With Rambling Clinton Keynote, Ripple Is Sending a Clear Message

With Rambling Clinton Keynote, Ripple Is Sending a Clear Message

Former U.S. President Bill Clinton didn’t have to say much when he delivered the keynote at Ripple’s Swell conference in San Francisco. And indeed, he barely said anything relevant to the blockchain industry. The 42nd commander in chief has long been recognized for his rhetorical prowess, but there was little pressure on him to rouse or inspire the audience at Ripple’s event. He was sending a message on Ripple’s behalf simply by appearing on stage. Specifically, the company was saying: Ripple is the kind of company that can book Clinton to speak. While Clinton and his wife – former U.S. Senator, Secretary of State and 2016 Democratic presidential nominee Hillary Clinton – have given talks at any number of venues over their decades of public service, the “Paid Clinton Speech” became something of a meme in 2016. During the campaign, critics on the left and right balked at the $22 million she’d earned giving speeches to employees of big banks and other establishment boogeymen. The content of these speeches – she refused to release transcripts – became something of a national obsession. To some, they epitomized what was perceived as overly cozy relations between DC and Wall Street. For a company like Ripple, then, there is powerful subtext in booking a Clinton to speak. To understand why, consider the ambiguity of the company’s position. Schrodinger’s Ripple Ripple is a Schrodinger’s cat. In one outcome, we open the box and a thriving fintech company emerges, one that provides a long-overdue efficiency boost to the financial services sector by introducing new, disruptive technologies: blockchain and digital assets. In the other outcome, we open the box and Ripple is just another cryptocurrency company looking for a use case: the company sells tens of millions of dollars worth of the cryptocurrency XRP every quarter through a subsidiary, but as of today, just three relatively obscure firms are making commercial use of the Ripple product that leverages XRP. Meanwhile, Ripple has been taken to court by small-time investors who allege that its sales of XRP constitute an unregistered securities offering. Perhaps not coincidentally, Ripple has begun to assert that it did not create XRP – indeed, its ownership of the majority of the XRP tokens in existence is down to a…

What we accomplished at Coinbase in Q3 2018

What we accomplished at Coinbase in Q3 2018

This week, I sent a note to the Coinbase team about what we accomplished in Q3. I’m sharing it here with our customers and the crypto community more broadly to help provide transparency into our operations. *** Dear Team, At the end of the last quarter, I sent out an email reflecting on all we’d been able to accomplish in a single three-month period. Given how fast we move and just how much we accomplish, I’m finding this a useful exercise and a good opportunity to pause, reflect, and celebrate our wins. You heard some of this last week at our All Hands meeting, but I want to share it in one digestible email that you (and I) will be able to read thoughtfully, reflect on, and use to map our journey over time. WE HIRED: In Q3, we continued to bring on amazing people. We used many of these hires as opportunities to be thoughtful about our operating structure, and how to help our teams function more efficiently as we scale. In Q3, we added: WE INVESTED: The crypto space continues to be full of fascinating startups, and this quarter, we invested in nine more companies that have great potential, including: Horizon Games, Coinmine and Public Market. WE ACQUIRED: This quarter, our acquisitions focused on teams that would bring depth, experience, and innovation to the teams and products already within Coinbase. We brought on the Distributed Systems team, who joined our Identity group, officially closed the Keystone acquisition, and are in conversations with a number of other high-potential teams. WE LAUNCHED: In Q3, we focused on launching features and policies that our customers want most, helping make Coinbase simple and easy to use, and positioning Coinbase as the destination for the next 100 million people who want to access, own, and use cryptocurrency. In Q3, we added: Bundles: A simple way to invest in a basket of crypto assets with just a few clicks; Increased limits for most customers : They can now buy and sell immediately, and most had their trading limits increased to $25,000 per day; New asset listing process: A new asset strategy that will radically accelerate our ability to add new assets; Coinbase Wallet: Toshi became Coinbase Wallet, as part of…

