in-game items on a decentralized platform, and users store these coins in the Enjin Wallet. As with BUFF, CryptoFights uses the Delegated Proof of Stake (DPoS) protocol.

Those Darn Cats

CryptoKitties introduced the crypto community to a new way to make money with cryptogames. Utilizing the ERC-721 token standard, CryptoKitties provides unique collectibles where collectors can prove ownership of a unique asset on the internet.

Assets gain value by their virtue of being unique with more desirable assets increasing in value through market demand.

Trading Cards

Additionally, digital trading card games are another cryptogame option. Fuel Games hopes to serve this market with Gods Unchained. The game uses ERC-721 tokens to store the trading cards on the Ethereum blockchain and guarantee that the playing cards are scarce.

The cards represent creatures, spells, and weapons. You not only use the cards to play the game, but if the cards you own increase in value, you profit when you sell them. Gods Unchained somewhat mimics the gameplay of Magic The Gathering and Hearthstone.

Fuel Games previously created the Etherbots blockchain game and learned some of the pitfalls and advantages of blockchain game programming. Although decentralized ownership of assets provides a great benefit, the company learned that placing all the gameplay directly on the blockchain resulted in slow gameplay and expensive transaction costs.

Consequently, the designers of Gods Unchained removed the gameplay off-chain entirely. Based on the experience of Fuel Games, they managed to attract venture capital from a number of high-powered organizations such as Coinbase.

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Final Thoughts on Video Game Careers

Traditionally, video games careers involved being a professional in the industry and designing games, programming them, or testing them, but cryptocurrency provides multiple ways to enhance video game careers through cryptogames.

With the BUFF paradigm, users make money simply by playing the games. Other approaches involve players owning digital assets and profiting from that ownership. Since the Colossal Cave adventure was programmed on a PDP-11 in 1976, games continue to occupy the forefront of technology. As an emerging technology, expect blockchain to continue to innovate game platforms.

The post Video Game Careers Accelerate to Hyperdrive with Cryptogames appeared first on CoinCentral.

TRON and XRP reveal interesting similarities and contrasts, both with each other and with other cryptocurrency and blockchain projects. XRP provides the ticker symbol for Ripple, and TRX provides the ticker symbol for TRON.

In addition, analysis of these two projects shows that they reflect different goals and strategies from many traditional crypto projects. Does that mean that it’s TRON and XRP against the rest of the crypto world? Let’s take a look.

TRON and XRP vs. Ethereum and Bitcoin

TRON and XRP respectively provide the antithesis of Ethereum and Bitcoin. While Bitcoin seeks to displace traditional banks and financial organizations with its decentralized and trustless network, Ripple’s XRP seeks to serve those very organizations as its target market.

XRP vs. Bitcoin

Bitcoin profits miners as incentives, but Ripple’s XRP seeks to profit from the customers using the RippleNet network. And while many crypto enthusiasts view coins as investment vehicles, Ripple’s XRP serves as a tool for the RippleNet.

As Ripple CEO Brad Garlinghouse once said, “Ripple is a private, cash flow positive company and we don’t have any plans to raise additional capital (and no offense, but if we did, we’d only raise capital from institutional investors!).”

TRON vs. Ethereum

On the other hand, TRON hopes to provide a decentralized platform for the development of decentralized applications (DApps). Ethereum created this model, so TRON intends to compete directly against Ethereum.

Vitalik Buterin, the creator of Ethereum, emerged from a software engineering and research background. But Justin Sun, creator of TRON, comes from a background of business and entrepreneurship. Moreover, Sun worked at Ripple for over two years. Consequently, TRON and XRP approach blockchain from a business perspective first, rather than an engineering perspective.

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Ripple’s XRP–A Business Approach

Launched in 2012, Ripple seeks to provide a suite of software solutions marketed to banks, large financial institutions, major corporations with large financial departments, and other similar organizations. Ripple’s software products enable these customers to send payments, process payments and maintain liquidity.

A Problem to Be Solved–And Paid For

Currently, for example, a multinational corporation headquartered in New York required to process funds to Tokyo must jump through multiple hoops. The corporation deposits funds to a service to make the transfer, pay fees for that service, accommodate any relevant laws and regulations, and deal with exchange rates. It also waits patiently while each step of the process takes time to complete. Time zone differences alone create problems.

Moving money across borders currently presents so many challenges that to maintain liquidity in a given country, multinational corporations store large deposits in that country. But storing large sums there may not be the best use of that money.

Cryptocurrency resolves issues relating to exchange rates, the speed of transfer, and fees. And Ripple intends to solve these problems specifically for large financial organizations. Why target this segment in particular? Because they process a lot of high-volume payments and deal with these issues constantly. Cryptocurrency addresses their problems, and as customers, they pay handsomely for ease of use and efficiency.

Four major payment providers MoneyGram, MercuryFX, IDT, and Cuallix have all announced they would run pilot programs of Ripple’s products. Other users of Ripple include Santander, UniCredit, UBS, and Standard Chartered.

The Team

Servicing this market requires a team familiar with the Fortune 500 culture and comfortable interacting in that environment. Although successful in his own right, the casual appearance of Vitalik Buterin fails to inspire confidence across the boardrooms and C-suites of the corporate world. A shadowy, mysterious character like Satoshi Nakamoto equally fails.

Ripple’s executive team includes Brad Garlinghouse who holds the positions of CEO and member of the Board of Directors. He served as President of Consumer Applications at AOL and held the position of Senior Vice President at Yahoo.

Ron Will serves as Chief Financial Officer and prior to Ripple held the position of CFO at TubeMogul, Inc. Adobe acquired TubeMogul for $540 million. Other executives held significant positions at HSBC, Intuit, Bloomberg, CNBC, MasterCard, and Citibank. The team demonstrates high levels of experience and competence.

Not Decentralized? Whatever!

The question as to whether Ripple exists as a centralized or decentralized network remains irrelevant to the point of being almost ludicrous. Ripple targets major financial institutions and the financial departments of large corporations as its chosen market segment. Decentralization appeals to cypherpunks, anti-establishment advocates, libertarians, revolutionaries, and technologists.

