Wednesday, September 16, 2015
Bitcoin Exchange LZF Legally Launches in 49 States, Excluding New York
UBS Developing Blockchain-based ‘Settlement Coin’
California's Version of New York's Infamous ‘BitLicense’ Defeated in State Legislature
9 Banking Superpowers Unite Behind Bitcoin’s Blockchain Tech (Op-Ed)
BitRuble? First Russian Cryptocurrency Announced by Qiwi
Tuesday, September 15, 2015
Gov’t Funded Blockchain Lab to Open in the UK
Bitcoin 101: What is a ‘Fork’ and How Does it Work?
Russia’s New Law Threatens Internet Privacy as LocalBitcoins Volume Spikes
Nine Top Global Banks Pool Resources to Fund R3 to Develop Digital Currency Standards
Nine of the largest investment banks are planning to develop common standards for blockchain technology in an effort to broaden its use across financial services, The Financial Times reports.
The banks – Goldman Sachs, JPMorgan, Credit Suisse, Barclays, Commonwealth Bank of Australia, State Street, Royal Bank of Scotland (RBS), BBVA and UBS – will fund a startup called R3, formed by a New York-based group of trading and technology executives.
The banks will jointly contribute several millions of dollars, according to a person familiar with the talks. The funds are expected to go to a forthcoming Series A capital raising for R3.
The project will be led by R3 Founder and Managing Partner David Rutter, who served as CEO of electronic broking at ICAP, the world’s largest interdealer broker, from 2010 to 2013. Prior to ICAP, Rutter was co-owner of Prebon Yamane, last serving as chief executive officer for the Americas.
The R3 team is composed of a highly specialized team of financial services industry veterans, technologists, subject matter experts and new tech entrepreneurs especially focused on rethinking and improving the modern financial markets ecosystem. Rutter recruited another former ICAP trading executive, Nichola Hunter, to join R3. Richard Brown, a technology expert formerly with IBM UK, and Tim Swanson, a U.S.-based cryptocurrencies consultant, have also joined R3.
In addition to developing commercial applications, the project will seek to establish consistent standards and protocols for this emerging technology across the financial industry in order to facilitate broader adoption and gain a network effect, notes an R3 press release. The group will collaborate on research, experimentation, design, and engineering to help advance state-of-the-art enterprise-scale shared ledger solutions to meet banking requirements for security, reliability, performance, scalability and audit.
R3 and its bank partners will establish collaborative joint working groups to lead these efforts, which will leverage the R3 team as well as experts within the partner banks. The group will work within a collaborative lab environment or “sandbox” to test and validate distributed ledger prototypes and protocols.
“This partnership signals a significant commitment by the banks to collaboratively evaluate and apply this emerging technology to the global financial system,” said Rutter. “Our bank partners recognize the promise of distributed ledger technologies and their potential to transform financial market technology platforms where standards must be secure, scalable and adaptable.”
R3 is an innovation firm focused on building and empowering the next generation of global financial services technology, states the company’s website. R3 focuses on applications of cryptographic technology and distributed ledger-based protocols within global financial markets.
“If you’re looking to introduce applications with distributed ledger technologies to improve the financial markets, you can’t have each participant working to a different pattern,” said Christopher Murphy, global co-head of FX, rates and credit at UBS.
R3 is bringing a consensus, which could establish common standards, he said.
“The collaborative model we’ve established with R3 and the other banks is a very effective way to deliver robust shared ledger solutions to the financial services sector,” said Kevin Hanley, director of design at RBS. “Right now you’re seeing significant money and time being spent on exploration of these technologies in a fractured way that lacks the strategic, coordinated vision so critical to timely success. The R3 model is changing the game.”
“These new technologies could transform how financial transactions are recorded, reconciled and reported – all with additional security, lower error rates and significant cost reductions,” said Hu Liang, senior vice president and head of emerging technologies at State Street. “R3 has the people and approach to drive this effort and increase the likelihood of successfully advancing the new technology in the financial industry.”
Mike Tyson Partners with Bitcoin Direct LLC
Bitcoin Must Be About the Mission Rather than the Money, Says MIT Media Lab Founder Nicholas Negroponte at Scaling Bitcoin
Legendary Internet pioneer Nicholas Negroponte, a founder of the MIT Media Lab and the One Laptop per Child initiative (OLPC), gave a controversial talk at the Scaling Bitcoin workshop in Montreal.