WSJ: Automated Trading Programs Manipulate Digital Currency Prices

WSJ: Automated Trading Programs Manipulate Digital Currency Prices

Automated trading programs, or bots, are manipulating digital currency prices on cryptocurrency exchanges, according to a Wall Street Journal (WSJ) report October 2. Automated trading software is a program that allows traders to set specific rules for both trade entries and exits, submit orders to a market center or exchange, and then automatically executes them by means of a computer at speeds greater than any human is able. Trading programs are available for traditional and crypto markets, and can be deployed for both legitimate and manipulative strategies. Addressing crypto markets, WSJ cites a lack of proper regulation as the main condition that allows bots to execute abusive strategies on an industrial level. Andy Bromberg, co-founder and president of startup CoinList, told WSJ that “this sort of activity is rampant in the market right now. It hurts the market’s reputation, and it hurts individual investors.” According to WSJ, $80-million digital currency hedge fund Virgil Capital uses its own bots on a number of crypto exchanges around the world. Stefan Qin, managing partner of Virgil Capital, told WSJ that he is in a constant cat-and-mouse game with enemy bots. Per WSJ, Virgil lost funds on certain trades in Ethereum (ETH) earlier this year after a “harassing bot” targeted the fund. The WSJ further explains the strategy used by the bot: “The bot’s strategy was similar to ‘spoofing,’ a practice in which traders enter fake orders only to cancel them. The tactic, aimed at tricking other investors to buy or sell an asset by falsely signaling there is more supply or demand, was outlawed in U.S. stock and futures markets in 2010.” Another example of price manipulation in digital currencies cited by WSJ is trader Kjetil Eilertsen, who began trading Bitcoin (BTC) in 2011. Eilertsen reportedly developed a program called Quatloo Trader, that was promoted as “the best market-manipulation tool in the world of crypto.” The idea of the program is to make market manipulation easier by using built-in tools like a special tab called “whale tools,” which executes several “abusive strategies.” Eilertsen told WSJ that it is pointless to ban manipulation in digital currencies, and that it would more effective to provide manipulation tools to small traders. “If everybody can manipulate, then nobody is manipulating. You can’t…

Japan Roundup: Bitflyer Restructures, Zaif Suspends New Member Registrations

Japan Roundup: Bitflyer Restructures, Zaif Suspends New Member Registrations

Exchanges The largest crypto exchange in Japan, Bitflyer, has announced a major organizational overhaul. A new representative director has been appointed to oversee the exchange’s day-to-day operations. Meanwhile, hacked crypto exchange Zaif has stopped accepting new customers as regulators ramp up oversight of exchange operators. Also read: 160 Crypto Exchanges Seek to Enter Japanese Market, Regulator Reveals Zaif Halts New Memberships Osaka-based crypto exchange Zaif, one of the 16 regulated crypto exchanges in Japan, has suspended signing up new members. “We decided to temporarily stop accepting new membership registration at 21 o’clock on September 28,” Zaif’s operator, Tech Bureau, announced Friday. The company clarified, “Customers who are waiting for registration, such as being already in the process of identity verification by applying for membership registration, will register as usual as a member,” adding: We are responsible for recovering the damage to all existing customers who were victimized by the current virtual currency outflow, but to do so, [we need] to concentrate our internal resources. Zaif was hacked on Sept. 14 but the breach was not discovered until Sept. 17. The total damage is estimated to be about 7 billion yen (~$62 million). Tech Bureau claims that approximately 5,966 BTC, 42,327 BCH, and 6,236,810 MONA were stolen. The country’s Financial Services Agency (FSA) has issued the company a third business improvement order. Bitflyer’s Overhaul Bitflyer announced Monday, Oct. 1, a change in the company’s organizational structure. “Today marks the establishment of the holdings company, Bitflyer Holdings Inc.,” the firm announced. Bitflyer Inc., which operates Japan’s largest crypto exchange, “has become a wholly-owned subsidiary of Bitflyer Holdings Inc. by means of a stock transfer.” In a joint statement, Bitflyer Inc. and Bitflyer Holdings Inc. clarified, “Everyone will be able to use our services and trade just as they always have,” noting: The purpose for creating a holdings company is to separate administrative and operational functions, to clarify the duties and responsibilities of each function, to strengthen corporate governance, and to create a more thorough compliance structure. On June 22, Bitflyer Inc. halted new account registrations after it was issued a business improvement order by the FSA. “In order to maximize our efforts towards building a suitable service and improving on the issues identified, we have voluntarily and temporarily suspended…