Decentralization fails to appeal to corporate executives of major financial institutions. Corporate executives worked long and hard to become successful stewards of large organizations. They control large amounts of financial assets. And they expect to receive service for their money, not the egalitarianism of decentralization.

TRON–A Vanity Project?

TRON and XRP take different perspectives. While Ripple focuses on providing solutions for corporate needs, TRON almost appears to be one man’s vanity project. But Justin Sun, the founder of TRON, demonstrated success in past ventures, so he shows sufficient business skills not to be dismissed out of hand.

What Problem Does TRON Plan to Solve?

TRON began as a decentralized entertainment content sharing platform. But now TRON claims complete decentralization of the web as its current goal. And to quote the corporate website, “As a decentralized platform in Web 4.0, TRON’s powerful capability make it be adaptable to a wide range of complex scenes and also support applications with vast amounts of users.”

(What they mean by “Web 4.0” remains unclear. Web 1.0 defined the first static web pages on the internet. Web 2.0 provided rich user interfaces we see today. Decentralized blockchain often gets referred to as Web 3.0.)

The TRON Team?

While Ripple XRP boasts a large and experienced executive team who all show powerful accomplishments, a look at the team page on the corporate website for TRON shows an egocentrically large photo of Justin Sun. The site lists no other corporate officers. But it provides a group picture of a large number of anonymous, unsmiling youths who apparently serve as programmers.

How much music can you really listen to from a one-man band?

Making Deals

Without innovations in technology or a visible team leading the project, the future of the TRON project appears to reside in the organization’s ability to negotiate deals and partner with other organizations.

In March of 2018, TRON partnered with the BitGuild gaming platform. According to the agreement, BitGuild provides a unique set of limited-edition in-game assets for the TRON community. Later on, in May of 2018, TRON announced a strategic partnership with vSport. vSport uses blockchain technology to serve the soccer community.

Finally, in June of 2018, TRON acquired BitTorrent. BitTorrent created a communications protocol for peer-to-peer file sharing. If you lack the skills to build technology, then, by all means, buy a company that compensates for your deficiencies.

TRON And XRP — Final Thoughts

Bitcoin and Ethereum created innovations in technology. Alternatively, TRON and XRP exist as business ventures utilizing current concepts in technology. Ripple’s XRP lacks the revolutionary technology of Bitcoin; but led by experienced executives, Ripple shows the ability to focus on a lucrative market segment.

Ethereum introduced the concept of a decentralized platform for application development. The Ethereum Foundation continues to innovate, research, and develop new blockchain technology. TRON gives the impression of being a basket full of buzzwords with no discernable team to implement a vision. But perhaps that will change. TRON’s one notable strength appears to be its access to capital to purchase what it can’t build.

The post Tron vs. XRP, and Both Controversial Tokens Against the World appeared first on CoinCentral.

FOLM coin (FLM) claims to have identified weaknesses in the Bitcoin network, and it proposes its cryptocurrency as a solution to those perceived problems, and the project began in October of 2017. According to the FOLM coin developer Gorkem D., some of Bitcoin’s shortcomings include “slow block times, insufficient block size, blockchain synchronized nodes, and the threat of ASIC mining.”

To sum this up, FOLM coin considers Bitcoin to be too slow and also susceptible to centralization through the 51% attack. In this attack, one miner or a clique of miners control the network through their superior hardware.

FOLM coin also considers Bitcoin’s node structure to be a problem. FOLM addresses this through a master node system. In a master node system, master nodes exercise greater privileges over the network through voting rights. And in some cases, master nodes speed up the network.

As with Litecoin and Bitcoin Cash, FOLM coin provides a larger block size than Bitcoin to speed transaction time. Bitcoin blocks contain one megabyte of data. FOLM contains four megabytes of data.

With these features in place, FOLM states in its white paper that it hopes to become a payment system, and it hopes to provide an infrastructure to build applications and services on top of, such as a banking application.

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Two Websites

The project maintains two separate websites. The FOLM Universe site (also referred to as FOLM.io) functions primarily a marketing and advertising site publicizing FOLMServices, FOLMBank, FOLMApps. The FOLM Coin site provides more technical information, and it includes the white paper and resources such as a block explorer.

How Does FOLM Coin Work?

PHI1612 algorithm

The FOLM coin project prides itself on its use of the PHI1612 algorithm.

Introduced by the Luxcore project for LuxCoin, the PHI1612 algorithm provides a hybrid consensus approach that combines Proof of Work (PoW) and Proof of Stake (PoS). PHI1612 attempts to be both ASIC resistant and NiceHash resistant. This means miners competitively produce blocks against other miners with more expensive and specialized hardware without disadvantage.

ASIC stands for Application Specific Integrated Circuit. ASIC’s provide powerful computational abilities useful in winning the cryptographic puzzle required by Bitcoin to create the next block on the chain. As a Slovenian organization, NiceHash provides a cryptocurrency cloud mining service where miners purchase hashing power.

Algorithms such as PHI1612 seek to level the playing field for miners. Consequently, the network remains decentralized and resistant to the 51% attack where one miner or a clique of miners control the network by virtue of possessing the most powerful hardware.

To enhance security, PHI1612 uses multiple hashing algorithms, including Skein, JH, Cubehash, Fungue, Gost, and Echo. Basically, think of this as protecting the network by locking a box inside of a box inside of another box. So to hack the system, you have to break one after the other after the other.

This algorithm also claims to consume less energy than tradition PoW algorithms.

Software Source Code

To create the FOLM coin project, FOLM’s developers cloned the Bitcoin project, and then they copied code from some of the other cryptocurrency projects such as Bulwark.

GitHub hosts the FOLM code base as an open source project, and the code is programmed in the C++ language. One programmer works on the project.

In addition to the main project repository, GitHub also hosts a secondary FOLM project for building a paper wallet. Coded in Javascript, the FOLM team cloned the code for this wallet from the Electron wallet project.