The Scaling Bitcoin workshop has been focused on how to safely improve the scalability and decentralized nature of the Bitcoin network, and included many technical talks on current issues such as the block-size debate and proposed enhancements such as lightning networks.
But Negroponte chose to keep away from these technical implementation details and focus on the big picture, the “raison d’être” of Bitcoin, its political dimension, and its implications for the evolution of society, with a high-level approach similar to that of his 1995 book “Being Digital” on the future of the then-emerging Internet.
Negroponte mentioned his past involvement with DigiCash, an electronic money corporation founded by cryptographer David Chaum in 1989. DigiCash, which pioneered anonymous digital transactions and is often considered a conceptual precursor of Bitcoin, declared bankruptcy in 1998. Negroponte was an investor and the first chairman.
“Chaum’s raison d’être was electronic privacy, and his plans for DigiCash were ambitious,” noted a Forbes article titled “Requiem for a Bright Idea” published after the DigiCash went out of business. “Digital pseudonyms would protect the identity of Netizens as they roamed the Web. Chaum became a hero to cyberlibertarians.”
Despite his past involvement with DigiCash and the idea of electronic transactions, Negroponte definitely doesn’t come across as a cyberlibertarian. On the contrary, he self-identifies as a socialist. “If it’s not clear, I am about as socialist as you can get,” says Negroponte at the beginning of the Q&A session after the talk. “I come from an era and a part of the world where socialism was viewed as good.”
Negroponte opened his talk with three anecdotes: the spontaneous use of sky lift e-tickets as a parallel currency by the people of a Swiss sky resort; his experience as target of cybercrime by hackers who impersonated him via email and stole a lot of money from his bank account, which he couldn’t recover even after the intervention of his brother John Negroponte, former U.S. Deputy Secretary of State; and his recent experiences in Greece when the banks were closed as a consequence of the Greek crisis.
Negroponte is firmly persuaded of the importance of Bitcoin.
“I can’t think of too many things that are more important than Bitcoin,” he said. “And don’t blow it. Don’t screw it up.”
Many people in the audience applauded at this point, including libertarians and crypto-anarchists, but these didn’t applaud much after Negroponte started to explain his thoughts on how to ensure a bright future for Bitcoin – with a socialist slant.
The worst thing entrepreneurs can do, according to Negroponte, is to consider Bitcoin as a get-rich-quick scheme, because treating Bitcon as such creates large price fluctuations and episodes that scare people away from Bitcoin. On the contrary, Bitcoin should be approached with a sense of mission – a mission to make the world a better place, he said. Negroponte urged the entrepreneurs in the audience to do non-profits.
Similar considerations apply beyond Bitcoin. Negroponte, who has been involved in about 60 startups himself, is critical of the startup culture. Today’s startups, according to Negroponte, cause enormous brain drain.
“Some of the smartest kids are being sucked out of society to do the stupid apps on some iPads with their girlfriends and boyfriends,” he said (another applause here), instead of working on big, hard problems. Here, Negroponte seems to agree with hardcore libertarian venture capitalist Peter Thiel, who, in an interview published on MIT Technology Review, exhorted entrepreneurs to go after bigger problems than the ones Silicon Valley is chasing.
“We wanted flying cars; instead we got 140 characters,” Thiel said.
Though the role of entrepreneurs and philanthropists in technology development is often emphasized, Negroponte thinks civil servants also have an important role to play. He considers roads, public transportation, education and the Internet itself as important parts of the infrastructure of a civil society, which should be developed by the government and made available to everyone at no cost.
Currency – including emerging digital currencies like Bitcoin – should also be part of the essential infrastructure provided by the government, he said. Bitcoin is important from a global point of view, said Negroponte, and could help creating much-needed global governance structures in an increasingly fragmented world.
“What’s wrong in being run by the government?” asked Negroponte, “If you think the government can’t run anything, go to Switzerland and ride a train.” He added that Finland has the world’s best education system, and no private schools. While acknowledging that there are lessons to be learned from libertarians, Negroponte sees an important role for the government to collect taxes and distribute benefits to everyone.
Negroponte’s talk, which is likely to provoke heated debates, can be interpreted as self-serving. In fact, the Digital Currency Initiative at MIT Media Lab, founded by Negroponte, is claiming a role of arbitration and leadership in Bitcoin developments, in prestigious academic settings far from get-rich-quick schemes, and Negroponte hinted at the Media Lab’s role at several points in the talk.
Photo Gin Kai / Wikimedia (CC)
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