Bitcoin Investment Trust Shares Down 80 Percent, Investors Cite Low Prices, High Fees

Bitcoin Investment Trust Shares Down 80 Percent, Investors Cite Low Prices, High Fees

The “lone” Bitcoin (BTC) investment trust in the U.S., Grayscale Bitcoin Investment Trust (GBTC),  has seen its net asset value hit the lowest point since the BTC price surge of 2017, Bloomberg reported October 2. Grayscale Investments Inc., the company behind GBTC, reportedly has $1.5 billion in assets under management, and is one of the largest cryptocurrency asset managers in the world. GBTC is an open-ended grantor trust, the purpose of which is to track BTC market price. According to Bloomberg, shares of GBTC have dropped by around 80 percent since Bitcoin hit almost $20,000 last December. The drop purportedly follows the fall of the BTC price, which is down nearly 66 percent during the same timeframe. Some investors attribute part of GBTC’s downward trend to its expense fees, as the company charges $20 for every $1,000 invested, or two percent. In comparison, the average mutual fund expense ratio is around 0.59 percent.   Naeem Aslam, chief market analyst at financial services firm TF Global Markets U.K. Ltd., told Bloomberg that “expense ratios are insane for these funds and the current Bitcoin price is creating more problems.” Previously, Cointelegraph reported that institutional investors replaced high net-worth individuals as the biggest buyers of cryptocurrency transactions worth over $100,000. Traditional investors and hedge funds have reportedly become more involved in the $220 billion crypto market through private transactions. At the same time, miners have begun scheduling regular coin sales instead of holding or offloading them during market rallies. Last month, Chainalysis published a study revealing that BTC investors and speculators held their positions over the summer, while markets seem to have become more stable overall. The monetary aggregates reportedly were “extremely steady” during the summer, showing that the amount of BTC held for speculation was stable from May to August at around 22 percent of available BTC. The amount of BTC held for investment also showed stability during the same period at around 30 percent.

Chrome Extensions Will Soon Protect Against Miners and Hackers

Chrome Extensions Will Soon Protect Against Miners and Hackers

Technology & Security Google has announced a number of upcoming changes concerning the development of new extensions for Chrome. Users of the web browser will soon benefit from improved security and better protection against malware including hidden miners and tools used to steal cryptocurrency. Also read: A Guide to Building Your Own Crypto Mining Rig Google Introduces Changes to Make Chrome Extensions Safer Recognizing how important it is for users to be able to trust that the extensions they install are not only performing well but also safe and preserving their privacy, Google has recently taken steps to improve the detection of malicious add-ons to its popular browser using machine learning techniques. Now the company has announced new changes intended to make all Chrome extensions trustworthy by default which means, among other things, successfully preventing cryptojacking and hidden mining. According to a blog post, starting from Chrome 70, users will have the option to restrict the access of different extensions to a custom list of sites. In addition, they will be able to configure extensions to ask for confirmation when they attempt to gain access to a certain page. Host permissions allow extensions to automatically read and change data on websites, which has led to malicious misuse in many cases, the company said and added: Our aim is to improve user transparency and control over when extensions are able to access site data. In subsequent milestones, we’ll continue to optimize the user experience toward this goal while improving usability. Google further detailed that in the future, extensions requesting powerful permissions will be subject to additional compliance review. The team that’s preparing the changes is also closely examining extensions using remotely hosted code. Addressing the developer community, Google says: “Your extension’s permissions should be as narrowly-scoped as possible, and all your code should be included directly in the extension package, to minimize review time.” Two-Step Verification for Chrome Web Store Developer Accounts According to another change in the rules governing the review process for new extensions, one that has been introduced already, Chrome Web Store will no longer allow extensions with obfuscated code. The new policy, that applies to all new extension submissions, pertains to code within the extension package as well as any external code…