FOLM Team and White Paper

The entire team for FOLM resides in Istanbul, Turkey, and only one individual on the team lists FOLM as his place of employment. On LinkedIn, Gorken D. lists his position at FOLM.io as Co-Founder / Software and Business Development Director. His job history includes a number of software development positions since 2008. On the other hand, Volkan Inanc lists himself as CEO on the company website, but on LinkedIn lists Veron Bilisim A.S. as being his day job.

The primary function of the FOLM project is to facilitate payments, and the FOLM Coin White Paper provides additional details on the goals and technology of the project.

Coin supply and sustainability

FOLM takes the perspective that the success of the network depends on miners. Consequently, they intend to maintain the profitability of mining over the long term. And to incentivize miners to remain on the system over time, FOLM rewards miners more in their second year on the network than on the first.

And the benefits of ASIC resistance and NiceHash resistance contributes to this reward philosophy. With the PHI1612 algorithm providing a level playing field, the system empowers all miners to earn rewards.

The company premined 5% of the coins to fund the project. The first year expects to see 7,884,000 FLM mined, and the second year should mine 5,256,000 FLM. The 23,001,916 FLM caps the total coin supply, and mining expects to end in 32 years.

Trading history

Thus far, FOLM coin’s presence on the trading market continues to fly under the radar. CoinMarketCap fails to list the coin at all.

Where Can You Buy FOLM Coin?

List a few exchanges, internally link to some of our guides. If we don’t have the option on our guides, let us know and we’ll add it (bonus points and $ if you write it so we can paste it in there!)

Several minor exchanges currently list FLM, primarily as a pair to trade with Bitcoin. These include CoinExchange.io, the CryptoBridge decentralized exchange, and BitexLive.

Where Can You Store FOLM Coin?

In addition to the GitHub repository mentioned earlier for a paper wallet written in Javascript and cloned from the Electron wallet project, the main project repository includes source code for a wallet in C++, cloned from the original Bitcoin project as well as other crypt projects.

And FOLM Universe offers a variety of wallet download options for desktop, web, and mobile. These run on Mac, Windows, Linux, iOS, and Android.

The post What is FOLM Coin (FLM)? appeared first on CoinCentral.

Initiated on May 7, 2014, Karmacoin died as a project in 2015. Karmacoin (KARMA) represented the digital currency of Karmashares LLC, registered in the state of Wyoming. Karmashares proposed to create long-term value for investors by developing a variety of products and services.

In short, Karmashares intended to serve as something of a cooperative entity. Members purchased shares, and they theoretically received profits on a quarterly basis. Only non-U.S. citizens and non-resident aliens of the U.S. qualified for membership. And the organization informed users that coins exchanged for membership did not constitute an “investment.” Karmashares offered membership only on a private basis, not publicly.

To promote the concept of “doing good”, Karmashares enabled members to invest their earnings into the Karma Fund and the causes represented therein.

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How Does Karmacoin Work?

The Karmashares cooperative planned to fund a variety of profit-making projects, and then they would reward members of the coop through the profits.

Chasing Shadows

A web search engine named Lill constituted one such project. Members earned rewards by using the search engine, and advertising would generate revenue.

Other projects included Hireplex (a video job interview website), Wespond (a video question and answer website), and FABRIK (an online clothing and accessories store). Job seekers use Hireplex for free, but employers pay a fee. Wespond planned to allow users to post questions and responses on a social media site. The system allowed responders to charge for answers. FABRIK intended to sell Karma branded items, such as tee shirts and caps.

No evidence exists to show any of these projects grew to become anything more than talk.

Apparently, Karmashares ran afoul of the U.S. Security and Exchange Commision (SEC), And the website of the Secretary of State for Wyoming lists the status of Karmashares as “Inactive – Administratively Dissolved (Tax)” as of July 9, 2015, and the site describes the company’s tax status as “Delinquent.”

Karma Chameleon

Canadian-American Antoine Sorel Néron created Karmashares and claims it to be the very first Initial Coin Offering (ICO). And at the time the phrase Initial Public Offering for Coins (IPOCO) substituted for what we now call an ICO. Mr. Sorel also goes by the name Tony Sorel and by the moniker of “Kosmost”.

His online biography makes for colorful reading, to say the least. He cites “extensive experience leading massive IT projects for a large city (1999)”, but he never identifies the city. “An entrepreneur from age eight, he has also worked for some of the biggest companies in the world…”

Then at the age of 20, Mr. Néron settled down to work for a financial public relations firm called Financial Relations Board “where he quickly rose through the ranks to become the youngest executive in the history of the company.”  LinkedIn shows Financial Relations Board to be a company of less than 20 people.

He claims the honor of “an inclusion in Standard and Poor’s Register of Corporations, Directors and Executives as its youngest member”. Searching the register reveals no entry on Antoine Sorel Néron.

Finally, he relocated to Hong Kong and claims to have started “several multi-million dollar internet businesses using his own funding.”

Goodomy, Spawn of Karmashares

Early 2018 saw Mr. Néron establish Goodomy using many of the same notions as Karmashares. Goodomy stands for “the GOOD economy”, and the GOOD token currently sells for around $0.001924 USD with a total supply of 888,000,000 GOOD tokens.

Goodonomy’s social blockchain claims to run on what they call the  OTOL platform, which they claim to be “the world’s first ‘action engine’”. On this platform, they claim to provide the Shopomy app, a mobile app to transact business without fees.

As history repeats itself, no evidence exists to show OTOL and Shopomy exist as anything other than talk. And Goodomy boasts 5 followers on LinkedIn.

Karmacoin Code

Karmashares created created one GitHub repository for its software source code. The only programmer associated with this project goes by the name of Leo Ribeiro from Fort Lauderdale, Florida. The project found there consists essentially of one C++ file of 135 lines, including whitespace. To put this in context, this represents about the size of a programming student’s homework assignment. For comparison’s sake, the Bitcoin project includes hundreds of files, and it involves perhaps around a hundred thousand of lines of code.

The Karmacoin team also provides another GitHub repository for its project. This project also includes only one programmer, but it does not provide the programmer’s name. This provides a much more extensive collection of code. The last update to this code happened in February of 2014. This code appears to have been cloned from both the Bitcoin project and the Litecoin project.

Like Litecoin, the Karmacoin project intended to be a lightweight version of Bitcoin.

Hall of Mirrors

Instant Karma’s going to get you, and distinguishing Karmacoin from any number of similarly named cryptocurrencies proves to be a challenge. An ERC-20 token called Karmatoken (KTN) uses much of the same rhetoric as Karmashares. A product called Karma Koin provides a virtual currency on a debit card to pay for online games. And another product called Karma (KRM) provides a decentralized, cross-border, peer-to-peer loan ecosystem.

Karmacoin Supply and Sustainability

The Karmacoin project planned to reward early miners more favorably than later miners, no doubt to encourage early adoption. They planned on mining a maximum of 92 billion coins. The mining process incorporated the X11 protocol. First introduced by Dash, the X11 protocol claims to enhance security.

Trading History

CoinMarketCap currently lists Karmacoin at around $0.001074 USD, so for every 10 Karmacoins you own you have one penny. CoinMarketCap places question marks on the Market Cap and Circulating Supply of the coin. Consequently, they remain a mystery. But trading activity does exist. Someone appears to be unloading their coins as best they can.

Where Can You Buy Karmacoin?

Where can you go to purchase a dead dream of days gone by?

Surprisingly, you can find exchanges that continue to list Karmacoin.

One goes by the name of YObit.net.

Similarly, an exchange called BigONE appears to continue to trade in Karmacoin in exchange for EOS.

Finally, OTCBTC also trades Karmacoin for EOS.

Where Can You Store Karmacoin?

The Karmacode Team Source code repository includes software for a wallet to be built as part of the project.

Clicking on the hyperlink provided by CoinMarketCap leads to the website for the Atomic Wallet. However, Karmacoin does not appear on the Atomic Wallet Assets List as one of the supported cryptocurrencies. It’s possible that Atomic Wallet serves as a default destination for CoinMarketCap wallet links, or it’s also possible that Atomic Wallet supported Karmacoin in the past.

The Karmashares white paper list hyperlinks for “Windows wallet”, “Mac wallet”, and “Linux wallet”. But if you click on those links you will be redirected to an animated pornographic games site. Well, the organization needs to generate revenue somehow.

The post What is Karmacoin? (KARMA) appeared first on CoinCentral.

Bitcoin Security: Bubble Boy and the Sewer Rat

Andreas Antonopoulos presents a lecture called “Bitcoin Security: Bubble Boy and the Sewer Rat.” In this lecture, he explores centralized systems as a “bubble boy”–a system created to be secure by isolating it from external forces. Eventually, the bubble bursts, exposing the system, and living in isolation prevented that system from building an immunity to attacks.

On the other hand, Andreas argues that open blockchains like Bitcoin are “sewer rats.” They live in the wild subject to untold hostile forces. Consequently, they build immune systems by necessity. Hacks happen, but the solutions serve to harden the system against future attacks.

As Andreas says at the end of the talk:

“All forms of cryptography can be broken. All forms of cryptography are eventually broken. That is a truism… including that currently behind Bitcoin, yes. The question again is time scale… We expect cryptography to be broken. We expect every system and subsystem within Bitcoin eventually to be weakened. What we need to do is 1) make sure that any such weaknesses are not systemic and complete. Then [2)] identify the weaknesses early enough to start addressing them so they don’t become systemic. The best way you do that is by existing in an open, collaborative environment where you learn about those weaknesses.”

Open up Your Code and Let the Sun Shine In

Like many cryptocurrency projects, Bitcoin serves as an open source project. And in open source projects, anyone can view the code. Just download the code and study it to find out if Bitcoin can be hacked! With a multitude of eyes looking at the code, the problems reveal themselves more readily, and programmers resolve the issues as people identify them.

In fact, intent alone differentiates a security vulnerability from a bug. A user hits a sequence of keys that crashes an application. A hacker hits the same sequence of keys to crash the application. The user accidentally encountered a bug. The hacker exploited the bug to disrupt the system. Bitcoin runs as software, all software contains bugs, and hackers exploit bugs.

Vulnerability Disclosure

Recently, a developer working on Bitcoin for the Digital Currency Initiative at the MIT Media Lab discovered a vulnerability in Bitcoin Cash. The Bitcoin and Bitcoin Cash communities generally get along about as well as the Road Runner and Wile E. Coyote, and with about the same results.

This vulnerability if exploited could have potentially destroyed Bitcoin Cash as a payment system from that point onward. The programmer acted honorably and, privately informed the Bitcoin Cash project of the flaw. They fixed the bug before anyone exploited it, and publicly disclosed the fix on May 7, 2018.

Smart Contracts (Or Not So Smart)

From a security perspective, smart contracts present one of the greatest challenges of blockchain. Smart contracts are pieces of executable code to manage transactions, and they live on the blockchain. Since they live on the blockchain, they live forever. And since they live forever, any bugs or security vulnerabilities they contain also live forever.

Poorly designed and implemented code in a smart contract can lead to enormous financial losses. The infamous DAO hack resulted from a poorly coded smart contract.

Hackers love complex code because bugs live there. Conversely, security loves simplicity. The Bitcoin community designed the Bitcoin Script language to be simple and limited purposely as a security measure.

Alternatively, Ethereum strives to provide a decentralized programming platform, so they designed the Solidity programming language to be Turing Complete, which is to say capable of all the complexity a computer offers.

Capture The Flag (CTF) adventures turn security research into a game, and Security Innovation provides one for free on blockchain smart contracts called Blockchain CTF. The goal of the games consists of finding all the security flaws in the given code.

Ethereum Solidity smart contract programming demands good programming practices with security in mind. Can Ethereum be hacked? Yes, and so can Bitcoin.

On July 27, 2018, the ICO for the Ethereum project known as KICKICO lost $7.7 million to a hack. Hackers obtained the project’s private key and exploited a smart contract. To be fair, this sounds like the fault lay in protecting the private key rather than in the smart contract itself.

Throw It Against the Wallet and See If It Sticks

Wallets own the responsibility of managing private keys since they provide storage for your private keys. Use an online wallet, and your private data lives on someone else’s server, subject to their vulnerabilities. But if you use a wallet on your hard drive, that drive might die. Offline hardware wallets provide the best security.