Charles Schwab Exec Joins Coinbase Board

Charles Schwab Exec Joins Coinbase Board

Chris Dodds, who serves on the board of directors of the Charles Schwab Corporation, has joined cryptocurrency exchange Coinbase’s board of directors, according to an announcement published October 2. The Charles Schwab Corporation is a brokerage, banking and financial advisory services firm based in San Francisco. Per the firm’s annual report, the company had $3.36 trillion in client assets, 10.8 million active brokerage accounts, and 1.2 million banking accounts, as of December 2017. In addition to the Coinbase board, Dodds will reportedly contribute to the exchange’s expansion in terms of financial services capabilities. According to the announcement, Dodds has held various leading financial positions in treasury, corporate development, and financial planning and analysis. At Charles Schwab, Dodds has worked as VP of corporate finance and mergers and acquisitions, as well as treasurer. Dodds’ joining Coinbase is the latest in a series of talent acquisitions by the San Francisco-based crypto exchange and wallet services provider. Last month, Coinbase hired former Fannie Mae General Counsel Brian Brooks as their new Chief Legal Officer, who will be responsible for legal, compliance, and government affairs. Also in September, the exchange welcomed Former LinkedIn executive Michael Li as the VP of data. In August, former Amazon Web Services (AWS) and Microsoft employee Tim Wagner joined Coinbase as VP of engineering, while in July the exchange announced that ex-Pershing exec Jeff Horowitz will join the company as Chief Compliance Officer. Recently, Coinbase rolled out a new update called “Coinbase Bundles,” which are designed to simplify cryptocurrency trading. The product represents a basket of five cryptocurrencies supported on Coinbase — Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), Litecoin (LTC), and Ethereum Classic (ETC) — and are purchased in proportion to their market capitalization in U.S. dollars.

St. Louis Fed VP: A Private Crypto Could Solve the ‘Triffin Dilemma’

St. Louis Fed VP: A Private Crypto Could Solve the ‘Triffin Dilemma’

Cryptocurrencies could serve as a possible solution to disparities currently faced by the U.S. dollar, an economist with the Federal Reserve Bank of St. Louis said Tuesday. During an hour-long question-and-answer session, the Federal Reserve Bank of St. Louis – one of 12 regional banks that make up the U.S. central banking system – answered questions on Twitter with economist David Andolfatto, who is a vice president in the bank’s research division. During the session, one user asked whether cryptocurrencies can be used to solve the 50-year-old Triffin Dilemma, which refers to the conflicting interests between national and global monetary policy for a country whose currency is used as the world’s reserve. Specifically, it refers to the U.S. dollar, which has been considered a world reserve currency for decades. In order to maintain this role, the U.S. must incur a trade deficit. When posed the Triffin Dilemma question, Andolfatto responded: “The Triffin Dilemma refers to the double-edged sword of possessing a currency that serves as the world reserve currency. If a private cryptocurrency were to replace a given world reserve currency, this would eliminate the dilemma for that currency.” Other questions asked during the session ranged from whether Andolfatto thought a cryptocurrency could replace the U.S. dollar or whether the Federal Reserve is likely to ever consider monetary policy in terms of cryptocurrencies. The economist demurred on both counts, noting that cryptocurrencies are essentially private monies, and therefore not something that would fall under the central bank’s purview. Moreover, because there is “no need for decentralized consensus based record keeping” for the dollar, he does not see it being replaced with a cryptocurrency. Andolfatto also does not see the demand for cryptocurrencies supplanting the demand for existing reserve currencies, he added. Federal reserve logo via Shutterstock The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