Against the Wallet

Storing crypto in online wallets invites attacks.

One way hackers do this is first, they obtain your email address and phone number, information readily available for most people. Next, they initiate a password reset for your account. Then they exploit vulnerabilities in the Signaling System 7 (SS7) telephony protocol.

Major cell phone companies such as AT&T and Verizon use this protocol. Using this protocol, the hackers intercept the authorization token the company sends to the victim’s account.

Having accomplished this, the hackers now access the two-factor authentication codes sent to the victim’s phone. With this, they access the user’s account on a system like Coinbase and access the victim’s funds.

Broken Privacy

What goes around comes around and ironically some crypto flaws bite back at the hackers.

Researchers from a number of universities including Princeton, Carnegie Mellon, Boston University, and MIT discovered a privacy defect in Monero. Contrary to Monero’s purpose, this flaw allowed someone to see the details of transactions and identify who made those transactions.

Since blockchain data is permanent, utilizing a flaw like this enables investigators to uncover all the information of past transactions. Imagine a thief robbed you believing his deeds remained hidden, then you saw him exposed by a software bug!

Final Thoughts – Can Bitcoin Be Hacked?

Software never ends, bugs infest software, and security vulnerabilities define a certain class of bug. Some hacks derive from cleverly manipulating the code. But some hacks disregard technology altogether.

In December of 2017, NiceHash suspended operations due to a hack that cost $64 million. NiceHash claimed the attack to be “highly professional” and included “sophisticated social engineering.”

Social engineering means nothing more than old-fashioned con artist shenanigans. Hackers use social engineering to convince people to give up their passwords, provide access, or give up other useful information.

Can Bitcoin be hacked? Let me count the ways. But every flaw discovered and fixed strengthens the system for the better.

The post Can Bitcoin Be Hacked? Get Hacked and Find Out! appeared first on CoinCentral.

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Bahamas Announces A Central Bank Digital Currency (CBDC)

On Friday, June 22 at the Bahamas Blockchain and Cryptocurrency Conference, Deputy Prime Minister K. Peter Turnquest announced the Central Bank of the Bahamas intends to introduce a cryptocurrency into Bahamas currency. Additionally, the Commonwealth of the Bahamas plans to develop other blockchain projects to benefit the nation.

Expected benefits include providing financial services to the unbanked, reducing corruption, and stimulating and expanding the economy.

Bahamas Currency Potential Benefits

The Bahamas consists of over 700 islands, keys, and islets. Existing banking services do not reach all citizens. Crypto could solve this problem. Corruption in developing nations often takes the form of randomly overcharging citizens for basic services such as electricity or water. The immutable record of truth provided by blockchain could reduce or eliminate this problem. And the offshore banking industry already constitutes a major portion of the economy, so investment in cutting-edge technology could spur this to greater heights.

Bahamas Vendor Process

Specifically, the Central Bank of the Bahamas invites qualified organizations to submit expressions of interest (EOI) to develop a digital currency system. Based on the submissions, the bank will choose vendors who appear qualified to architect and implement a secure and reliable platform to provide a digital version of the Bahamas currency.

Qualified vendors selected by this process may then be invited to submit a detailed Request for Proposal (RFP). The Central Bank published information regarding this process in a press release on August 1, 2018. The deadline for EOI submissions ends on September 15, 2018.

CBDC Versus Traditional Crypto

Central Bank Digital Currency (CBDC) distinguishes itself from traditional crypto in a number of ways. First and foremost, CBDC maintains centralized control, whereas traditional crypto platforms such as Bitcoin and Ethereum strive for maximum decentralization. CBDC represents a nation, but crypto prides itself on functioning seamlessly across borderless.

Monetary Policy And Value

Monetary policy comes into play. The invention of Bitcoin happened during the economic turmoil of 2008. Bitcoin transactions create new Bitcoins, and these occur only once every ten minutes specifically to create new money at a steady and predictable pace. This monetary policy combats the urge by centralized banks and governments to buy their way out of financial trouble by simply printing a lot more money.

Similarly, 21 million caps the maximum number of Bitcoins that will ever be mined. Nothing prevents a government from printing as much currency as it chooses.

The value of a cryptocurrency ties directly to how useful people deem its technology to be. The value of CDBC ties directly to how affluent and stable people perceive that country to be.

Some cryptocurrencies focus on privacy and anonymity, such as Monero, Dash, and Zcash. But because of the implications of facilitating criminal activity, CDBC like that to be created for Bahamas currency would probably not implement privacy.

The Bank Of Canada

The Bank of Canada looked into the potential benefits and implications of CBDC to determine if it would make sense for Canada to pursue such a project. They decided the strongest benefit of CBDC involved giving customers the power to contest payments. An interesting downside they found would be that CBDC would motivate financial institutions to create their own crypto just to compete, so then you have financial institution money competing with government money.

But by and large, they found no compelling or urgent reasons to implement CBDC immediately and urged caution going forward.

In terms of banking the unbanked, over 98 percent of Canadians possess a debit card representing a bank account. And for emerging economies, other financial mechanisms exist for providing financial inclusion. Payment mechanisms such as M-PESA in Kenya and Modelo in Peru provide payment systems for the unbanked without a CBDC.

The Bank Of England

And the Bank of England similarly looked into CBDC. Among the aspects researchers considered important include the resilience of the system to be available 24/7 all 365 days of the year. The system must provide security from hackers, scalability to accommodate all users, and provide immediate transaction processing. Transactions maintain privacy but not anonymity. The CBDC system must demonstrate interoperability with existing systems, enable innovative new technologies to be incorporated into the system, and upgrade without impacting service to users.

Bahamas Economy

Tourism accounts for over 60 percent of Bahamas gross domestic product (GDP) and employs over half the population. But after tourism, banking and financial services account for the next largest segment of the economy.

The Commonwealth of the Bahamas charges no taxes to international financial customers, and it has no restrictions on customers repatriating their funds. Located about fifty miles from Florida and sharing the same time zone as New York and Miami also provides additional benefits to international financial services. And being a stable democracy, the Bahamas provides international clients a place to bank their assets to mitigate risks presented in other parts of the world.

Final Thoughts On Bahamas Currency Innovations

Consequently, staying on the cutting edge of technology with a digital Bahamas currency helps to ensure continued customer satisfaction. And blockchain and cryptocurrency provide the technological bases of the future for the financial industry.

By encouraging crypto and blockchain development, the Bahamas potentially becomes a model for other nations to follow. And once the Central Bank of the Bahamas begins development on their innovation, the technology likely creates spin-offs that lead to tech start-ups and job creation.

And additionally, when blockchain protects citizens from the corruption of getting charged improperly for basic services like electricity or water, the economic system introduces efficiencies as well as fairness. It’ll be a whole new day at the beach.

The post Bahamas’ Currency Turns To Crypto To Benefit Its Citizens And Stimulate The Economy appeared first on CoinCentral.

A regulation defines a rule of order prescribed by an authority that has the force of law.

All organized social institutions — including governments, companies, schools, and families — naturally provide rules to establish proper codes of conduct. Regulation promote the common good, provide dispute resolution, and specify punishments for bad conduct.

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Fraudulent ICO’s

On the national level, the U.S. Securities and Exchange Commission (SEC) currently focuses its energy on combating fraudulent ICO’s. These schemes often involve scammers convincing investors to put money into projects that have no value.

Centra Tech, Inc.

In April of 2018, the SEC halted operations of Centra Tech. Inc. This ICO raised over $32 million from thousands of investors. The company claimed it would build a suite of financial products, including a debit card backed by Visa and MasterCard that would convert cryptocurrencies into fiat currencies. The SEC found that no relationship with Visa or MasterCard existed in actuality. Additionally, the SEC alleges the company created fictional executives with impressive resumes to deceive investors. One of the two founders made flight reservations to leave the country but authorities arrested him before the flight.

RECoin And The Diamond Reserve Club

In September of 2017, the SEC shut down two ICO’s run by the same individual. REcoin Group Foundation claimed to be a cryptocurrency backed by real estate. Similarly, the Diamond Reserve Club (or DRC World) claimed to be backed by diamonds. The crypto for REcoin would pay for real estate investments, and the crypto for DRC World pay for diamond investments. According to the SEC, no organization existed behind either company.

AriseBank

In Texas in January of 2018, the SEC froze the assets of AriseBank and its founders, obtained a court order to halt its ICO, and appointed a receiver over AriseBank. The SEC claimed the ICO amounted to “an illegal, fraudulent and unregistered offering of securities that violated multiple federal securities laws.”

Crypto Monitors Please Stop Me Before I ICO Again

Although businessmen often oppose the limiting restrictions of regulation, in the world of cryptocurrency serious players often welcome crypto monitors to provide helpful regulations. Bad actors taint the entire industry. And a set of cryptocurrency regulations helps to clarify how to structure a business plan and an ICO.

As Overstock shifts from operating as a retailer into functioning as a cryptocurrency company, Overstock CEO Patrick Byrne states his support for regulation:

“I’m actually quite supportive of the SEC cracking down. This ICO craze this year has led to a lot of people being fleeced, I think. There’s been a lot people bringing coins public with no real business plan. I think a lot of that is problematic. So the SEC has been correct to step in and say we’ve got to start scutinizing this.” CNN Money, “Overstock CEO: bitcoin a ‘form of sound money'”, Dec. 14, 2017

I’m A Web Developer Said the Spider To The Fly

State governments pick up the slack where the federal government doesn’t step in. Florida recently decided to create the position of a crypto monitor to protect investors from fraud.

It’s Always Sunny In Florida (Except At Night)

Florida experiences a higher than average rate of fraudulent activity. According to Federal Trade Commission data, Florida leads all other states in consumer fraud complaints. Around 1,000 complaints get files per 100,000 residents. In terms of identity theft, Florida recorded 186.3 complaints per 100,000 people, the highest number of any state.

One of the reasons scammers target Florida results from the state’s large population of seniors. People over 65 accounted for nearly 19 percent of the population in 2013, making it the highest proportion of elderly residents in the nation.

Scammers target the elderly for a number of reasons. For one, older people typically possess more money than kids. Also, identifying data for seniors exists on many systems that fraudsters can harvest and use.

And a notion exists that the mental abilities of elderly people decline such that they become easier to hoodwink. But in fact, data shows younger adults fall for scams more than the elderly. Life experiences give people between 65 and 75 years of age more knowledge and protection against frauds compared to people between 18 and 25.

Consequently, good reasons motivate Florida to look into protecting residents with crypto monitors regulating blockchain.

Arizona

From a different perspective, on March 29, 2017 Arizona amended its statutes to recognize that a signature secured by blockchain technology qualified as a valid electronic record. Any ownership or other rights whether interstate or foreign in nature remained valid by virtue of the security of blockchain technology. In other words, this statute affirms the immutable truth of blockchain.

Run For The Border

At the international level, national competitions come into play. If one country stifles blockchain innovation with oppressive crypto monitors who apply burdensome regulations, another country will provide incentives to bring in new tech development and the job creation that ensues.

The economics minister of Switzerland, Johann Schneider-Ammann, declared on January 18, 2018 that he wants Switzerland to become “THE crypto-nation.” This follows in the tradition the country has taken to the banking industry.

Canada

Canada approaches the issue of cryptocurrency regulation with serious consideration, and it studies the subject thoroughly to find the proper way forward.

On October 8th 2014, Andreas Antonopoulos testified before the Committee on Banking, Trade and Commerce of the Senate of Canada. This talk provides one of the best introductions ever to Bitcoin and cryptocurrency. By and large, the senators make an effort to ask serious questions to truly understand the subject, and as usual, Andreas provides clear, complete, insightful information.

Finally, How To Referee When You Don’t Know The Game?

The hearings conducted by the Canadian Parliament resulted in the approval of Bill C-31 on June 19, 2014. And this constituted the first national law anywhere in the world on cryptocurrencies.