BCH Roundup: Merchant Adoption, Wallet Services, and Hackathons

BCH Roundup: Merchant Adoption, Wallet Services, and Hackathons

News Another busy week has passed for Bitcoin Cash (BCH) proponents as there continues to be an influx of bitcoin cash adoption, new platforms, and improved infrastructure. Also read: Popular Discussion Board 4chan Now Accepts Cryptocurrencies for Passes Bitcoin Cash (BCH) Market Action Every week there’s an awful lot of developments happening within the BCH ecosystem and this week is no different. Bitcoin cash markets have been strong again over the past week, as the decentralized cryptocurrency is up 1.29 percent today and up over 22 percent over the last seven days. At the time of publication one BCH is trading for $533 per coin and the overall BCH market valuation is $9.28 billion today. The top five exchanges swapping the most bitcoin cash include Lbank, Hitbtc, Okex, Binance, and Huobi. As far as trading pairs are concerned the top five currencies traded for BCH includes tether (USDT 35.4%), BTC (31.5%), ETH (20%), USD (7%), and KRW (2.3%). More Bitcoin Cash Adoption Besides market action, there’s been a lot of adoption happening as well throughout the BCH ecosystem. One adoption announcement this week that BCH fans enjoyed was from the event ticketing platform Big Tickets who revealed they have integrated with Bitpay for event payments. Now users can purchase tickets to events using the lightning fast and low fee BCH network, explains the company’s recent press release.    “We know our product, values, and dedication to innovation are deserving of an equally secure and seamless purchase method for our event attendees — The use of bitcoin cash is a major social trend we’ve been monitoring and we’re excited to be the first event ticketing platform in the United States to accept the burgeoning cryptocurrency,” said Jason Henley, CTO of Bigtickets.com. Another well-known firm that now accepts BCH is the popular software bounty hunters Hackerone. The Hackerone team has also partnered with Bitpay’s payment services and individuals and companies can use bitcoin cash to find bugs in their systems. Hackerone has worked for many fortune 500 firms like General Motors, Google, Twitter, GitHub, Nintendo, Lufthansa, Panasonic Avionics, Qualcomm, Starbucks, Dropbox, and Intel. Bitcoin Cash Wallet Infrastructure This week the wallet firm, Cointext, led by the company’s founder Vin Armani has announced that the SMS-capable wallet application can now…

Improving Bitcoin Reliability through Child Pays for Parent

Improving Bitcoin Reliability through Child Pays for Parent

By Brock Miller & Eli Haims At Coinbase we strive to be the most trusted and easiest to use cryptocurrency company in the world. As part of being the easiest to use, one of our goals is to provide a great user experience for customers who are sending and receiving cryptocurrency such as bitcoin. Sending cryptocurrency today can be difficult; transaction fees are volatile and unpredictable, which can result in significant swings in the amount of time it takes for a transaction to confirm. As a result of this, we’ve had many days here at Coinbase where some users’ transactions would get stuck due to fee rate spikes and general Bitcoin network congestion (which peaked in December 2017). First and foremost, this gives our users a frustrating experience because it takes longer than expected for their transactions to arrive. Second, it means that engineers at Coinbase are getting paged frequently to investigate a situation that is mostly out of their control. To address these challenges, we leaned on a well-known procedure which uses economic incentives enabled by the Bitcoin protocol for improving confirmation time of transactions: Child Pays for Parent (CPFP), and we’ve implemented this at Coinbase scale, sometimes using it to rescue thousands of transactions in a single day. How it Works: Bitcoin Fees When a customer wants to send some bitcoin to another address on the network, there are two major factors that we try to balance: The transaction fee, or how much the customer pays to have their transaction included in a block, and The speed at which that transaction gets included in a block. Unlike a credit card processor that generally specifies fees as a percentage of a charge, Bitcoin operates with a fee market. This is somewhat analogous to a pay-as-bid auction, which is structured as follows: potential buyers will submit bids at different prices, and the auctioneer will select the highest bidders as the winners. Similarly, users select a transaction fee when sending a transaction to the network, and miners will select the set of transactions with the highest fees to include in a block. Typically, a user will decide how long they are willing to wait for their transaction to get included in a block, and will either ask…