Alternatively, Stephen Poloz, the head of the Central Bank of Canada stated on January 25, 2018, “I object to the term cryptocurrencies because they are crypto but they aren’t currencies…”

Therein lies the rub for crypto monitors in regulating blockchain. How do you regulate something when no understanding or agreement exists on what defines the thing to be regulated? Does Bitcoin provide a store of value or a medium of exchange? Does it function as money or as a security of a company like stock? Since Bitcoin does not belong to a nation, how does a nation tax it? Does blockchain define cryptocurrency? Or does decentralization? Do existing laws suffice to handle abuses such as money laundering?

Cryptocurrency lives today as an emerging technology in the early stages of its development. As the technology matures, cryptocurrency regulators will better understand how to protect investors from fraudulent activities.

The post Crypto Monitors Regulate Blockchain To Pull Your Assets From the Fire appeared first on CoinCentral.

The internet comprises a network of networks, and if one piece fails, the internet as a whole still continues to function. You may have experienced times when you could not log into your internet account, for example. Perhaps a server crashed. Or maybe a cable disconnected. But when you logged in again you saw the internet continued to function without you. And so the world turns. The internet exists as a decentralized structure, to begin with. 

Some aspects of the internet operate under a centralized authority, however. If you want to publish a new website, for example, you have to purchase a domain name from a provider because a central authority controls domain names.

But do people clamor for the peer-to-peer administration of domain names? Do people even think about domain name administration? Let’s take a closer look.

Infrastructure

The internet defines an infrastructure, similar to plumbing or an electric grid. A plumbing system maintains a reservoir of potable water and a network of pipes and controls. If a new house desires running water, a protocol exists to bring that house water. Thus it is with the internet.

Are users demanding new plumbing, though? When people turn their computers on, the internet connects, business transacts, everything functions normally, and that appears to be sufficient for most of the population.

The World Wide Web

When people talk about a decentralized internet, sometimes it sounds more like they’re referring to the world wide web. Tim Berners-Lee created the web in 1989, and it operates as a layer on top of the internet. It functions primarily as a user interface and provides browsers and links so people can navigate to websites.

You may be thinking that a decentralized internet could bring a better user interface then. But anyone experiencing the user interface of typical cryptocurrency wallets and blockchain sites might well be skeptical.

The web implemented a number of design choices reasonable people might well argue against. But centralization hardly ranks as an issue. Users freely choose their own browser. They decide if they want a browser from a large centralized corporation like Microsoft or Google or from a smaller product like Tor.

The Tor Project

People who ask for a decentralized internet look for privacy and control of their own data.

Computer scientists founded the Tor Project in December of 2006 with the mission of enabling anonymous communication. Obviously, anonymous communication enforces privacy. Tor, an acronym for “the onion router,” protects against network surveillance and traffic analysis.

The onion router provides anonymity with an algorithm of layers along the route of communication. Each layer only knows about the layer before it and the layer after it. The origin and final destination remain unknown to the intervening layers. In cryptocurrency, some privacy coins such as Monero implement a similar algorithm.

Tor publishes many products, including the Tor browser. The Tor browser builds on the same foundation Firefox uses, and Tor provides it as free and open source software. But nothing ever really comes for free.

Users of corporate browsers pay by allowing those corporations to harvest user data. Users of the Tor browser pay primarily with slower response times and a generally more cumbersome user experience. Besides, some websites require user login accounts, so you provide your identity to them anyway.

OpenBazaar

Targeted advertising arises as one of the more annoying aspects of providing your personal information on the internet. Every purchase you make defines an exploitable aspect of your personality, and advertisers hound you ever after.

OpenBazaar provides an online peer-to-peer marketplace with no middlemen and no fees for using the platform. You buy and sell on OpenBazaar by downloading their app. This makes you a node on the network, and unlike traditional e-commerce sites, no central authority rules.

You can make payments with over fifty different cryptocurrencies. And your transactions are secure and anonymous.

To avoid scams and ensure customer satisfaction, OpenBazaar utilizes a feature of Bitcoin known as multi-signature escrow. The buyer and seller agree to a mutually trusted third party before transacting business. The payment goes to an escrow account. If the transaction satisfies both buyer and seller, the funds are released. In the case of a dispute, the trusted third party settles the matter.

Floating Above the Cloud

The internet reigns as a platform for conducting business, and consequently businesses move to decentralization through cloud computing. The cloud services organizations by providing virtual, configurable computing resources. This means companies don’t need to own their own servers and mainframes (known in the industry as “big iron”), and they do not need to purchase resources from a physical data center.

Cloud providers allow users to create and configure virtual computers in software. Users thereby create servers as powerful or modest as their needs dictate.

But the cloud providers like Amazon Web Services (AWS) and Microsoft Azure own the massive amount of equipment required for this task. And although the cloud frees businesses of the need to purchase and maintain their own big iron and servers, cloud services are expensive.

Can Decentralized Blockchain Computing Replace the Cloud?

The simplest service provided by cloud computing has to be disk space for file storage. Put a file on a system on the cloud, then retrieve it later.

In a blockchain file storage scenario, a peer-to-peer network exists. Nodes with excess disk capacity lease disk space to customers. Customers then upload, store, and download files as needed. Users pay with cryptocurrency on a blockchain. Customer files are encrypted, preventing the host or anyone else from reading private data. The files are also broken into multiple parts and distributed across multiple nodes. This distribution also enforces privacy since a host only has a fragment of the user’s information.

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Note that in this process, no centralized authority controls or sells the disk space. Peers sell available disk space to other peers.

Multiple companies now provide platforms for storage using decentralized blockchains. The Sia Storage Platform launched in 2015, and Siacoin powers commerce on their network. Similarly, Storj also provides decentralized storage and uses Storj coin. Finally, the Filecoin project developed by Protocol Labs represents another popular choice.

Decentralized Internet – Concluding Thoughts

To some extent, decentralization resides in the eye of the beholder.

The blockchain network for Bitcoin is decentralized in terms of the consensus algorithm. But given the cost of hardware resources and electricity, wealth is required to mine it. And simple common sense tells us the majority of Bitcoin wealth is centralized in a relatively few affluent early adopters.

When people speak of a decentralized internet, the gist of the matter seems to be the lack of privacy on the web, the lack of control over our personal data, and the desire for affordable resources.

No one product defines the decentralized internet, but blockchain technology provides at least some capabilities to achieve these goals in a variety of functional areas. Time will tell if the products on offer meet user expectations or not.

The post Decentralized Internet – Affordable Resources And Privacy On The Web appeared first on CoinCentral.

Blockchain and the insurance industry show compatibilities in such a way that you can expect blockchain to significantly alter the way insurance companies do business. Ethereum creator Vitalik Buterin says as much. In an interview with Simon Phipps of KPMG China on November 27, 2016, Buterin states:

“I think insurance actually is one of those areas in finance that could be relatively easy to apply to blockchains. I think the reason is that it’s an area where it’s basically just about finance and data. So fairly simple building blocks and I think data has been fairly freely available ever since the internet. And the finance side, you know, is becoming more and more accessible, especially with blockchain technology coming in. So there’s a fairly natural combination, and I think we’re seeing like both individual companies starting to develop some applications like those like flight insurance pilots, no pun intended, and like some fairly large insurance companies just getting interested in the technologies, just dipping their feet.”

Vitalik also declared his support on Twitter for blockchain development in insurance processing.

Yes, I’m an advisor of wetrust. No, I do not have tokens. No, my interest in decentralized insurance should NOT be construed….

— Vitalik Non-giver of Ether (@VitalikButerin) October 8, 2017

The History of Insurance

In ancient China, merchants indemnified themselves against loss by distributing cargo over multiple vessels. So if one vessel sank, the rest of the shipment remained safe. Here, we already see the value of decentralization in insurance.

Danger at Sea

Historians often pinpoint the origin of modern insurance in western culture to a London coffee house in the late 1680’s. Edward Lloyd opened Lloyd’s Coffee House at this time on Tower Street in London, and this provided a gathering place for ship owners, merchants, and seafaring men.

The insurance industry grew out of the deals made to spread risk among multiple parties and bet on a favorable outcome of a trading voyage. Edward Lloyd established Lloyd’s of London as a result of his success in this business.

These beginnings show insurance to be a catalyst for business development. Without insurance, some successful voyages would never have started. Consider the development of emerging technology as a modern equivalent.

Gambler’s Odds

Then in 1654, mathematician Blaise Pascal contacted fellow French mathematician Pierre de Fermat. Together, they developed a theory of probability. Probability theory gives insurers a rigorous tool for calculating the amount of risk involved in a given venture. Pascal’s work provided the basis for the first actuarial tables, and this approach continues to be used by the insurance industry today.

So, in the history of insurance, we clearly see significant areas where blockchain and the insurance industry coincide. Decentralization spreads risk. And mathematics provides smart contracts for the basis of transactions.

Blockchain Benefits to the Insurance Industry

Trust

Throughout the world, trust declines in established powers, whether they are governments or business. The 2017 Edelman Trust Barometer documents this decline. Blockchain technology, at its core, creates a system of trust regardless of whether parties involved in a transaction trust each other or not.

Transparency

In the United States alone, around $7.4 billion remains unclaimed through life insurance where people died, but their funds fall through the cracks. Blockchain technology and smart contracts enforce payment, and transaction data appear openly on the blockchain.

Efficiency

As an established industry, insurance companies use mainframes, outdated database technology, and incompatible systems that experience great difficulty in communicating with each other. Data on a blockchain alleviates these problems. Emerging economies such as those in Asia present opportunities to explore new systems based on blockchain because these economies exist free of established and outdated systems.

Immutable Record of Truth

Insurance depends on knowing the facts properly. When you insure valuables, the insurance company needs to know the condition of those valuables, their location, and even simple proof of their existence. Blockchain provides an immutable record of truth capable of storing all this data and tracking any change of ownership.

Transactions

The insurance industry essentially makes contractual obligations between parties. One party pays the other, and circumstances obligate the other party to pay when conditions meet the proper criteria. Blockchain technology provides a system for contracts to be honored and payments to be made efficiently.

Fraud Prevention

As an immutable record of truth, blockchain’s capabilities include the ability to reduce fraud. Transactions on a blockchain provide information relevant to uncovering suspicious claims and suspicious persons.

Auditing

The transparency of blockchain technology enables improved auditing. Blockchain provides ready access to the criteria used for establishing the price of premiums and how these criteria changed over various timeframes. Consequently, proof of compliance with governmental regulations grows simpler.

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The Blockchain Insurance Industry Initiative (B3i)

The Blockchain Insurance Industry Initiative (B3i) formed in Europe in late 2016. B3i represents a collective of insurance companies collaborating to research the opportunities of blockchain and the insurance industry. After a successful first couple of years, B3i Services AG incorporated in Zurich in March of 2018. As its own organization, B3i Services AG looks to develop and test commercial blockchain solutions for insurance.

The organization released a blockchain prototype for property catastrophe excess of loss reinsurance contracts as its first product. Providing the simplest form of an insurance contract, this also paved the way for common standards to operate going forward.

Final Thoughts

Blockchain and the insurance industry present a myriad of opportunities. Blockchain transparency and transaction processing give both customers and vendors better data and trust. Improved efficiency of the existing industry provides only one path forward. Aspects of blockchain technology expose new ways to think about the business itself. The insurance industry grew out of a need to reduce risk, and it accomplished this by spreading risk over multiple parties. Consequently, the dangers of maritime trade initiated the modern Western insurance industry we know today.

You can see in the decentralization of blockchain the possibility of spreading risk over multiple parties in new ways. Blockchain enables people to insure ventures in a way similar to crowdfunding. And while the cost of overhead of outdated systems limits established insurance companies, blockchain enables microfinance. Therefore, profit from smaller ventures that would normally fly under the radar of the existing industry waits to be found.

A brave new world of possibility exists for those willing to set sail on the adventure of a new insurance industry.

The post Blockchain and the Insurance Industry: The Coming Revolution appeared first on CoinCentral.